Hospital authority: Grady should justify clinic closures

By Misty Williams

The Atlanta Journal-Constitution

Grady Memorial Hospital officials need to justify plans to close two neighborhood clinics as part of an effort to bridge a $30 million-plus funding gap, a hospital authority board member said Monday.

Enlarge photo

Vino Wong, vwong@ajc.com Otis W. Smith Health Center is one of two neighborhood clinics Grady Memorial Hospital plans to close in the next two to three months as a cost-saving measure. Here, Dr. Melba Johnson carefully draws blood from Rafayla Valente's two-year-old son, Sunny Garcia, with help from nurse practitioner Camille Bentuck.

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The Fulton-DeKalb Hospital Authority must ensure the changes don't violate the corporation's lease agreement or negatively impact indigent patients, said authority board chair Thomas Dortch at an emergency meeting called to discuss the cuts. “Grady is too important to too many people.”

In 2008, a lease agreement was put into place after business and community leaders banded together to save Grady from financial ruin -- creating a corporate board to run the hospital. The authority maintains ownership of the hospital and leases it to the corporation.

“The lease does not require us to consult with the authority board before making decisions such as the ones we announced last week,” Grady spokesman Matt Gove said.

Among the changes, South DeKalb Health Center and Otis W. Smith Health Center will be closed and merged into two nearby facilities in the next 60 to 90 days. In addition, the base prescription drug copay will increase from $2 to $3, among other copay increases.

Combined with 100 job cuts, the changes will make up $10 million of the $30 million drop in funds to care for poor and uninsured patients -- leaving the need for more cost-saving measures that will be announced in the next month or two.

The hospital has been hit by a string of financial setbacks this year. DeKalb and Fulton counties have each cut their allotments to Grady by roughly $3 million, following a $25 million reduction in federal dollars from the Indigent Care Trust Fund. Grady has lost nearly $50 million in local and federal funds since 2007, while the cost of indigent care has jumped $41 million, according to hospital data.

It’s critical that Grady stays healthy, and the board has done a phenomenal job, Dortch said. “The doors probably would have been closed by now,” if not for the corporation. Still, the authority must make sure the board upholds the lease, he said.

The lease allows the corporation to make service changes without consulting the authority if it doesn’t negatively impact public health needs, is appropriate because services are being underutilized or are available through other local providers, or if needed to maintain the hospital’s economic viability. It also bars the board from ceasing indigent or emergency care services without the authority’s consent and requires it to consult the authority if ending a major medical service line.

Since ceasing indigent care or cessation of a major medical service line isn’t clearly defined by the lease, the authority should require the corporation to explain and justify its reasons for the clinic mergers without the authority's consent or consultation, attorney Lewis Horne Jr. stated in a letter addressing the issue.

Dortch said the boards need to work together, adding that the authority and county commissioners should have been notified before the cuts were made public. "Team means everybody is part of the process."

The hospital board welcomes the authority’s feedback, Gove said. “We believe also that we are all on the same team.”