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The Keckley Report

Erlanger: Fond Memories, Harsh Realities

By July 22, 2019March 1st, 2023One Comment

I was born at the Baroness Erlanger Hospital in Chattanooga, Tennessee, a community where high school sports gets front-page coverage and ‘healthcare’ is fundamentally about doctors, hospitals and Blue Cross of Tennessee.

In my formative years, Erlanger was the only game in town. Founded in 1889, it became a public benefit corporation operating under the oversight of the 11-person Chattanooga-Hamilton County Hospital Authority in 1976. It serves residents of East Tennessee, North Georgia, North Alabama, and western North Carolina and is the nation’s 10th largest public healthcare system.

In the sixth grade, a classmate, Jerry Myrick, asked me to play golf with him at Brainerd Municipal Golf Course. It was the first time I’d ever stepped foot on a golf course not named Goofy Golf. On the par 3 165-yard fifth hole that runs along Moore Road, I made a birdie 2. Wow. I was hooked.

That evening, I told my dad that I had made my career decision: I wanted to be a professional golfer. Without missing a breath, he advised I’d have to become a physician, because ‘they were the only ones who can afford to play golf’. It made sense: doctors’ offices in Chattanooga were closed on Wednesday’s so they could play at the area’s private clubs.

His directive stuck. I studied the clinicians I knew—Drs. Cunningham, Fancher, McKelvey, Davis and others. They were addressed as “Doctor” everywhere they went. They were respected. They lived in the biggest homes and drove the nicest cars. And their kids went to private schools and spent summers in camps. And most played golf.

At church, Dr. John Cunningham took interest in me knowing my aspiration. I began working for him as a surgical assistant at Erlanger at 14. That led to a seven-year stent in Central Sterile Supply putting up Stryker frames, cleaning proctoscopes and monitoring prep trays in the Operating Room. Golf was still on my mind; medicine was a means to that end.

In the hospital, I saw firsthand how doctors were treated. What doctors wanted, they got. The culture revolved around meeting their needs which also included special parking, free meals and a private dining room reserved just for them. Everyone and everything were subservient to the needs and wants of the doctors. They ran the place: administrators were there to do their bidding.

Today, the Erlanger Health System (EHS) is a $973 million enterprise consisting of 8 hospitals, the 405 member Erlanger Medical Group, numerous specialty programs and medical education for 186 medical residents and fellows through its University of Tennessee College of Medicine affiliation. In its 2018 Annual Report, its aspiration is explicit: WE EXPECT THE BEST FROM EVERYONE. AND WE REACH FOR WHAT’S NEXT. IT’S HOW WE PERFORM MORE MEDICAL FIRSTS THAN ANY HEALTH SYSTEM IN THE REGION. IT’S HOW WE ATTRACT SOME OF THE WORLD’S BEST HEALTHCARE TALENT. AND, IT’S HOW WE ARE BECOMING ONE OF THE NATION’S NEXT GREAT HEALTH LEADERS.

Its results have been impressive: in the last 5 years, its market share has grown to 41% from 36% along with annual revenues. It now operates the nation’s 7th busiest emergency department and is fully accredited by The Joint Commission. But, of late, it’s better known for internal strife between the physicians and the system’s leadership.

In May, the 11-person Medical Executive Committee (MEC) passed a unanimous vote of “no confidence” in the system’s leadership citing their concerns about changes in emergency and surgical services they deem injurious to quality and patient safety. That was followed by a letter from 12 physicians in the Erlanger Medical Group expressing “wholehearted support” for system CEO Kevin Spiegel and his team. Last week, the system’s VP of Quality and Patient Safety announced her resignation stating her inability “to perform her job in good conscience.” And it’s all playing out in local media: Erlanger’s family dispute on full display!


This storyline is all-too familiar: tension between hospital administration and physicians. In some hospitals, it’s managed under the radar; in others, especially public hospitals like Erlanger, it explodes. I’ve seen both.

Here’s the reality:

  • Physicians are not happy. They feel administrators, bureaucrats, politicians and insurers are adversaries intent on limiting their clinical autonomy and income. They believe the profession of medicine has been compromised by outsiders more concerned about costs than care, and they think hospitals are part of that problem.

  • Physicians, whether employed, independent or not formally involved at all are prone to see hospital administration at best as unnecessary cost and at worst incompetent. Mutual respect between physicians and the C suite in most organizations is under stress and, in some, woefully weak.

  • Efforts to trim costs by hospital administrators will always be seen as adverse to patient safety and quality when those cuts change the way physicians think patient care should be delivered. Decisions about staffing, standing orders, scheduling et al that impact the way physicians prefer to practice will always encounter resistance, whether justified or not.

  • In most hospitals, disgruntled physicians will engage hospital Board members directly. And in some cases, they’ll engage media coverage.

The Erlanger scenario is familiar: the MEC vote of no-confidence went directly to Board Chair Mike Griffin. Physician concerns about cost reductions, clinical process improvements, information technology adoption and regulatory compliance are palpable. In fact, these issues had been simmering in Chattanooga for a more than a decade.

The reality is that quality of care in the Erlanger system, as measured by major independent rating organizations, is average in most categories.

  • US News and World Report Best Hospitals 2018-2019: Erlanger is not ranked for any of its 16 adult medical specialties, 9 adult medical procedures or 10 pediatric specialties, and it received 2 out of 5 stars for patient experience.

  • Leapfrog 2018: On its 7 major clinical measurement categories, results are mixed with inpatient care management and medication safety rated well but infection-controls unfavorable

  • HealthGrades: 71% of patient would recommend Erlanger vs. 70% national but only 66% rank it 9 or 10, 3% lower than their national average.

  • IBM Watson Health 100 Top Hospitals (formerly Truven Health Analytics 100 Top Hospitals): EHS is not recognized.

But these data must be taken in context: Erlanger is a safety-net health system. It serves a disproportionate share of low-income and underserved populations. That means operating margins are lower (4.0% vs. 7.6% for all hospitals but -1.4% without Medicaid DSH payments), quality scores are lower, and the complexity of care provided is much greater. And that’s especially true in a market like Chattanooga where a quarter of the population lacks routine care and overall health status is poor.

The lessons to be learned in this EHS scenario are familiar—the importance of culture and communication, physician and administrator leadership, the appropriate role for boards and more. For now, suffice it to say EHS is the public face of growing tension between hospital leaders and physicians that needs attention. It’s exacerbated in markets where physicians join larger groups that partner with private equity to take on the local hospital.

I have fond memories of Erlanger and I don’t regret my career diversion to healthcare from golf since my ability on the course is clearly not very good. But EHS today is quite different than what I knew.


PS: Next week’s Keckley Report: “The Themes you’ll NOT Hear about in the July 30-31 Democratic Presidential Debate”. CNN will telecast the debate and healthcare will be a key topic. Both parties, Republicans and Democrats, have dodged key issues in staking their claims to shape the future of the health system. In the Keckley Report, we’ll unpack these issues to which campaigns and candidates must be attentive.

PS: Confused about whether Accountable Care Organizations aka the Medicare Shared Savings have been successful in lowering Medicare spending? Last week, two new studies added to the confusion:

  • ACOs’ self-reported management and coordination activities were not associated with improved outcomes or lower spending for elderly patients with multiple diagnoses, according to a Dartmouth Institute for Health Policy & Clinical Practice study published in JAMA Network Open last week. Researchers examined records related to 1.4 million Medicare beneficiaries who had frailty or multiple chronic conditions and were assigned to an ACO.

  • A second study last week found the use of specialists helped some accountable care organizations reduce spending, as well as emergency department visits, hospital discharges, skilled nursing facility discharges, and magnetic resonance imaging orders. Researchers found that ACOs that used specialists to conduct 40%-45% of office visits spent significantly less than ACOs with lower specialist involvement. That study, also published in JAMA Network Open, found specialists “complement the intrinsic primary care approach in ACOs.”

The debate about the effectiveness of ACOs to save money for Medicare is still very much up in the air.


Erlanger Health System /

America’s Essential Hospitals

Elizabeth Fite “Top physicians say they’ve lost confidence in Erlanger leadership: Physician committee votes ‘no confidence’ in executive leadership” Times Free Press June 23rd, 2019

“VP of Patient Safety & Quality at Erlanger Health System resigns” News Channel 9 ABC July 16, 2019

Elizabeth Fite “Erlanger board approves budget, receives letter from hospital-employed doctors in support of CEO Spiegel” Times Free Press June 27, 2019

Werner, Rachel M. (2008-05-14). “Comparison of Change in Quality of Care Between Safety-Net and Non–Safety-Net Hospitals”. JAMA. 299 (18): 2180–7. doi:10.1001/jama.299.18.2180. ISSN 0098-7484. PMID 18477785.

W., Burt, Catharine; E., Arispe, Irma (October 18, 2017). “Characteristics of emergency departments serving high volumes of safety-net patients; United States, 2000”. Center for Disease Control and Prevention.

Knowlton, LM; Morris, AM; Tennakoon, L; Spain, DA; Staudenmayer, KL (August 2018). “Financial Stability of Level I Trauma Centers Within Safety-Net Hospitals”. Journal of the American College of Surgeons. 227 (2): 172–180. doi:10.1016/j.jamcollsurg.2018.03.043. PMID 29680414.

Dobson, Allen. “The Financial Impact of the American Health Care Act’s Medicaid Provisions on Safety-Net Hospitals”. Common Wealth Fund. Retrieved October 25, 2018.

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