Erlanger reacts to state denial

After a week of key “no” votes, Erlanger Health System leaders finally got a “yes” Thursday evening when the board of trustees approved a record-high $1.1 billion net revenue budget for the fiscal year that starts Sunday.

The historic meeting ended with a recap from CEO Kevin Spiegel of the week’s events, which included regulators denying Erlanger’s application to build a $9.2 million cancer center in Ringgold, Georgia, on Monday and an $11.3 million free-standing emergency department in Bradley County, Tennessee, on Wednesday.

“We will meet, we will strategize and figure out another way,” Spiegel said.

Although the Tennessee Health Services and Development Agency

didn’t see the need for a new emergency department along Interstate 75 off Exit 20, Spiegel called the number of Bradley and Polk County residents currently traveling to Erlanger’s main campus in Hamilton County for emergency medical services “unsustainable” and a “public health crisis.”

Tennova Healthcare already has a 7,000-square-foot, 24-hour emergency care unit and a 351bed hospital in Bradley County. But Spiegel told board members patients — particularly those lacking health insurance — often come to Chattanooga instead, because they’ve “lost confidence in the hospital” and Tennova strategically avoids charity care.

Tennova also was denied an application to build an emergency department up the road from Erlanger’s proposed project. Hospital representatives said it could have eased patient loads at the emergency unit, especially high numbers of behavioral health patients with nowhere else to go, but added they were mainly trying to stop Erlanger’s “brazen market grab.”

At Thursday’s meeting, Spiegel blamed the Tennessee Health Services and Development Agency’s decision, in part, on a general reluctance toward the free-standing emergency department concept, even though Erlanger operates one in Sequatchie County.

Whether Erlanger will appeal the decisions or reapply for the projects wasn’t discussed, but board member Jim Sattler encouraged management to “push forward” if the need is that great.

Implementing the new budget will be another challenge for the Erlanger team, but one CFO Britt Tabor said is attainable.

Aside from revenue growth, the budget projects $120 million in uncompensated care costs and $26.5 million for capital. A large chunk of capital expense — about $9.8 million — will go toward expanding the oncology program at Erlanger East.

High points of the meeting included positive government reviews for Erlanger’s health centers and University of Tennessee College of Medicine Chattanooga Dean Bruce Shack’s report, which welcomed three new department chairs and 187 new residents to the school.