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Hospital holds former partner responsible for damages that far exceed Erlanger debt repayment demands

 

Hutcheson Medical Center and its boards of directors announced the hospital will vigorously defend a lawsuit filed last week by Erlanger Health System and will remain focused on rebuilding a thriving north Georgia community medical center. Hutcheson officials said the damages it has sustained due to Erlanger’s breach of a management agreement far exceed the amount of any line of credit or other debt owed by Hutcheson to Erlanger.

Hospital and county officials noted that the successes realized by Hutcheson while rebuilding the hospital in recent years are attributable to the work of the hospital staff rather than Erlanger’s management. The hospital’s self-generated successes are among the reasons officials said they announced in November that Hutcheson would remain independently operated following the conclusion of its contract with Erlanger earlier in the year. The decision came after the medical center tried unsuccessfully to find a new management partner committed to ensuring Hutcheson remains a comprehensive hospital with the services necessary to support the communities of Walker, Catoosa and Dade counties, including general surgery, pulmonology, gastroenterology and orthopedics.

Hutcheson officials said the North Georgia community is an attractive market for regional hospitals, and while Erlanger expressed interest in investing in the community, few were made. Instead, they say, Erlanger sought to transfer patients out of North Georgia to its main hospital in Chattanooga. Erlanger failed to address the needs of the citizens of the tri-county or Hutcheson. Officials noted that Hutcheson’s debt rose under Erlanger’s management and in the first year of the hospital’s contract alone, the hospital’s admissions dropped by the same margin Erlanger’s Walker and Catoosa County admissions rose.

In just a few months of independent operation, Hutcheson launched initiatives to add state-of-the art technology, including a new CT scanner and two outpatient GI suites at Hutcheson on the Parkway, grow the number of outpatient clinics and expand operating hours for better community convenience. Meanwhile, hospital leaders are working to find solutions to the debt challenges, which grew under Erlanger’s management, so that Hutcheson can remain fiscally strong and operate independently.

 “In spite of the challenges created by past administrations and Erlanger’s management, we remain confident that we have the partners and resources to turn the corner and make this hospital the thriving community healthcare institution it used to be,” said Corky Jewell, Chairman of the Hutcheson Medical Center board of directors.

According to Walker County attorney Don Oliver, Walker County and Region’s Bank are providing support of the hospital’s ongoing financial needs. “We are surprised and disappointed that Erlanger’s leaders filed this lawsuit in an attempt to distract attention away from their own financial problems. We were working with Erlanger officials last week to discuss a mutual settlement of claims – at a meeting Erlanger requested  – while they were covertly drafting a lawsuit. ”

“Catoosa County has been and remains supportive of Hutcheson and remains unified with Hutcheson and Walker County in the defense of any litigation filed by Erlanger and the pursuit of any claims or counterclaims on behalf of Hutcheson against Erlanger for its breaches of the Management Agreement,” said attorney Chad Young, who represents Catoosa County.

 


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