Erlanger’s November finance report shows the health system is $6.3 million over budget so far this year. According to the report, Erlanger had a $3 million loss in November alone.
Erlanger’s admissions were 3.7 percent over budget in November 2011 and 9.1 percent over budget compared to fiscal 2010, the report states. Bad debt and charity care tallied 12.69 percent for November compared to a budgeted 10.11 percent, according to the report.
Erlanger Health System has advanced $5.2 million to Hutcheson under a line of credit agreement, the report states. Erlanger had extended a $20 million credit line to Hutcheson as part of a management agreement signed on May 26, 2011.
Hutcheson had agreed to pay back the loan with interest once the hospital began turning a profit. The loan is secured by the collateral of the hospital property, which is owned by the Hospital Authority Board of Walker, Dade, and Catoosa Counties. The Fort Oglethorpe hospital was renamed Erlanger at Hutcheson in early November.
The Catoosa County News requested and promptly received a copy of Erlanger’s November finance report by e-mail on Wednesday, Dec. 21. The Catoosa News also submitted an open records request for a copy of the health system’s 2011-12 labor management plan on Dec. 21.
The Chattanooga Times Free Press has reported the plan details Erlanger’s intent to implement layoffs, furloughs and voluntary buyouts. Erlanger Health System public relations specialist Jennifer Homa told The Catoosa News her office was unable to e-mail the labor management plan and requested a regular mailing address. She said the Times Free Press did not receive a copy of the plan from Erlanger.
Homa also pointed out Erlanger is not the only area health system having financial difficulties. In an online story posted Nov. 30, The Chattanoogan reported Memorial Health System planned to lay off employees in some “non-clinical areas” and curtail operating hours during the Christmas and New Year holidays in “non-direct patient areas.”
Hutcheson officials could not be reached for comment about their management company’s financial dilemma.
Hutcheson laid off 75 employees in April 2011, following the resignation of former hospital administrator Charles Stewart in February 2011. On Dec. 13, 2011, Hutcheson announced the hospital board voted to stop paying Stewart’s average monthly severance payment of $27,140. The release stated hospital officials had discovered alleged fiscal mismanagement under Stewart’s leadership. Hutcheson’s previous board of directors granted Stewart a 15-month severance package, with a total potential payout of $407,000, according to the official release.
Questions about the board’s decision were referred to the Barnes Law Group of Marietta, founded by attorney and former Georgia Gov. Roy Barnes. Barnes has been in court the past two weeks and could not be reached for comment.