Erlanger Medical Center plans to work with a developer to construct a new medical building for its Erlanger South Family Practice at Ringgold.
The hospital will pay developer Daniel Fox $116,000 per year to lease space in the new building.
Erlanger official Roger Forgey said that space at $14.50 per square foot is cheaper than other leased space the hospital has found.
He said the hospital will get to work closely on the design of the facility.
Dr. Christopher Haddock said he and Dr. Chip Harris have been working for six years "in a double-wide in a field."
He said the practice will be able to add staff and see more patients at the office building.
The facility will have 8,000 square feet and room for two more doctors.
The hospital plans a 10-year lease with the developer.
Erlanger had tried to work out an arrangement for space with the YMCA, but that fell through.
Also, Erlanger is adding two adult trauma orthopaedic physicians.
Erlanger plans to renovate space at Suite A-450 for the new practice at a cost of $338,176.
Finance Director Britt Tabor said Erlanger lost $169,793 in September.
For the year-to-date, the hospital is in the red by $1.6 million.
Admissions for the month were under budget by 6.4 percent and down 5.4 percent from last year.