Jim Coleman, Erlanger’s president and CEO, said the agreement would allow much-needed upgrades to facilities and equipment, expand outpatient care and strengthen the health system’s ability to keep up as the industry increasingly shifts away from traditional hospital campuses.<\/p>\n
“We see what we need every day, and we just can’t write a check for it and buy it,” Coleman said in an interview.<\/p>\n
Erlanger is the last remaining Chattanooga-based independent hospital system. Its primary competitors are part of much larger organizations \u2013 Chicago-based CommonSpirit Health, a national nonprofit health system, and Nashville-based HCA Healthcare, one of the nation’s largest for-profit hospital companies \u2013 giving them access to substantially greater financial resources for expansion and capital projects.<\/p>\n
(READ MORE: Erlanger breaks ground on multiphase East Hospital expansion)<\/a><\/p>\n Dr. Christopher Poole, an Erlanger board member and medical staff leader who helped evaluate potential partners, said the health system is grappling not only with aging infrastructure but also mounting financial pressure from federal Medicaid cuts and state policy changes<\/a> outside Erlanger’s control. As a result, the board concluded it would be difficult to carry out its long-term modernization plans alone, he said.<\/p>\n Those plans largely center on expanding Erlanger’s outpatient footprint through standalone surgery and imaging centers.<\/p>\n Poole said the proposed partnership would give Chattanooga-area patients access to the kinds of facilities, technology and specialty care commonly found in larger metropolitan areas.<\/p>\n “The physicians here will be excited to have resources, to have the equipment and facilities that they need to provide the care for patients that we would want for our family members,” he said. “And if you can do that, you can continue to recruit good, young, talented physicians to the area.”<\/p>\n The proposal comes three years after Erlanger moved from a public hospital authority to a private nonprofit organization<\/a>, a transition leaders said gave the health system greater financial and strategic flexibility while preserving some public oversight.<\/p>\n As part of that transition, Erlanger entered a 15-year mission agreement<\/a> requiring it to preserve its role as a safety-net provider, teaching hospital and regional referral center while maintaining certain services, including its children’s hospital and Level I trauma center.<\/p>\n If approved, Erlanger will keep a local board for up to nine years and get two seats on Prisma’s 11-member corporate board, Coleman said.<\/p>\n (READ MORE: Chattanooga entrepreneur Barry Large named chair of Erlanger Health board)<\/a><\/p>\n “That was something they gave to give us a little more comfort, that there’s going to be Chattanooga voice and direction from Chattanooga,” Coleman said.<\/p>\n Prisma would establish its East Tennessee regional headquarters in Chattanooga, where Coleman would serve as regional CEO. The health system already operates Blount Memorial Hospital in Maryville.<\/p>\n Coleman said Erlanger considered multiple potential partners before selecting Prisma because leaders believed it best matched the health system’s mission and long-term vision.<\/p>\n Based in Greenville, Prisma Health is South Carolina’s largest nonprofit health system, formed in 2017 through the merger of Greenville Health System and Palmetto Health.<\/p>\n The system encompasses 20 hospitals, including specialty hospitals, more than 3,000 licensed beds and 490 physician practice sites, serving more than 1.6 million patients annually across South Carolina and Tennessee, according to the health system’s 2025 fiscal year statistics.<\/p>\n Like Erlanger, Prisma operates the only Level I adult trauma center in its region and has children’s hospitals in both Greenville and Columbia with pediatric intensive care, neonatal intensive care and dozens of pediatric subspecialties.<\/p>\n<\/p>\n (READ MORE: Erlanger Children’s Hospital opens Chattanooga-inspired Land of Enchantment play space)<\/a><\/p>\n Prisma has felt like a partner from the beginning, Coleman said.<\/p>\n “I’ve never heard the words … ‘We’re going to buy you out. We’re taking you over.’ That’s not the attitude,” he said, but he added, “That’s what’s happening. We’re becoming part of the system for a huge investment.<\/p>\n “But … they’re going to profit from that investment, and so is Chattanooga,” he said.<\/p>\n Coleman said years of work by Erlanger employees transformed the health system into an attractive partner for a nonprofit organization with similar values, adding that the proposed deal would strengthen \u2013 not change \u2013 Erlanger’s longstanding mission to care for all patients.<\/p>\n All employees and medical staff in good standing will remain part of Erlanger for now and eventually move to Prisma’s payroll and benefits system. At this time, nothing is changing for patients, and all appointments and services will continue as usual, he said.<\/p>\n Details of co-branding are still in the works, but Erlanger will always be part of the name, he said.<\/p>\n After four months of due diligence and signing an agreement, Coleman estimated it would take about a year to convert all of Erlanger’s systems to theirs.<\/p>\n “It’s going to create lots of opportunities for the employees,” Coleman said, referring to the outpatient facilities and expansion projects Erlanger hopes to build through the partnership. “All these new sites, we’re going to be probably adding to our workforce instead of taking away from our workforce.”<\/p>\n Erlanger has launched a website, erlangerfuture.org, for those seeking information and updates.<\/p>\n Contact healthcare reporter Elizabeth Fite at efite@timesfreepress.com<\/a> or 423-757-6673<\/a>.<\/p>\n![\"Staff](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/07\/104094240_CHILDREN-S-HOSPITAL002_t800.jpg\")
Staff file photo by Matt Hamilton \/ Erlanger President and CEO Jim Coleman speaks during a ribbon-cutting ceremony for the Children’s Hospital Land of Enchantment play area at Erlanger Baroness Hospital on July 21, 2026. Erlanger leadership announced Wednesday that Erlanger has signed a nonbinding letter of intent to join South Carolina-based Prisma Health.<\/p>\n
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