Tennessee bill would revamp Erlanger board, remove Chattanooga's representation

Tennessee bill would revamp Erlanger board, remove Chattanooga's representation

April 16th, 2014 by Andy Sher and Kate Belz in Local Regional News

Erlanger tile


The new bill changes the way Erlanger Health System board members are appointed.

OLD STRUCTURE (12 trustees total)

• City of Chattanooga - 4 appointments

• Hamilton County - 4 appointments

• Legislative delegation - 1 appointment

• Chattanooga-Hamilton County Medical Society - 1 appointment

• Hamilton County Chancellors - 1 appointment

• Erlanger chief of staff - Trustee

NEW STRUCTURE (11 trustees total)

• County - 6 appointments

• General Assembly - 4 appointments

• Erlanger chief of staff - Trustee

A last-minute bill scheduled for a vote today in the General Assembly could overhaul Erlanger Health System's board and remove Chattanooga city government's long-held seats on the panel.

The bill - which was introduced Tuesday in what is expected to be the final week of the legislative session - strips the city's and Chancery Court judges' appointments to Erlanger's board of trustees, and has Hamilton County government and the local legislative delegation calling the shots on who will sit on the revamped board.

Lawmakers argued that the city's representation should be cut from the board since it stopped funding the public hospital three years ago.

"We're taking appointments away from the city ... because they no longer contribute money to Erlanger," said bill sponsor Rep. Mike Carter, R-Ooltewah, of the city's four appointments. "We're giving it to the people who put money in the game."

By the same token, the two chancellors would lose their one appointment because they, too, have "no skin in the game," Carter said. An additional appointment, made at the recommendation of the Chattanooga Hamilton County Medical Society, also would disappear. Erlanger's chief of staff would retain a seat on the board.

While the city has not funded Erlanger since 2011 when a sales tax agreement between the city and the county expired, it has continued to have four appointees to Erlanger's board.

Erlanger CEO Kevin Spiegel has redoubled efforts to win funding from the city, recently putting in a budget request for $5 million.

City officials said Tuesday they have a good working relationship with Erlanger leadership and have been reviewing the budget request, but indicated the bill complicates that discussion.

"It would be difficult for the City to fund an organization like Erlanger if our voice is not represented on the board and if we are not part of future discussions regarding its direction," said Brent Goldberg, the city's deputy COO, in a statement.

Sen. Todd Gardenhire, R-Chattanooga, who is sponsoring the bill in the Senate, said the entire delegation supports "taking the city out of it."

"If they ever want to come back in and participate and support Erlanger and the indigent people downtown and all, that's fine, they can be involved in it [appointments]," he said.

With the bill, the total number of hospital trustees would drop from 12 to 11.

Instead of having four appointments, Hamilton County's mayor would have six, subject to approval by county commissioners.

Appointments by Hamilton County's seven-person legislative delegation would rise from one to four. Erlanger's medical chief of staff would be the 11th.

The new bill was written without Erlanger input, said Steve Johnson, hospital vice president of government relations.

"We don't have reason for immediate concern, but we are still learning about the bill and what it means," Johnson said. "We know the delegation is supportive of Erlanger and has its best interest at heart."

The new bill is also unrelated to legislation that was introduced by the delegation earlier this session. That bill would have reshaped Erlanger's governance structure, granting trustees the ability to create a separate operating board with trustees' continued oversight.

But delegation members pulled the plug on the bill, which was written with Erlanger's input, saying the hospital had enough on its plate with attempts at coping with debt, bond covenant woes and efforts to obtain additional federal funding to treat poor and indigent patients.

Hamilton County officials recently decided to help Erlanger tap into a federal fund that could help the hospital draw down $30 million. The hospital is still seeking an increase from the county's annual $1.5 million contribution.

The city so far has been noncommittal about providing money to help draw down the federal funds or reinstating its annual contribution.

A recent report from a national public hospital association found that among public hospitals throughout the country, Erlanger Health System provides the greatest amount of safety-net care for the least amount of local government funding.

The city has had two vacant appointments for four months, since former trustees Kim White and Jim Worthington cycled off the board in November.

The new appointments will be made once the terms of the current board members expire, the bill states.

Members from the medical society did not provide a comment by press time Tuesday evening, and Hamilton County Chancellors W. Frank Brown III and Jeffrey M. Atherton could not be reached.

Gardenhire said the decision was made to take away chancellors' appointment because it's "not appropriate."

"This has to do with getting the board structured where it can operate without the political influence and the lack of support," he said.

Earlier Tuesday, Carter whisked the private act through the House Local Government Committee and then the Calendar and Rules Committee.

There was little discussion because state lawmakers rarely question colleagues on private acts.

Gardenhire said he believes he will call the bill up today. In the Senate, private acts are read twice on the floor and voted on the third time.

If passed, the private act would only take effect upon approval by two-thirds of the Hamilton County Commission.

The delegation is moving the Erlanger board restructuring bill as lawmakers scramble to wrap up their annual session by week's end.

Representatives are acting on dozens of major issues that have been delayed until the last minute. For example, a joint House and Senate conference met Tuesday and recommended that the General Assembly pass a one-year delay in the student testing component for Tennessee's Common Core education standards.

In other action, Gov. Bill Haslam's school voucher bill was shelved in a House committee. But it could be resurrected on a Senate bill. Senators, meanwhile, also approved an anti-methamphetamine bill that differs dramatically from the House version.

Also Tuesday, the House approved and sent to the governor legislation to create a program that would cover tuition at two-year colleges for any high school graduate. The Senate approved the bill on Monday.

Contact staff writer Andy Sher at asher@timesfreepress.com or 615-255-0550.

Contact staff writer Kate Harrison at kharrison@timesfreepress.com or 423-757-6673.