Roy Exum: Erlanger Will Be Fine

Wednesday, March 5, 2014 - by Roy Exum
Roy Exum
Roy Exum

I was as saddened as any Erlanger Hospital employee over the weekend when a barrage of emails arrived from hospital friends. Each bemoaned the sad news that continuing losses had forced the determined management team to temporarily freeze paid-time-off accruals for 4,000 people I care a lot about. In January the hospital lost $3.8 million and February’s finances are going to be just as bad.

My first reaction was to thank the good Lord not a one lost a job. The second was to remember a very solid conviction that I feel is very true about Erlanger: “We’ll get through this. It won’t be painless. It won’t be quick. But God will use this mess for good. Don’t be foolish or naïve. But don’t despair either. With God’s help we’ll get through this.”

That’s a quote from Max Lucado’s new book, one he wrote for “help and hope in turbulent times,” that I’ve already given away a bunch to people who are struggling after first applying it to myself. And by grasping its principles, I am totally convinced Erlanger is on the right track. Sure, we grit our teeth over $92 million in indigent care yet we must treat any and all who need help, regardless of cost.

The first thing Erlanger employees must realize is what close observers have believed for at least 10 years. Upper-level management until now has been a colossal mess. To rehash blatant stupidity accomplishes nothing but to study it shows where the hospital made some heavy mistakes, which are now being corrected. Some crucial funding was ignored, planning was skewed, and soon there were so many problems that, candidly, CEO Kevin Spiegel hardly knew where to start.

While he has hardly been here for a year, I am totally sold on the guy. Next week he is taking a crowd of hospital experts to Washington to lobby for restoration of Disproportionate Share Funding and a share of Public Hospital Share Funding. There is no reason to believe he will not be successful because Erlanger is certainly entitled to these funds. Why Erlanger hasn’t gotten them is anybody’s guess but proof that past blunders carry a cost.

Off to a lousy start in 2014, add the fact that last year Erlanger lost $13.9 million in funding it should have received. With indigent care increasing by $8 million this year alone, state and federal legislators can’t ignore the fact that public hospitals all over the country are in trouble. What sincere Erlanger employees should do is Google “hospital layoffs” and immediately they will learn that while a freeze on PTO accruals is hard to stomach, it is nothing compared to feeding an unemployed one.

I am convinced Erlanger management is trying as hard and as valiantly as is humanly possible. There is an influx of positives that will enhance medical care, from the addition of new staff physicians and an exciting hospitalist group. There is a $10 million commitment to better food service and a greater attention to areas like development, public relations and government relations that will all be for the greater good.

Erlanger has too many pluses for anything tragic to happen. As the region’s Level One trauma center, there is no question it is the best emergency center within 150 miles and, with the UT College of Medicine increasing its involvement, it is a favorite for the bright young doctors who come through the programs and who want to settle here. A new 501c3 operations model, now working through the legislature, will enhance governance and stability at the hospital and leaders in city and county government are being encouraged to better support the public institution.

The biggest problem facing the hospital is the annual review of bond covenants. Erlanger has not met expectations in the past two years but, with Spiegel at the helm and now able to explain the steps the hospital is taking toward compliance, there is the chance that a rebounding Erlanger will be viewed in a favorable light. So much depends on when funds due to Erlanger can be freed up. “I’ll lift the PTO freeze the day it happens,” he promised.

Donnie Hutcherson, the chairman of the board, and other trustees are eager to avoid any layoffs, hoping instead that groundwork already laid by Spiegel and Vice President Steve Johnson will soon be fruitful. The four days of snow that recently hampered outpatient services will show up in the February financial report but the addition of two orthopedic groups and other surgeons will hopefully increase surgical and in-house revenue starting this month.

I believe the future is bright for Erlanger in the coming months – I really do – but when “a perfect storm” of problems collided in such a way that the best temporary fix was to freeze paid-time-off accruals, I have to believe it to be a masterstroke rather than fire almost 1,000 employees like Vanderbilt Medical Center was recently forced to do.

Look at virtually any state right now and you’ll find hospital layoffs. At Erlanger an alternative way will hopefully prove “tough times don’t last, tough people do.” Don’t fret – we’ll get through this.

* * *

Three of Erlanger's most notable physicians will be honored by the Baroness Erlanger Foundation tonight when the annual “Dinner of Distinction” is held at the Chattanoogan Hotel. Drs. Blaise Baxter, Jim Creel and Tom Devlin will be recognized for their continuing contributions to the community while former County Mayor Claude Ramsey, who later served as Lt. Governor under Bill Haslam, will be saluted for a lifetime of service to others. A reception will begin at 5:30 p.m.

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