Roy Exum: Now Come The Trustees

Wednesday, February 20, 2013 - by Roy Exum
Roy Exum
Roy Exum

A new governance structure for Erlanger Hospital is expected to sail through the Senate of the Tennessee Legislature tomorrow and, with Kevin Speigel just being chosen as the medical center’s Chief Executive Officer, Chattanooga’s Level 1 trauma center will hopefully enjoy a renewed atmosphere of reason and stability in the coming weeks.

But as both Hamilton County Mayor Jim Coppinger and Rep. Gerald McCormick agree, perhaps the biggest factor in the hospital’s return to prosperity will be decided when a new Board of Trustees is chosen in the coming weeks to give much-needed stability after Erlanger’s present leadership has suffered $13 million in losses over the last 18 months of the fiscal calendar.

“We need a high-profile board of people the community trusts,” McCormick said hours before Spiegel was chosen, “and until now it has been premature to discuss any names. Once the bill is approved by the Senate, which it should easily do on Thursday, we will go before the County Commission and then begin the process of identifying the new board.”

According to the way the bill is written, County Mayor Coppinger and the local delegation will meet together to select seven of the nine persons who will soon direct the hospital and provide the leadership and oversight that Speigel will need to restore credibility to Chattanooga's largest health provider.

The other two new board members will be the hospital’s chief of staff, chosen by the hospital’s attending physicians and rotating on a yearly basis, and a member from “academia,” such as a professor from the UT College of Medicine that is located near the Erlanger campus and would place another physician on the board.

The “academic” representative will be chosen by the new board once it is installed, explained Rep. McCormick, and both he and County Mayor Coppinger expect some members of Erlanger’s outgoing board will be asked to serve on the new group that will be selected by the politicians. After the new board is seated, it will be solely responsible for all future appointments to the hospital’s board.

Spiegel’s task is daunting, especially in the early days as he must assemble an executive staff, acquaint himself with 4,000 employees as well as a new community, and tackle a “to do” list that begs attention from every conceivable direction. The biggest order is to stop the financial hemorrhaging; the hospital has lost $2.5 million in the first half of this fiscal calendar and the dysfunctional leadership has created serious problems in other areas where there are few short-term solutions.

That’s why the new board is crucial; in Speigel’s initial months he will need both direction and wisdom from the board and it is believed a change to a 501c3 non-profit financial structure is almost imperative from the beginning. An unsettled medical staff, a lack of capital improvements, poor middle management, a bewildering technology network and a lack of employee morale are just some of the other hurdles awaiting a forceful and decisive CEO and his team.

“We are well aware that the new board will have its hands full,” said County Mayor Coppinger, explaining that the selection process will actually be a team effort between his office and the local delegation of legislators. “Everybody realizes that this can’t be a collection of personal friends or relatives. The new board will be vitally important from the very start.”

McCormick said he had already thought of some candidates “and I am sure that others who will be involved know how important Erlanger Hospital is to our region. I think we’ll look at a lot of candidates but, honestly, this won’t be a public process. We wouldn’t want any citizen who we might discuss to be put in a position of explaining why they were or weren’t chosen.”

The new bill will have to be ratified by a two-thirds vote of the County Commission, but that isn’t expected to be a problem. The county commissioners know what has befallen Erlanger and are undoubtedly pleased the legislature has stepped forward to make changes that will better the hospital.

Hamilton County currently gives Erlanger Hospital $1.5 million every year but with indigent care rising and still-puzzling federal stance, Erlanger officials have requested a greater involvement from the commission. One commissioner has requested a “short list”  of trustee candidates but Coppinger has said there is no short list.

For all practical purposes, the day-to-day operations at Erlanger are being handled by a team of consultants from PriceWaterhouseCooper. Once the new board is seated and Spiegel’s team is in place, it is expected the consultants will be phased out.

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