The Erlanger Health System is playing the same off-key tune that the Tennessee Valley Authority has in recent years: giving outrageous bonuses to top management at a time when their workers have been cut or had their vacation time frozen as their organizations have cried woe, woe, woe for fiscal drains that at times even seemed to put them in deficit modes.
Then along came miracles of bad weather that upped electricity use and, for Erlanger, an infusion of $19 million in federal money. Then suddenly, at year's end, top managers could see twinkling lights, good cheer and extra coin.
In Erlanger's case, $1.7 million in bonuses averaging $17,100 will go to 99 managers. Of course, that "average" is skewed considerably by the $234,669 bonus -- yes, bonus -- paid to Erlanger CEO Kevin Spiegel. That six-figure bonus will bring his total compensation this year to $914,669. Erlanger trustees also voted to give Spiegel a 10 percent raise next year, upping his base pay to $748,000. Meanwhile, they approved a 2 percent non-budgeted pay raise for hospital employees.
Ten percent for Spiegel and 2 percent for employees.
Talk about tone deaf. Clearly, the hospital's 1 percenters -- like TVA's -- are oblivious to the lives of their rank-and-file workforce.
Erlanger trustees said the management "incentives" were merited after the hospital came back from three years in the red and posted $18 million in operating income by year's end.
Never mind that these simple figures would indicate they still would have been $1 million in the red this year without the federal money lawmakers went to the mat to help get after Spiegel begged for their help. Never mind that in November, Erlanger retirees got letters saying their retiree health insurance would be canceled on Dec. 31 after Erlanger, Hamilton County's fourth-largest employer, dropped retiree medical coverage citing "rising health costs."
Perhaps the reason should have read: rising management bonuses. When the retiree plan change was announced several months ago, Chief Administrative Officer Gregg Gentry said the plan's cost had risen to $1.2 million a year.
That cost was too high but bonuses totaling $1.7 million weren't?
The lavish bonuses are clearly more than than just demoralizing to workers who had their vacation time curtailed and now are paying more for their health benefits, according to one nurse who says morale is at rock bottom. The bonuses rightly mark a game-changer for much of what Spiegel has said he envisions for Erlanger's future.
That future, in Spiegel's vision, would include a new dazzling children's hospital that no one has put a price on but one small portion -- the ambulatory center -- has been estimated at $30 million. Spiegel's wish list also includes a charter change to make the public hospital a 501(c)3 nonprofit to give its board more freedom to do less business in the public eye -- something hard to imagine since this board already makes five-minute decisions with no public discussion on things that come out of the blue, like these bonuses.
Although workers may be powerless to fight their disappointment, our local delegation of Tennessee legislators are not.
"I was extremely disappointed. I felt betrayed. I felt embarrassed," Republican state Sen. Todd Gardenhire told Chattanooga Times Free Press reporter Kate Harrison Belz. "I'm going to do whatever I can do so that a public institution like that is more answerable to the public, and not just a few individuals."
Democratic state Rep. JoAnne Favors, a former health manager, also is angered: "This is a community hospital. You have to make decisions that will consider how it will impact the community," she said. "I was talking with other government entities to get more funds from a local government level. I feel like I have mud on my face now."
Now the critics -- including us -- see Spiegel's visions as nonstarters given his and the trustees' wink-wink fiscal shell games.