Erlanger Officials Say Walker, Catoosa Officials Could Stop Foreclosure: Say Debt To Erlanger Approaching $30 Million

  • Thursday, October 16, 2014
Erlanger's Gregg Gentry faces Hutcheson audience
Erlanger's Gregg Gentry faces Hutcheson audience

Speaking to an overflow crowd of Hutcheson Hospital employees, Erlanger Health System representatives on Thursday night said Walker and Catoosa County officials could stop the current Erlanger foreclosure effort.

Gregg Gentry, an Erlanger senior vice president, said the counties who are on the hook for $10 million each, could waive the foreclosure provision and deal with the debt themselves.

Those in the crowd included Walker County Sole Commissioner Bebe Heiskell, who recently raised taxes, and Walker County Attorney Don Oliver. They did not speak at the session.

Mr. Gentry also said the total debt to Erlanger from Hutcheson is now approaching $30 million. It includes an agreed $20 million in help that was provided to the financially-ailing hospital as well as $550,000 Erlanger furnished when Hutcheson was unable to meet an upcoming payroll.

He said when Erlanger took over at Hutcheson, the Fort Oglethorpe facility was losing $1.5 million a month. He said, at the end of two years of Erlanger management under Roger Forgey, it was making $200,000-$300,000 a month. He called that turnaround "almost unimaginable."

Mr. Gentry told the crowd packed into a small room at the Colonnade on Battlefield Parkway, "Erlanger is not about putting Hutcheson out of business."

He said if a foreclosure moves forward that it will force the hospital to be sold. He said it is uncertain who would wind up owning it.

Mr. Gentry said Erlanger left Hutcheson after the two years because Hutcheson officials decided they wanted to lease the facility. However, he said when efforts were made to obtain the lease, there was very little interest shown. He said there was a long period of negotiation for Erlanger to continue at Hutcheson, but the talks finally broke down.

A number of hospital employees accused Erlanger of draining patients away from Hutcheson during its management and of not providing the promised physicians. Mr. Gentry said when Erlanger took over the census, which once was 150-200, had dropped to 15-20. He said it continued to slide, but Erlanger eventually got it to 25-35.

He said there was discussion of Erlanger providing Hutcheson with 15 physicians, but he said that was not in the final agreement. He said it did furnish a new emergency room team, hospitalists, and certain specialists under call arrangements - some of which he said are still in place.

Greg Cantrell of Nashville, a consultant to Erlanger involved with the Hutcheson process, said the current health care climate is making it difficult for community hospitals to survive - especially on their own. He said, "They need a partner. They should be working their tail off to get a big brother."

He said if Hutcheson was to be rebuilt "you wouldn't start out with 500,000 square feet" and would not focus on various surgeries. He said, "If I am going in for an operation I am going to a place that does 10 a day, not one a month."

He also stated that, in addition to the Erlanger debt, that Hutcheson has $60 million in liabilities. He said about half of that is owed to Regions Bank, and he said millions are due to Medicare for years of over payments that ended under the Erlanger management.

Mr. Cantrell said when prior Hutcheson management spent $8 million on a new front lobby "it was like putting lipstick on a pig." He said no money was spent at the time on improving the patient care areas.

He said Hutcheson should consider selling its nursing home if it could get some $7 million for it. That is included in the Erlanger foreclosure effort. Mr. Cantrell said if Erlanger does get the nursing home, it would not make sense to close it.

Mr. Gentry denied a rumor that Erlanger is planning to build "Erlanger South" on property it owns on Battlefield Parkway. He said a hospital in North Georgia is not in Erlanger's long-range plan.

Several speakers, many of whom wore "Save Hutcheson Hospital" T-shirts, said the two counties who guaranteed $10 million each, would cause a heavy burden on their taxpayers if they have to make good on that and the accumulated debt.

They also said many in the hospital have decades of service and are some of the most devoted hospital employees to be found.

Hutcheson Hospital has 900 employees. Erlanger said it employs 800 North Georgia residents at its facilities.

Speakers were lined up
Speakers were lined up
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