Chattanooga, Tenn.-based Erlanger Health System has been given the go-ahead by its board of trustees to give the system's CEO Kevin Spiegel a 10 percent pay increase, an action that isn't sitting will with some state lawmakers who believe the health system might have skirted a private meetings law to dole out the money, according to a WTCV report.
Along with giving out $1.7 million in bonuses to approximately 99 of its top managers, Erlanger Health is also raising the pay for its employees and the system's leader. Erlanger Health's board of trustees approved a 10 percent pay raise next year for Mr. Spiegel and a 2 percent non-budgeted pay raise for hospital employees.
The bonuses and the pay raises come after the system froze vacation time for employees earlier this year. However, Erlanger has made a turn for the better financially, thanks in large part to Erlanger Medical Center receiving $19 million in federal funds from the public hospital supplemental payment pool, which were funds unavailable to the hospital until this year, according to a Chattanooga Times Free Press report.
Tennessee Sen. Bo Watson (R-Hixson) has voiced his displeasure with Mr. Spiegel's pay raise. He told WTCV "A 10 percent pay increase is a recurring expense to a hospital that has struggled to meet its financial targets for a number of years."
In a statement provided to WTCV, Erlanger board of trustees chairman Donnie Hutcherson defended Mr. Spiegel's pay increase as well as the raises given to other employees. "Under the leadership of Kevin Spiegel, our team of physicians, nurses and all associates rebounded from years of losses to profitability in just 16 months," Mr. Hutcherson said in the statement. "Their incentive compensation targets were set long ago, and they performed superbly, and deserve the compensation they received."
However, if there were revenue incentives involved, Sen. Watson told WTCV that begs the question of "does a $19 million gift from the federal government constitute a change in operations that enhanced the hospital's revenue?"
Regarding Erlanger's decision to provide the bonuses and pay increases, Tennessee lawmakers are reconsidering a law that allows public institutions to have private meetings to discuss strategy. State Sen. Todd Gardenshire (R-Chattanooga) told WTCV he believes Erlanger trustees and management violated the law, as private discussions of strategy does not include how employees are paid with bonuses.
Sen. Gardenshire said he will co-sponsor a bill with Sen. Watson to amend the private meetings law and will bring up legislation aimed at Erlanger and its trustees, according to the report.
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