New bill targeting conflicts of interest between hospitals, governing authorities could reshuffle Erlanger board

Staff photo by Jenna Walker/Chattanooga Times Free Press - Mar 3, 2011 -- Building mug of Erlanger Hosptial in Chattanooga, Tenn.

A bill targeting conflicts of interest between Tennessee's public hospitals and their governing bodies could upend the structure of Erlanger Health System's Board of Trustees, should it become law.

Senate Bill 179 and House Bill 416 would prohibit a trustee or former trustee of a hospital authority from entering into an arrangement for employment or the provision of labor or services with the authority until at least 12 months have expired following the trustee's tenure of service on the board. It would also require hospital authorities to publish these arrangements on the hospital's website and in a newspaper of general circulation.

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For more information on the bills, visit the Tennessee General Assembly website.

The bill passed the Senate last week and is currently moving through the House.

The Times Free Press asked Erlanger for a list of current or former trustees who would be affected by the legislation, but spokeswoman Pat Charles said "it would be premature for Erlanger to speculate who this bill impacts at this point."

However, the conflict of interest disclosure statements that trustees are required to complete - which the Times Free Press obtained through an open records request in February - reveal that the current physicians on the board may have to choose between remaining a trustee or severing their financial ties with the hospital.

Dr. James Bolton is employed by Erlanger; Dr. Blaise Baxter's statement lists a contract with Erlanger Health System within the past 12 months; and Dr. Phil Burns isn't employed by Erlanger but provides clinical services at the hospital through a contract between the University of Tennessee College of Medicine and University Surgical Associates.

Mike Griffin, chairman of Erlanger's board, said in an email that he was unaware of the bill's specifics, but he thinks having physicians on the board is "a tremendous asset."

"I am hopeful that the bill, in its final form, will not impact physician participation on Erlanger's board," Griffin said.

Griffin works for First Tennessee Bank, which does business with Erlanger, but he has "no direct control or dealings with the relationship," according to his disclosure statement.

Several other trustees listed organizations that contract with Erlanger on their disclosure statements, but the bill's sponsors were unable to confirm whether or not the bill includes them by press time.

Co-sponsor Robin Smith, R-Hixson, said during a House Health Committee meeting Tuesday that the bill is designed to offer consumer protections for individuals who live in an area with a county or a publicly-owned hospital. It would only affect hospitals created by a private act or authority that's funded by taxpayers, not private or nonprofit hospitals.

"Essentially, this makes [trustees of a hospital authority] exposed to similar regulations that we as members of the General Assembly have to follow after we leave the General Assembly," Smith said.

Sen. Todd Gardenhire, R-Chattanooga, said he filed the bill to "make sure that everybody operated above order."

"If you're a trustee, we expect you to act in the most prudent manner, and the way to ensure that is to make sure there are guidelines on what they can and can't do," Gardenhire said.

Erlanger is governed by an 11-member board of trustees who serve without compensation.

The county mayor appoints six trustees with approval by the Hamilton County Commission, and the General Assembly appoints four trustees by a majority vote. The medical chief of staff - Bolton - also serves as a trustee.

Contact staff writer Elizabeth Fite at or 423-757-6673.