Roy Exum: Stanley ‘A Star’ At Erlanger

  • Friday, January 23, 2015
  • Roy Exum
Roy Exum
Roy Exum

When State Senator Todd Gardenhire went on an uncharacteristic rant over bonuses given to Erlanger Hospital executives, his outlandish assertions were countered in media accounts by hospital board member Jennifer Stanley who said – minus the hysteria -- "We owe management the incentives we promised over a year ago. Not to pay would be an egregious moral and ethical violation, in addition to destroying trust between the board and management.”

Almost predictably, Jennifer got her knuckles rapped on Wednesday when the Hamilton County Commission sullied what should have been unanimous approval to reappoint her to the Erlanger board.

It seems Senator Gardenhire suggested Stanley’s reappointment be postponed until a Gardenhire-led charge to the state attorney general could determine if Erlanger’s board violated state Sunshine Laws, this despite two reviews that determined the group did not.

Let the record show that of all the citizens served by the hospital, Jennifer Stanley is perhaps the most-prized asset on the current board and, in the opinion of Chairman Donnie Hutcherson, is very much “a rock star.” Or, in the words of fellow trustee Jack Studer, “I literally asked Donnie to assign me to as many committees with Jennifer as possible. She’s absolutely brilliant.”

So why did Commissioner Joe Graham vote against her reappointment and Commissioner Tim Boyd abstain? Neither know anything about her … her meteoric rise in business after she was a Rhodes Scholar, that she has spoken at UT’s Commencement, and is one of the most heralded visiting professors in Knoxville.

She’s already been President of the UT Alumni Association but unselfishly donates many hours each week helping to guide Erlanger’s dramatic turn-around while not being paid as much as a flat, thin dime for her unquestionable expertise. As County Mayor Jim Coppinger sighed following the 7-2 vote, “Frankly, I didn’t want her to have the opportunity to back out!”

I was in a conversation with Donnie, Jack (who is the board’s secretary) and the hospital’s Chief of Staff, Gregg Gentry, yesterday and all three were emphatic when they insisted no Sunshine Laws have been broken that they can discover. “Absolutely not,” said Hutcherson. “We have asked inside and outside counsel to make sure and they can find nothing.”

“I think there may be a misconception that we decide things in the dinner hour prior to the board meeting and that is clearly not the case,” the chairman said. “The dinner is a casual, informational session where we talk to the hospital’s staff about many topics,” he further explained. “I know that since I have been on the board there has never been any kind of vote, decisions made, or any ‘official business’ outside our public meetings.”

Studer, the business whiz at the Lamp Post Group, agreed fully. “The board welcomes feedback, particularly if it is critical but constructive, but it becomes frustrating when you are trying to do all you can possibly do to make this hospital into a world-class medical center.

“The uproar over Kevin’s (Spiegel, CEO) bonus is actually quite surprising. The (Chattanooga Times Free Press) printed his contract when he was hired and we simply followed it to-the-letter,” Studer said. “The other bonuses that Kevin presented to the compensation committee were well in line with a ‘peer group’ of hospitals that we compare with.”

Asked how many other hospitals had similar bonus plans, Studer laughed, “It would be much easier to name the hospitals that do not. As a matter of fact, goals and incentives are pretty much the standard in American business right now. It assures accountability and performance. As the fiscal year wound down, we anticipated bonuses for our employees because in recent years when Erlanger was losing money, it was pretty dismal.”

Hutcherson said that when he assumed the chairmanship, “I told everybody there had to be changes and that they would be painful. I told Kevin that he couldn’t possibly move fast enough to suit me and while, yes, it was painful, I am thrilled we got it done as fast as we did. Kevin was the impetus and our executive team deserves every penny.”

Donnie told me that less than two years ago Erlanger was actually on the verge of bankruptcy. “We were down to 65 days of cash on hand and our bonds were being threatened. Now we have 94 days of cash on hand and, when we made $12.1 million last quarter, we were able to pay off $2.4 million in bonds,” he said. “I would have never dreamed we would be able to do that.

“Now, we need to be real honest – we will be unable to sustain $12 million each quarter – not now -- but making a profit is now very sustainable,” Hutcherson vowed. “I look at the hospital’s financials every morning. Every day. I can see where we are going to pull out of the doldrums a lot faster than anybody thought we would. And I found out Kevin Spiegel is pretty fast!”

Hutcherson, a brilliant CPA in his “other life,” was asked how much profit would Erlanger need churn each fiscal year to be self-sustaining and meet its every-day demands. “Britt Tabor (the hospital CFO) and I go back and forth about that constantly,” he laughed, “but I’d say about $25 million. Britt starts every fiscal year with about $90 million in the red (indigent care) so we have work at it.”

Gregg Gentry said the proposed “Insure Tennessee,” now being boosted by the Governor, would certainly help Erlanger. “If 200,000 more people are insured, it stands to reason those served by Erlanger would help with our costs.”

Donnie was thinking more long range. “My dream is that when I finally step off the board, every salary in this hospital will exceed the market share, that all of Third Street will be a busy medical center, and that Erlanger will be the best hospital for a city our size in the country. We already have a great city. Our board wants a hospital to match it. And you want to know the key to the whole thing,” Hutcherson sat forward in his chair. “Not one person on our entire board has an agenda.”

But what no one at the table could understand is the sudden animosity from Chattanooga’s legislative delegation. “I grew up in the Boy Scouts where we all held hands and sang Kumbaya. For Erlanger to really thrive it is going to take all of us working together,” said Hutcherson. “We need the legislature’s help.”

Gregg Gentry made a good point. “Erlanger has 5,000 employees and it is said the hospital has a $3 billion (with a “b) impact on our region’s economy. Why would the most well-meaning politician not want to include the hospital in any equation that would best serve the people?”

That is a curious question. So I answered with another question. Has anyone from the local delegation – someone like Gerald McCormick, Patsy Hazlewood or JoAnne Favors -- called you to find out what is going on?

Chairman Donnie Hutcherson said, “No.”

Treasurer Jack Studer, who also heads the board’s compensation committee, said “No.”

Gregg Gentry, who is also the hospital’s Chief Administrative Officer, said, “No.”

So there begs a third question … how about them apples?

royexum@aol.com

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