Roy Exum: Spiegel’s First-Year Win

Friday, April 4, 2014 - by Roy Exum
Roy Exum
Roy Exum

When Kevin Spiegel sent a blanket email to Erlanger Hospital employees on Tuesday, it said much more than he intended. The welcome missive informed the hospital’s 4,000 employees that due to a miraculous $30 million in funding that should arrive within a matter of weeks, the freeze on employees’ paid time off accrual would be lifted much sooner than expected. It also signaled the hospital itself was no longer in somewhat of a financial “intensive care.”

But the far bigger message to those who have made the vast medical center into Chattanooga’s top primary health care provider was that for the first time in recent years, every employee has viable proof the tireless Spiegel is sincere and is being honest when he promises he’ll right the struggling ship and steer it on a smooth journey in the weeks and months ahead.

The thrilling announcement from The Centers for Medicare and Medicaid Services came on the very day Spiegel quietly celebrated his first anniversary in the CEO’s chair. His has been a huge struggle, one that required endless trips to Washington and Nashville while wrestling with a myriad of problems that come when you are not just the region’s Level 1 trauma center but also must swallow and digest over $92 million in indigent care.

“The money from the PHSP (Public Hospital Supplemental Payment) pool is a Godsend and we are thrilled the weight of severe cost-cutting measures has been lifted, but you know as well as I do we’re still at the bottom of the barrel in where we hope to be. Yes, we should have enough money to lift the paid-time-off freeze by the end of the month but we have to now focus on our bond covenants so our bondholders can see we really are coming around. And we are!”

Spiegel, lavish in his praise of Senator Bob Corker and Corker’s top aide, Todd Womack, said that Marilyn Tavenner, who heads Medicare, immediately recognized Erlanger’s plight “and is one of the great heroes in Washington. She was simply wonderful because she was able to sort through a lot of things that were wrong and make them right.”

Spiegel also said, “I have just met with (County Mayor) Jim Coppinger and he’s another who realizes the great importance of an intergovernmental agreement where Erlanger must ‘loan’ the county $10 million in order for Hamilton County to then use it for a transfer in order for the hospital to get $20 million in return. This is more money to offset uninsured care and we deserve it.”

Erlanger had heavy losses in January and February but, with the freeze on the time off accrual, the hospital is expected to show a profit for March when the month’s figures are released. “We expect an upturn in patient services – it happens every spring – so I am optimistic as we head forward,” the CEO said.

Inexplicably, Erlanger had been left out of two federal pools that offset indigent care and Spiegel was quick to notice the disparity after he assumed Erlanger’s leadership last April. “I think it is very important to realize no other hospital got any less money than they should have because Erlanger is suddenly getting its share.

“On the other hand,” he added with a laugh, “there are a couple of Tennessee hospitals that probably owe us a thank-you note because our efforts actually increased their funding. We simply wanted our fair share of what is available to hospitals that help people regardless of their ability to pay. We are the safety-net hospital of our region and we aren’t going to deny emergency care to anyone from North Carolina, Georgia or Alabama who comes to us for help.”

A recent national study found that Erlanger receives the smallest amount of government funding for a hospital of its size in the entire country. “When I show people what we are going through, they wonder how we have survived, much less how we are still in operation. It is extremely gratifying to suddenly have the ability to do what we need to do.”

Spiegel said the infusion of funds will help Erlanger’s critical needs but there remains much more that must be done in his second year as CEO. The hospital is laboring under an antique operations arrangement that will be remedied by a new 501c3-type board of governance when the best model is determined, and all areas of the hospital continue to be reviewed for the best solutions.

One can only imagine what might have been if the hospital’s past leadership had taken advantage of the available funds for uninsured health care but it is obvious the hospital’s board of trustees picked a winner in Spiegel and that the new CEO’s leadership team is doing what it takes as Chattanooga’s chief health care provider.

“When we were forced to freeze our paid time off, it was a bitter pill for all of us. We were all included but we wanted to do everything possible to avoid layoffs. It gives me a special thrill to lift the freeze this quickly but our employees are the real heroes who did what was necessary until our funding was approved. I am very thankful things have turned out,” he said.

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