In December the Fort Oglethorpe hospital posted a profit of nearly $150,000. That doesn’t sound like much. But consider the picture a year ago, in December 2011, when Hutcheson operated nearly $1 million in the red for the month.
The hospital has borrowed $20 million from Erlanger Health System, which took over management of the Hutcheson in May 2011. That money was used to help pay down some of Hutcheson’s debt and for basic expenses, such as paying employees.
Now the hospital wants a $25 million bond anticipation note, with a low 1-percent interest rate, to quickly pay off a $12 million Medicare debt that carries an 11-percent interest rate. That plan simply makes good business sense.
The rest of the money will be used to pay of part of the hospital’s debt to medical suppliers and to upgrade equipment at the hospital.
As for exactly how the Medicare debt accrued, that ship has sail and is well out to sea. The hospital has turned its attention to the more pressing business at hand — paying off high-interest debt as quickly as possible.
We understand those who want to stop the borrowing, who want to stop investing into what some have termed a “sinkhole” and “money pit,” and to simply let the hospital go on the auction block. They argue that we, the counties of Walker, Catoosa, and Dade, who own the hospital’s property and who have leveraged that property so Hutcheson can borrow money, will be left holding the bag. They also point out that Hutcheson has hitched itself to Erlanger, a hospital with its own set of serious financial problems. And it’s likely, they further point out, that the hospital will have to borrow even more money to pull itself out of debt. These are indeed arguments with lots of merit.
But now isn’t the time to give up, not in light of the hospital’s new bill of profit-making health.
Hospital officials predicted they would begin operating in the black within less than two years after coming under Erlanger’s aegis. They have delivered on that promise. Now it’s time for the community to deliver its full support.