Erlanger Health System will be featured Tuesday night in a "Frontline" and NPR documentary on the financial pressures faced by American hospitals serving low-income and uninsured patients.
The upcoming episode in "The Healthcare Divide" series airs at 10 p.m. May 18 on WTCI and will be available online. Chattanooga is used as an example for the nationwide struggle of "safety net hospitals," those that serve all patients regardless of insurance status or ability to pay for care.
The investigation found uneven government support for these hospitals compared to their for-profit and, sometimes, nonprofit neighbors. The documentary explores the effects of the COVID-19 pandemic, which dealt serious blows to hospitals like Erlanger that care for the populations most likely to face severe infections from the virus. Last summer, Erlanger implemented temporary furloughs, suspended retirement contributions and cut some non-clinical staff last summer during pandemic-related losses.
Erlanger did not offer comment to the Times Free Press before deadline for this story.
The documentary, which the Times Free Press prescreened Monday, details Erlanger's efforts in recent years to attract more insured patients to offset climbing costs of care and supplemental government funding that was not keeping pace. At the same time, Erlanger competes against CHI Memorial Hospital, part of the $20 billion national Catholic health system, and Parkridge Medical Center, owned by the $50 billion system HCA Healthcare.
Erlanger's efforts to boost profits, in part, included greater investment in specialty services, expansion into suburbs and buying more advanced equipment, as well as a large advertising campaign that included creating a Super Bowl commercial in 2019.
In May 2019, Erlanger's Medical Executive Committee sent a letter to the Board of Trustees chairman saying the group had "no confidence in the structure of the current Executive Leadership to ensure quality and safety of patient care." In August of that year, the hospital system's executive vice president and chief operating officer left and, in September, the system's president and CEO left as well.
Criticism also came from local medical providers such as Dr. Kelly Arnold, founder and medical director of Clínica Médicos, whose clinic focuses solely on caring for uninsured and often overlooked area residents. Arnold told "Frontline" that Erlanger's shift in focus was disheartening and appeared to be putting the financials before the patients.
In 2019, Erlanger ended the fiscal year with a 1.3% operating loss, compared to Parkridge's 23.7% profit margin and CHI Memorial's gains of 6.8%, according to a database operated by Healthcare Management Partners.
Arnold, as well as several leading Erlanger doctors, including Dr. Sudave Mendiratta, chief of Erlanger's Department of Emergency Medicine, and Dr. Chris Young, chief of staff at Erlanger. Former U.S. Senator and Chattanooga Mayor Bob Corker is featured as well.
The "Frontline" documentary also visits a hospital system in Rhode Island to explore the role private equity and investor-driven hospitals play in health systems, specifically around quality of care. According to the documentary, private equity firms often buy hospital systems and manage them in ways that some providers feel decreases the quality of care and prioritizes profits.
In August, a private equity firm made an unsolicited offer to buy Erlanger from Hamilton County for $475 million. The group looking to buy Erlanger said it would provide the financial backing to strengthen the hospital given recent financial shortfalls. Corker and Hamilton County Mayor Jim Coppinger were involved in the meeting but Coppinger and the hospital's board of trustees said the health system was not for sale.
In the past year, Erlanger posted millions of dollars in income despite low admission levels, thanks in part to pandemic-related government aid and, as officials said in January, better expense management.
While local officials have not signaled any willingness to sell Erlanger, those featured in the "Frontline" documentary suggest the private sector may be the only remaining option if public funding for the health system does not increase.
The "Frontline" investigation featuring Erlanger airs on WTCI at 10 p.m. on May 18.
Contact Wyatt Massey at [email protected] or 423-757-6249. Follow him on Twitter @news4mass.