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Normally, Erlanger Health System would begin budget planning in April for the next fiscal year, which begins July 1. But these aren't normal times in health care.

Erlanger Trustee Jim Coleman, chairman of the Erlanger board's budget and finance committee, said the hospital board — which governs the public health system — will take another month to assess the impact of the coronavirus pandemic.

"We felt like we needed a full month's run rate on the impact of the COVID virus on the month of April, so we could get a better idea of how to rebase our expectations for the budget for fiscal year '21," Coleman said during the board's monthly meeting last week. "I suspect that we'll have several meetings in May to catch up."

COVID-19 has created many challenges for hospitals, and perhaps more so for essential hospitals such as Erlanger, which serve higher proportions of low-income and vulnerable patients, and tend to be the first receivers any time there are emergencies in their communities.

"Their patient mix means they have slimmer financial margins than most hospitals, even before the COVID-19 crisis," said Beth Feldpush, senior vice president of policy and advocacy for America's Essential Hospitals association.

Erlanger CEO Dr. Will Jackson spoke during the Erlanger board meeting about how the hospital has responded in light of the coronavirus and recent severe weather that killed 11 people across the region and destroyed the homes of five Erlanger employees.

Starting in mid-March, Erlanger's admissions "were drastically reduced" from suspending elective surgeries and emergency room visits declining due to the pandemic.

While the third quarter financial report — which runs from January through March — reflects these changes, Jackson said the fourth quarter — which runs from April through June — will be "much more difficult."

"The financial impact of COVID-19 has been truly staggering. We've seen that across the country in every industry, and it has hit the health care industry and acute care hospital portion of that industry very, very hard," he said.

Tennessee hospitals are experiencing a negative financial impact of approximately $1 billion per month due to the pandemic, according to an analysis conducted by the Tennessee Hospital Association and released Friday.

Erlanger's third quarter net income from operations was $4.2 million compared to a budget of $2.3 million. The positive quarter includes $11.6 million in government payments meant to offset Erlanger's cost of caring for uninsured and underinsured patients.

Overall hospital admissions were 7.7% and 9.3% under budget, and the hospital has 62 days of cash on hand.

Jackson said Erlanger is applying for "any and all stimulus funds" from federal and state relief programs.

"We made several very difficult, but necessary, cost-reduction decisions [including furloughs] early in this process. ... Hundreds of hospitals across the nation have done the same out of necessity," he said.

While Chattanooga hospitals have avoided a surge in COVID-19 patients thus far, Jackson said the hospital will remain prepared and vigilant as it begins to restart some elective procedures in May.

"Fortunately, most COVID-19 cases don't require hospitalization," Jackson said; however, "the COVID-19 patients we've taken care of at Erlanger have had the most serious symptoms."

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

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Staff photo by C.B. Schmelter / Then-Erlanger Health System Vice President and Chief Medical Officer Dr. William Jackson is seen in the POB room at Erlanger for an Erlanger Health System Board of Trustees meeting on Thursday, June 27, 2019, in Chattanooga, Tenn.
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