Tennessee legislators Rep. Gerald McCormick and Sen. Todd Gardenhire announced Thursday afternoon that they are sponsoring legislation that aims to revise the governance structure of Erlanger Health System and the Chattanooga-Hamilton County Hospital Authority.
Board members, management, local officials, physicians and other stakeholders have been discussing this for a couple of years, according to a news release.
“Erlanger is one of our region’s most valuable and critical assets," McCormick said in a prepared statement. "The size, scope and mission of Erlanger and T.C. Thompson’s Children’s Hospital have grown in the last 37 years, and how the authority is governed at the board level must also evolve.
“With now over $500 million in assets and $500 million in revenues, this is the next step in an ongoing process toward providing corporate oversight consistent with similar enterprises," he also said.
Gardenhire said in a prepared statement that the changes are needed so that Erlanger can better compete in an "intense and ever-changing industry."
It is not a reflection of the current board but rather a reflection of the market and corporate environment in which a public entity must operate, he said.
Leaders are crafting the legislation and will formally introduce it when the General Assembly reconvenes on Jan. 28.
According to the news release, key provisions of the bill include:
— A new community board of trustees will be established, consisting of nine members reflective of the community. It will include seven voting members, plus one nonvoting representative of academia and one nonvoting physician member with current or past staff privileges at Erlanger.
—The board will be self-perpetuating, similar to most corporations and nonprofit organizations. Upon the vacancy of any seat for any reason, the remaining board members will fill the vacancy by majority vote.
—Except for the initial voting members of the board and chair appointments, which will be made jointly by the Hamilton County Legislative Delegation in consultation with the Hamilton County mayor, political entities will not be responsible for appointing trustees.
—The newly reconstituted board will then appoint the academic and physician members, with the physician member to be appointed after consultation with the Chattanooga and Hamilton County Medical Society.
—Trustees will serve a three-year term, and no member may serve a total of more than three terms. Initial members of the board shall serve staggered terms.
—Though the board may create other committees it deems necessary, audit and finance committees must be established.
—The legislation would remove provisions that are either unnecessary or addressed in other statutes under state law.
—The board is specifically directed to adopt policies and procedures to ensure the authority purchases goods and services at competitive prices and avoid conflicts of interests among the board, management, and current or potential vendors.