Erlanger OK’s $9.5M sterilization contract

Erlanger Health System’s board voted Thursday to outsource surgical instrument sterilization to Steris Corporation, an international provider of infection prevention products and services. The vote was an amendment to a previous resolution that’s been in limbo since the board first approved the move in November 2017.

Erlanger COO Rob Brooks said the original estimate from Steris didn’t account for replacing some air handling units, which are necessary to keep a sterile environment. The change will cost Erlanger about $9.5 million per year for 15 years instead of the original $8.7 million estimate.

“You’re in there cleaning instruments that are going to go inside someone … the air needs to be very sterile,” Brooks told the Budget and Finance Committee during its meeting Monday.

He said the change is necessary because Erlanger has added more than 10 operating rooms and significantly increased surgical admissions since its Central Sterile Department was built in 1993.

Steris will construct a new, off-site facility on Broad Street, update Erlanger’s current on-site unit and manage the day-to-day sterilization of all of Erlanger’s instruments. Erlanger also will get a 3 percent rebate on any business they refer to Steris at the offsite location.

“The sterilizers, the washers, the sonics — all of the equipment that we use to sterilize our supplies is woefully outdated,” Brooks said. “This is using an outside company that will come in and replace all of that capital, hire all the people and do all the work.”

Henry Hoss, chair of the Budget and Finance Committee, said the committee discussed the contract at length on Monday and felt “satisfied.”

Following the sterilization vote, Hoss inquired about the status of another resolution from November 2017 concerning Erlanger’s affiliation agreement with the University of Tennessee. Erlanger and UT have been reviewing the agreement but have not publicly announced any developments in nearly a year.

Dr. Bruce Shack, dean of the UT College of Medicine Chattanooga, said the university and the hospital are “very close” to completing negotiations.

“The big sticking point has been the governance of the new Erlanger Medical Group, but I think we can resolve those issues,” Shack said. “But we’re just not quite there yet.”

Each physician in the Erlanger Medical Group is affiliated with the University of Tennessee College of Medicine Chattanooga, one of three campuses across the state linked to the University of Tennessee Health Science Center in Memphis.

Erlanger CEO Kevin Spiegel did not comment on the status of the UT affiliation agreement in his CEO’s report, but did recognize the individuals who were honored at last week’s Dinner of Distinction: Dr. Mack Worthington, Dr. Larry Schlabach, JoAnne Favors and the late Dr. Francis Fesmire.

Other news from the meeting included a name change from Erlanger Murphy Medical Center to Erlanger Western Carolina Hospital. CEO Mark Kimball said the name change better represents the hospital’s regional presence and announced a major push to recruit physicians to the area.