Erlanger Health System’s publicly appointed board of trustees more than doubled the amount hospital management can spend without its authorization, but the new amount – $250,000 – pales in comparison to those of similar metropolitan institutions.
Records show board members at Grady Health System, Atlanta’s public hospital, allow management to spend up to $1 million without oversight or supervision.
The figure is $500,000 at Nashville General Hospital and Regional Medical Center in Memphis, documents show.
Jackson-Madison County General Hospital mirrors Erlanger, as its board requires “approval by resolution” of amounts more than $250,000, said Bobby Arnold, president and CEO of the hospital’s owner, West Tennessee Healthcare.
Conversely, Hutcheson Medical Center’s board must approve any spending of more than $150,000, according to hospital policy.
Appointed by elected Hamilton County and Chattanooga leaders, Erlanger trustees routinely approve hospital equipment purchases, doctor hires, consulting fees and other contracts. Until recently, Erlanger’s expenditure threshold was much lower – $100,000.
The decision to up the ante to $250,000 comprised part of the board’s “consent calendar,” which allows the board to pass what it deems run-of-the-mill business under one consolidated vote.
There was no debate on the new threshold, and trustees unanimously voted on June 23 to approve the consent calendar. Some capital projects cost millions of dollars, and many are never debated in open meetings before they’re approved.
“We weren’t tightening it up, we were loosening it up,” said Erlanger board Chairman Dan Quarles, who drafted the resolution. “It made sense to update it and make those changes.”
Erlanger historically receives $3 million a year from Hamilton County taxpayers to help cover the cost of indigent care. This year, the county budgeted just $1.5 million for Erlanger, but the hospital continues to lobby for its usual allocation.
Quarles said the board may continue to keep an eye on six-figure transactions, hinting at possible quarterly reports of purchases below $250,000.