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

This story was corrected to mention that T.C. Thompson will be memorialized on the new outpatient center's history wall.

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Erlanger CEO Kevin Spiegel speaks to attendees in the lobby of the new Children's Hospital at Erlanger on Friday.

Erlanger's Board of Trustees rewarded President and CEO Kevin Spiegel with a $46,000 raise during its monthly meeting on Thursday, bringing Spiegel's base salary up to $964,000.

Linda Moss Mines, chair of the board's Management and Board Evaluation Committee, said the recommendation came after "careful consideration," and was based off Erlanger's expanding footprint, financial growth and stability as an organization.

"Leadership is paramount in accomplishing of our vision and goals," Mines said while addressing her fellow trustees.

In his CEO report, Spiegel covered a laundry list of the hospital's achievements from the past year, including being ranked the 10th largest public health care system in the United States, the largest employer in Chattanooga and the fastest growing health care organization in Tennessee. Erlanger has grown its net revenue between 13 and 15 percent for five straight years, Spiegel said.

"This was probably one of the most successful years this hospital has embraced. I salute all management and all the staff," he said. "We have a proven track record of handling multiple projects at the same time and being very deliberate I believe next fiscal year will even be stronger."

The board also approved a new, self-funded incentive plan for the CEO, vice presidents and certain directors and managers. In order to trigger the payout, the hospital must hit its fiscal year 2019 budget of $15.5 million, as well as meet quality, safety and service metrics. Erlanger must further exceed its budget to fully fund the plan.

Leaders received no incentive payout last fiscal year, and board chairman Jack Studer called the 2019 target "ambitious." Erlanger's net income barely broke even in 2018 at $526,913 — more than $4 million under budget — due to the high cost of implementing a new electronic medical record software.

Studer also acknowledged the role that converting to a new system played in the hospital's lackluster bottom-line, and that other well-known hospitals across the country have lost between $50 million and $100 million installing similar systems.

"It hasn't been the smoothest sailing, but compared to what it could've been, I want to personally lift that up and say thanks," Studer said.

The board also authorized a new professional services agreement with Regional Obstetrical Consultants for OB hospitalist services to handle all unexpected deliveries at the Baroness and East campuses.

Erlanger officials announced the new children's outpatient center — the first phase of the new children's hospital — will be named the Kennedy Outpatient Center after the family who donated $5 million to the project. The current hospital's namesake, T.C. Thompson, will be memorialized on the history wall of the new outpatient center, and a new children's hospital name will emerge as Erlanger moves into the next phase of fundraising and construction.

Contact staff writer Elizabeth Fite at efite@timesfree press.com or 423-757-6673.

This story was updated Oct. 5, 2018, at 2:10 p.m. with more information.

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