The decision comes in the wake of several consecutive years of financial hardship by the Fort Oglethorpe hospital, which reported a loss of $7.3 million for budget year 2009.
HMC board chairman Martha Attaway made the announcement in the front lobby of the hospital before an audience of HMC employees and both Erlanger and HMC administrators.
Attaway said that Hutcheson, like many community-based hospitals, has experienced extreme challenges due to the economy and high incidences of indigent health care.
“We had to start looking at ways to prepare ourselves for the future to ensure that we would always have health care here,” she said.
The months-long process included proposals from both Erlanger and Memorial Hospital which were presented to an array of members of Hutcheson’s five boards, administrators, medical staff, and representatives from Catoosa, Dade, and Walker counties.
Hutcheson originally opened as Tri-County Hospital in 1953 and now has nearly 1,000 employees, including more than 200 physicians and more than 400 registered nurses and clinical staff. Erlanger was founded in 1889 and has five Chattanooga-based medical campuses with more than 4,200 employees.
Attaway said the criteria for the selection included stability, financial strength, and a willingness to recruit and maintain physicians in northwest Georgia.
Hutcheson president and CEO Charles Stewart said that the next step is a period of “due diligence,” or the analysis of a company prior to a final transaction.
“This process will take approximately 60 days,” Stewart said.
Erlanger president and CEO Jim Brexler said that the partnership is really another step in an established relationship with Hutcheson and northwest Georgia.
Brexler said families in the area are familiar with Erlanger’s specialty care such as the Life Force helicopter and high-risk pregnancies.
“We look forward to understanding each other, which I think is the basis of a true partnership,” Brexler said “We are going to that 60 days of due diligence and really do due diligence.”
And “due diligence” was the default answer to many questions from news media that was present, whether it was regarding assumption of any of Hutcheson’s bond debt, possible staffing changes, or even signage changes.
Attaway did say that Hutcheson’s financial decisions will likely still be made by the HMC board.
Stewart said that he did not foresee any immediate changes in the structure of boards like the Hospital Authority, which oversees the lease of facilities from Catoosa, Dade, and Walker counties.
“Over time we’ll have to evaluate if that’s the most effective way to have our governance structured,” Stewart said.
The officials all expressed appreciation for Memorial’s participation in the process, and agreed that it was a difficult decision.
“Erlanger has a much bigger system for serving the entire region,” Stewart said. “When it came down to the final decision, our vision was most aligned with them.”
Brexler said the proposed partnership represents a natural progression in what many hospitals are facing in trying economic times.
“Health care doesn’t operate in little buckets. It operates in systems of care that work between community hospitals and regional centers,” he said, “and when any part of that network is stressed or isn’t performing at a level that it should for its local community, the entire system is stressed.”
Both sides of the line
The announcement comes as a relief to Hutcheson employees, who couldn’t help but wonder about what was to come for their hospital.
Melissa Smeltzer, HMC director of education, says she feels that Erlanger is supportive of Hutcheson’s mission and she is excited about what the partnership can mean for patients.
Smeltzer, who lives in Hamilton County, Tenn., said of her fellow employees and the next 60 days, “We’re not really sure what our role will be, but we are willing to work in any capacity we can to help make sure that we can move forward with this.”
Roger Forgey lives in Fort Oglethorpe and commutes to Chattanooga for his job as chief administrator of Erlanger’s downtown Baroness campus.
“I’m a former Hutcheson employee, so I am really pleased with this,” he said.
Forgey also heads up the adult acute care services department, which treats “the sickest of the sick.”
In looking forward to a partnership Forgey said he will be involved in making sure transitions for those types of patients is seamless.
“And we’ll certainly be looking to recruit for Hutcheson and bolster up the doctor presence here,” he said.