Response positive to Erlanger's proposed move to nonprofit, so far

Staff Photo by Matt Hamilton / Erlanger Hospital on Tuesday, Dec. 15, 2020.

Hamilton County Mayor Jim Coppinger said so far the community is responding well to the county's effort to transition Erlanger Health System from a governmental authority to a nonprofit organization, which he believes is important for the system to remain competitive and stable for the long term.

"The comments I'm hearing from the general public and in respected positions have all been positive. I'm sure if you look far enough there's people who aren't pleased, but that's generally the case with any decision," Coppinger said. "Only time will tell where the criticism may come, but so far it's been extremely positive."

The process of restructuring Erlanger began this week when Coppinger asked commissioners to allocate funds for a lawyer with expertise in similar transitions. Commissioners will vote Wednesday to bring on Richard Cowart, chair of Nashville-based Baker Donelson's Government Relations & Public Policy Department, to assist with the process.

Coppinger said it will take a long time to work out details, such as whether the county would continue giving $1.5 million to Erlanger to provide inmate care each year if the hospital is no longer public.

That's all the money Hamilton County puts toward the hospital. The county owns all of Erlanger's assets, while the Erlanger Health System board of trustees governs the hospital.

"We're obviously just sorting through the real big issues at this point," Coppinger said.

Two former Erlanger board chairs and members of Hamilton County's legislative delegation agree that pursuing a nonprofit model under Internal Revenue Code Section 501(c)(3) could benefit the public health system.

Mike Griffin - who served eight years as an Erlanger trustee, including as chair in 2018-19 - said the idea was tossed around frequently when he was on the board.

"I definitely think it's the right move," said Griffin, who's president and CEO at the Cleveland/Bradley Chamber of Commerce. "By working under that governmental authority, that forced us having public meetings, and it kind of put us at a competitive disadvantage. When you take away some of those disadvantages, I think that helps your overall bottom line."

State Sen. Bo Watson, R-Hixson, also agrees with the route Erlanger's taking but said it's ultimately up to the county commission to decide what's best for the hospital.

"I think that's a very good community discussion that the public ought to engage in, and I think the people from Erlanger and the people on the county commission have a responsibility to explain to the public what this means and explain to the public what protections exist for this public asset in the community," said Watson, a physical therapist and market director for therapy services at HCA's Parkridge Medical Center in Chattanooga.

(READ MORE: Path to financial stability for Erlanger remains unclear a year after private offer rejected)

Chattanooga attorney Russell King - a one-time Erlanger board chair who served twice on the board - from 1988 to 1995 and again from 2008 to 2014, making him the longest-serving trustee in the hospital's history - said most residents are unaware of Erlanger's importance to the community.

"There are very few counties in this country that own an asset like Erlanger. It's huge," he said. "How much is Erlanger worth? If you have a stroke, it's worth a whole lot. And there's other services they provide that no one else does."

King said he also remembers exploring different solutions for Erlanger's future.

"The truth of the matter is, we've lost a lot of employees to other hospitals, and it can be very competitive if you've got a doctor with a particular specialty that can bring something to the table," King said. "That's where Erlanger has a terrible competitive disadvantage, and it's not all because of the sunshine law. Part of it is the nature of the beast - providing high levels of uncompensated care."

Because Erlanger is a public, safety-net hospital, it treats more uninsured and underinsured patients who are often sicker and in poorer health than the patients who frequent its competitors. Last year, Erlanger provided roughly $150 million worth of uncompensated care, which ultimately means there's less money to go around for employees and other investments.

Current Erlanger board chair Jim Coleman said trustees are committed to maintaining Erlanger's status as a safety net hospital under the new model.

Contact Elizabeth Fite at or 423-757-6673. Follow her on Twitter @ecfite.