By: Robin Ford Wallace, Reporter
“We’re not any
worse off than we were,” was Dade County Executive’s Ted Rumley’s comment on
the collapse of negotiations between the management of Chattanooga’s Erlanger
Medical Center and the Hospital Authority Board of Fort Oglethorpe’s Hutcheson
the appointed public hospital and indigent care provider for Dade as well as
Walker and Catoosa counties, though Dade, with Lookout Mountain in between and
a straighter shot to Chattanooga hospitals on I-59, uses it less than the other
2011 was foundering on the brink of ruin, deep in debt and bleeding money
monthly, when it entered into a partnership agreement with the more prosperous
Erlanger. Erlanger was to lend Hutcheson $20 million and management guidance to
lead it back to the path of solvency. And Erlanger’s Roger Forgey, appointed to
head Hutcheson in January 2012, was generally acknowledged to have taken great
strides in that direction.
But in recent
months, Dade’s representatives on the three-county Hospital Authority Board in
their reports to the county commission began to speak in terms no longer of a
“partnership” with Erlanger but of a “lease” of Hutcheson by Erlanger, and
Dade’s district commissioners made it clear that such an arrangement, with
Erlanger’s lease payments sufficient to cover repayment of a bond note to
refinance Hutcheson’s $50-plus million indebtedness, was the only way Dade
would agree to back such a bond with the other two counties.
value of the Hutcheson campus and real estate, which is owned by the three
counties, was underway, and lease negotiations were said to be going well with
Erlanger, when hospital board members reported at the Dade County Commission’s
last meeting on Aug. 1.
though, the process seemed to decay rapidly, and on Aug. 20, Waterhouse Public
Relations, the PR firm that now speaks for Hutcheson, issued a press release
announcing, “The terms of the agreement are in negotiation, but it is the
intent of the Board that Erlanger will no longer manage Hutcheson.”
negotiations have been behind closed doors, and optimistic as well as less rosy
news kept nebulous – though plainer speaking came over the weekend with quotes
from Walker County Sole Commissioner Bebe Heiskell that the counties had been
frankly disappointed with how Erlanger had gone through $11 million of the 20
it fronted Hutcheson without making substantial changes.
Sentinel had asked the hospital board, Waterhouse and Dade Executive Rumley for
clarification about the partnership v. the lease arrangement, and Rumley in any
case answered: “A lease would give them full power and we would just be the
landlord,” he said. “They would have full control of the hospital. Right now we – the board – still have a lot
of control over it – plus a lot of liability.”
Erlanger out of the bargaining, the hospital board with its new request for
proposals will open up the field to other institutions as potential lessees.
“What it amounts to is we’re ready to do a deal with a hospital that can absorb
the bond,” said Rumley. “Erlanger would
not do it.”
Free to make
the board an offer, said Rumley, would be Memorial Hospital, Parkridge
Hospital, Emory Hospital–
the Sentinel. In Atlanta? Where did that name come from?
“Out of the sky,” assured Rumley. Also, he
asked, what was that big hospital in Nashville?
ventured the Sentinel.
Rumley. That was also a name out of the sky, he said, but those or other
hospitals might feasibly want to lease Hutcheson in order to branch into the
Northwest Georgia area, and if so, they would create a service for everyone.
In any case,
concluded the county boss, Dade County will not sign a bond backing the
hospital until it has some arrangement in place assuring the commission that
Dade taxpayers would not be left holding the bag in the event the financial
picture gets worse.
And as for
Roger Forgey, who has won much praise for turning Hutcheson around financially
– on Monday, the hospital announced a $779,906 operating profit for July, and
was able to boast it is $10,102,107 ahead of last year’s numbers – Rumley said
he understood the CEO would remain in place at least while the RFT rounds up
prospects. “He’s not going anywhere,” said Rumley.