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Staff photo by C.B. Schmelter / CEO Kevin Spiegel makes his way into a meeting room at Erlanger on Thursday, Aug. 29, 2019 in Chattanooga, Tenn.

This story was updated Wednesday, Sept. 11, 2019, at 8:45 p.m. with more information.

Erlanger Health System President and CEO Kevin Spiegel has left his post at Chattanooga's largest hospital after six-and-a-half years, according to board Chairman Mike Griffin.

The hospital's board of trustees will select Spiegel's successor at its regularly scheduled meeting on Sept. 26, according to an Erlanger statement. In the interim, the board will continue to work closely with existing hospital leadership, Griffin said.

"There is no question Erlanger's staff and physicians will continue to provide exceptional care to their patients and the many communities they serve," Griffin said, assuring Erlanger's workforce, medical staff and surrounding communities there will be no disruption in business or service during the transition.

It is unclear whether the board will pay Spiegel any severance, which could amount to as much as 24 months of salary or $1.93 million, according to a copy of his latest employment agreement.

Spiegel said Wednesday afternoon that the decision for him to "separate" from the organization was mutual and any further discussion would be premature.

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Staff photo by C.B. Schmelter / Erlanger Health System President and CEO Kevin Spiegel, left, looks on during a meeting at Erlanger on Thursday.

"We're still working out the details, and hopefully that'll be complete by the board meeting in two weeks," Spiegel said. "This is a great hospital, and it's a great organization, and it's only going to do better and better things."

Spiegel's departure comes less than two weeks after trustees held a special meeting to discuss the CEO's future; however, pro-Spiegel pleas were ultimately unable to save his job after patient safety concerns brought forward by a group of leading physicians surfaced in June.

In his role at the helm of what has become the nation's 10th largest public hospital system, Spiegel oversaw operations of six acute-care hospitals, a behavioral health hospital, a multi-specialty physician group practice and an academic teaching program affiliated with the University of Tennessee College of Medicine. The health system is the largest regional provider of care for indigent patients and includes the only children's hospital within 100 miles, the fourth largest interventional stroke program in the United States, the country's seventh busiest emergency department and the region's only Level 1 trauma center, which treats the most severe injuries.

Spiegel took over executive leadership at Erlanger in April 2013 after serving as CEO at Methodist Healthcare in Memphis for five years.

He led the health system, which lost nearly $32 million from 2011 to 2013, out of financial turmoil. Highlights of his tenure include a 92% increase in net patient revenue, dramatic market share growth and improved bond ratings.

Those achievements, combined with new philanthropic initiatives, allowed Erlanger to take on major capital projects, including Erlanger East Hospital, a $100 million electronic health record system and a new children's outpatient center — the first phase of a new children's hospital and 14-story medical tower. In the process, Erlanger became the largest employer in Chattanooga and the fastest-growing health care organization in Tennessee.

Less than a year ago, Erlanger's board of trustees rewarded Spiegel with a $46,000 raise, bringing his base annual salary up to $964,000.

Trustee Linda Moss Mines said during that October 2018 board meeting the recommendation for the salary increase came after "careful consideration" and was based on Erlanger's expanding footprint, financial growth and stability as an organization.

"Leadership is paramount in accomplishing our vision and goals," Mines said at the time.

However, that leadership was not without controversy. Spiegel has acknowledged that his management style is one of "disruptive innovation," which created contract disputes with physician groups, including cardiologyradiology and neonatology, as well as the University of Tennessee College of Medicine.

He butted heads with politicians after working to get Erlanger a $19 million payment from the federal government. State and Hamilton County officials used the words "disappointed," "stunned" and "troubled" to describe their reactions to learning that the money would count toward Erlanger's bottom line, triggering executive bonuses — including a $234,669 performance incentive for Spiegel — months after the hospital was in danger of ending the year in the red.

He orchestrated a lawsuit against Hutcheson Medical Center in Fort Oglethorpe, Georgia, after a management deal between the two hospitals collapsed in 2013. As a result, Erlanger received nearly $15 million in payments from Catoosa and Walker counties. The ordeal left many North Georgians bitter and prompted state Sen. Jeff Mullis, R-Chickamauga, the chairman of the Senate rules committee, to write a letter to the Georgia Department of Public Health advocating against Erlanger's later attempts to expand into the region in favor of a rival hospital — CHI Memorial — that now owns and operates the former Hutcheson.

Questions surrounding conflicts of interest among Spiegel and hospital trustees arose in January, when Tennessee state Sen. Todd Gardenhire, R-Chattanooga, introduced a bill that would prohibit hospital authorities such as Erlanger from signing employment or service deals with trustees until at least 12 months after their tenure ends.

Hospital records later obtained by the Times Free Press revealed that in the months before that bill was filed, Erlanger executive management held contract discussions with former trustee Jack Studer, who at the time was board chairman, and trustee Dr. Blaise Baxter.

In May, a letter from the Medical Executive Committee — a group of top physicians who oversee the quality and safety of medical care at Erlanger — was sent to Griffin and later obtained by the Times Free Press.

The letter detailed concerns over chronic operational issues, including inefficiency, understaffing, poor morale and policies that cause overcrowding in the main campus emergency department and operating rooms. As a result, the committee voted unanimously "no confidence in the structure of the current Executive Leadership to ensure quality and safety of patient care."

"Despite over 3 years of complaints and concerns by patients and physicians, hospital management has been ineffective in addressing these issues. There exists a lack of accountability in senior management who are either unable or unwilling to effect necessary changes to insure patient safety," that letter states.

In addition to Spiegel, other key administrators who have left Erlanger since the letter came out include Rob Brooks, Erlanger's former executive vice president and chief operating officer, and Pam Gordon, Erlanger's former vice president of patient safety and quality.

Erlanger is governed by an 11-member board of trustees: Mike Griffin, chairman; Philander K. Smartt Jr., vice chairman; Linda Moss Mines, secretary; Dr. James P. Bolton, chief of staff; Steven R. Angle; Dr. Blaise Baxter; Sheila C. Boyington; Dr. R. Phillip Burns; John F. Germ; James F. "Jim" Sattler; and Gerald Webb II.

The county mayor appoints six trustees with approval from the Hamilton County Commission, and the local legislative delegation appoints four trustees by a majority vote. The medical chief of staff also serves as a trustee.

Hamilton County Mayor Jim Coppinger said Wednesday that he didn't know the details surrounding Spiegel's departure, but Erlanger remains an essential part of the area's economy, health care system and quality of life.

"Erlanger is and will continue to be a really important part of not only Hamilton County but the region," Coppinger said. "Regardless of the leadership, I hope the community continues to realize the importance of Erlanger and the services it provides as we go through this transition and that they continue to support Erlanger hospital."

Contact Elizabeth Fite at efite@timesfreepress.com or 423-757-6673.

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