Erlanger's deficit mirrors its management

Erlanger's deficit mirrors its management

September 25th, 2013 in Opinion Times

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Erlanger is like the boy who cried wolf.

The public hospital ended its 2013 fiscal year nearly $8 million in the red. Were it not for a tax refund, it would have been worse.

Erlanger officials had budgeted for a $10.8 million profit, but clearly that didn't happen. How can this be?

As expensive as health care is, and as much as Americans and insurance companies pay for health care, how can Erlanger not be at least breaking even?

Erlanger, in an executive summary for the fiscal year-end report, says admissions were 6 percent under budget for the year, in-patient surgeries were under budget by 11.7 percent, outpatient surgery was below budget by 4.6 percent - even emergency room visits were 4.4 percent under budget, though the ER was the only area that showed real increases in foot traffic over the previous year. ER visits rose 6.4 percent.

Meanwhile hospital leaders are claiming Erlanger provided $85 million in uncompensated care, which includes charity, outstanding TennCare costs and bad debt.

But what the executive summary doesn't say is equally telling.

The hospital has offered its terminated former CEO, Charlesetta Woodard-Thompson, $486,000 in severance, and she is suing for $25 million. The hospital paid terminated former chief legal officer Dale Hetzler at least $229,510 in severance when he left in March, according to a copy of his separation agreement obtained by the Times Free Press through an open records request. His annual salary was $306,015.

Paying grand salaries and then following them up with grand, six-figure severances apparently is an addiction at Erlanger.

In 2011, the hospital paid forced-out CEO Jim Brexler $728,000. In 2003, former CEO Dennis Pettigrew was given $131,000 in severance that was awarded in settlement of his $380,000 lawsuit. In 1998, former CEO Sylvester "Skip" Reeder was paid $516,000 in severance.

Can this indicate anything other than bad management by the board doing the hiring and firing?

Then there's the question of the hospital board's penchant for closing the public out of it's discussions about those hirings, firings and strategies for budgeting.

The current CEO, Kevin Spiegel, was hired for $680,000 a year (the highest ever) and a $50,000 sign-on bonus. He is pushing a plan to restructure the now-public hospital into a not-public 501(c)3 nonprofit organization that does not have public meetings at all. He was hired, by the way, in a 16-minute board meeting in February after board members returned from a 45-minute closed meeting about "parliamentary procedure." With absolutely no discussion about any of the three candidates, one board member threw out Spiegel's name and a 5-3 vote hired him. The remainder of the meeting was spent taking another vote to have the meeting minutes state that the Spiegel vote was "unanimous."

This week, the Erlanger board met in a closed meeting with Chattanooga officials to discuss the 5-acre Lincoln Park property that the city hopes the hospital will donate. Board officials, hoping to get the city to pay for the property long promised to the community, cited "strategy" as the reason the public couldn't hear discussions this time.

With management like this, no wonder Erlanger is bleeding red ink.