Cooper: Hutcheson not too big to fail

Cooper: Hutcheson not too big to fail

October 20th, 2015 by Clint Cooper in Opinion Free Press

An aerial view of Hutcheson Medical Center in Fort Oglethorpe, Ga.

Photo by Dan Henry /Times Free Press.

To borrow a term from the Great Recession, Hutcheson Medical Center may have thought it was too big to fail.

Although that term was first popularized in a 1984 congressional hearing, "too big to fail" took on new meaning with the need for the survival of certain financial institutions and corporations, given their size and interconnectedness, after the U.S. financial downtown in 2008.

Hutcheson, which expanded mightily in the last 25 years with the latest services it thought the area needed, is failing. With $80 million in liabilities, it filed for Chapter 11 bankruptcy in November 2014, a move that allowed the hospital to take a breath to create a reorganization plan.

By August, no plan had been filed, and the hospital was another $6 million in debt. At a Sept. 2 court hearing, hospital officials said a buyer was supposed to make a formal offer within a week. No such deal has been made.

Last week, a motion was filed to begin the process to set up a private auction for the hospital and its assets. On Wednesday, the Fort Oglethorpe, Ga., hospital's attorneys are expected to meet with a bankruptcy judge.

More than 125 employees have been laid off in two months, including some employees of the Parkside at Hutcheson nursing home.

On Friday, the hospital had only seven patients and only "skeleton crews" were reported to be serving various departments.

The hospital opened its doors as Tri-County Hospital in 1953 and as recently as 1997 was named Hospital of the Year by the Georgia Alliance of Community Hospitals and Healthcare Management Advisors. Earlier this decade, the picture began to darken when the now-Hutcheson, then about $60 million in debt with not enough patients to pay for the expansions, agreed to allow Erlanger Medical Center of Chattanooga to run its day-to-day operations. But the two split in 2013, and the two parties countersued each other, Erlanger saying it wanted to be paid and Hutcheson saying Erlanger didn't live up to its end of the bargain.

Northwest Georgia, with no acute care facility between Dalton and Chattanooga, needs a hospital that serves the health care needs of Walker, Catoosa and Dade counties. It need not be a full-care hospital like Erlanger, CHI Memorial or Parkridge, with specialties and sub-specialties, but a hospital where day surgeries could be performed, minor emergencies could be handled and routine illnesses could be treated would be ideal.

Hutcheson on the Parkway does some of that now, and it may be that services at both Hutcheson locations can be consolidated there and expanded if needed.

Unfortunately, it may be the hospital and its assets have to be sold for there to be a clean break. In other words, it actually wasn't too big to fail.

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