Roy Exum: Erlanger’s Great Revival

Monday, February 24, 2014 - by Roy Exum
Roy Exum
Roy Exum

On the surface it may not seem like much, just a technicality or a pesky interchange of words, but a crucial bill introduced last week in the Tennessee Legislature will pave the way for a new form of governance at Chattanooga’s flagship hospital and it is a literal Godsend for the hundreds of thousands who are served by Erlanger, the region’s Level One trauma complex, each and every year.

As state Senators Todd Gardenhire and Bo Watson both grasp, a new 501c3 model of governance has been needed for years in today’s medical world where changes occur sometimes by the week. And as Hamilton County representatives such as Gerald McCormick, Mike Carter, JoAnne Favors, Richard Floyd, and Vince Dean will unanimously agree, the 800-plus bed medical center plays the most vital function to the citizens' welfare of any entity in our entire area.

The bill, which will gratefully amend the now-archaic Private Act of 1976 and the Private Act of 1977, is expected to take between four-to-six weeks to work its way to the governor’s desk in Nashville and, once signed, actual implementation will probably take over a year. But, as the hospital’s Steve Johnson explained, “It will put Erlanger in a position to offer the best health-care product in its history.

“The present-day system, I am sad to say, should have been updated years ago,” the hospital’s vice president for government relations said. “As we have embraced our new leadership and as our Board (of Trustees) has evolved into what I personally feel is the most-able we’ve had, everybody realizes that a modern method of governance is crucial to our success. This is a huge step towards making the hospital the institution that it ought to be.”

Under the new plan, the Board of Trustees would remain active and in place but a separate board, smaller and more adept in immediate decisions, would be formed as a constant ally to the hospital’s day-to-day leadership headed by the dynamic Kevin Spiegel, who was hired just 11 months ago. “Before Kevin was hired the discussion for a 501c3 model was already well underway. There are actually very few public hospitals today where there isn’t a similar arrangement,” Johnson said, “and we are all very excited about it.

“There are so many advantages but we feel it is important for any transformation to include our present board, our public input, and certainly the transparency a public hospital owes to the community. Believe me, there is no hidden agenda or any motive other than being the best we can be. Our area legislators have been wonderful in understanding what Erlanger needs and recognizing ways they can help Erlanger meet the needs of the people we serve.”

With a payroll of almost $300 million and operating expenses well over $550 million, the new governance structure will enable the famed 817-bed hospital to operate in a much more fluid and strategic way. The 501c3 structure is much more appealing to philanthropy organizations and, at a time when indigent care at Erlanger is quickly creeping towards $90 million a year, Johnson will tell you, “We need all the help we can get.”

Rep. McCormick, the House majority leader, tried to obtain a 501c3 designation last year but the wording was troublesome to some on the Hamilton County Commission. The new bill, implemented by Senator Gardenhire and Rep. Carter last week, employs a different method to reach Governor Bill Haslam’s desk and it is believed there will be no opposition to the timely document.

Dr. Dan Fisher, the hospital’s present chief of staff, said the 501c3 effort will have “a major impact” on the hospital, explaining in a letter that once in place the new model will “effectively focus resources on quality patient care, and not on administrative functions that are outdated and unnecessary.  It will allow Erlanger to move quickly and decisively to respond to current market conditions.” 

Better yet, when the present-day bill becomes law, it will give great momentum to a long-awaited revival of sorts at Erlanger. After years of poor oversight and mounting problems that have resulted in millions in losses in most-recent years, Erlanger is today experiencing a marked transformation on its own. Those who have watched the hospital endure hardships over the last decade are encouraged.

Profits have replaced losses in the short time Spiegel has been the CEO, and new COO Robert Brooks has been hired to join chief administrative officer Gregg Gentry and chief financial officer Britt Tabor on a sure-footed executive team. A steady infusion of new doctors and staff has created a brightness to replace the decline and with positive changes beginning to be more noticeable in almost every area, there is even the whisper of a state-of-the-art children’s hospital in the future.

Spiegel has consistently said the turn-around progress will take time but many, including several key board members, have been quite impressed with the rapid progress in less than a year since he took office last April. And while the new 501c3 method will take months to implement at an institution as big and as demanding as Erlanger, the outcome will be every bit as promising as our legislative delegation is now betting it will be.

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