Facing a $30 million-plus gap in funding, Grady Memorial Hospital will close two neighborhood clinics and increase prescription drug copays – threatening access to care for some of Atlanta’s poorest residents.
South DeKalb Health Center in Decatur and Otis W. Smith Health Center in southwest Atlanta will close within the next 60 to 90 days, and patients will be sent to nearby clinics, said Grady spokesman Matt Gove. Meanwhile, uninsured residents from DeKalb and Fulton counties will see the base copay for prescription drugs rise from $2 to $3, among other copay increases. The hospital is also in the process of cutting 100 jobs.
Together, the changes will save Grady an estimated $10 million to help make up the loss in dollars used to pay for poor and uninsured patients, said Grady board chairman Pete Correll. More cost-saving measures will be announced in coming months, Correll added. “Whether we’re going to be successful or not, I don’t know.”
Grady has been hit by a string of financial blows in recent months. Fulton and DeKalb counties have cut their allotments to Grady by around $3 million each, adding to a $25 million drop in federal dollars from the Indigent Care Trust Fund.
If the counties feel they can’t fund a service, then Grady will have to stop providing it, Correll said. “They need to decide how much service they can afford to buy.”
There still remains a looming threat that Grady could lose millions more dollars this year over its ongoing contract dispute with Fulton County. The county withheld $10 million from the hospital in 2009 and $9.9 million last year, saying Grady failed to prove that it spent Fulton's tax dollars only on Fulton's indigent and uninsured patients, as is required under a 2009 memorandum of understanding.
Both years, the commission relented and paid the money anyway, not wanting to see patient care suffer. But with the dispute still not resolved, the county could withhold some portion of a $13 million quarterly installment due in April. Fulton budgeted $52.2 million for Grady this year, compared to $55 million in 2010.
While bickering over Grady continued among commissioners Wednesday, Chairman John Eaves succeeded in forming an ad hoc committee, a move intended to keep the money flowing. Eaves wants a panel made up of Grady representatives, Fulton-DeKalb Hospital Authority representatives, county department heads and an objective technical adviser to iron out how eligible Fulton patients should be defined under the contract, then make a recommendation to the commission. His proposal passed by a 4-3 vote.
DeKalb County recently cut its 2011 budget by $33.6 million – making cuts to all departments including a $3.4 million decrease in funding to Grady.
Cutting resources has consequences, and the burden falls on those with the most limited means, said DeKalb Commissioner Jeff Rader. People will have further to travel, will have to wait longer and pay more money, he said. “I certainly realize that when you’re poor, a dollar means a lot more to you.”
Grady’s financial troubles come less than two years after a major turnaround following decades of struggle.
In 2007, a group of community and business leaders led efforts to transfer control of Grady to a new corporate board and replace its chief. The hospital renegotiated contracts with vendors, bumped up cash collections and bought new, more efficient equipment with more than $300 million in private donation commitments.
A new robotic pharmacy system is one improvement that has helped save $30 million-plus a year in operating costs, Correll said. That’s how Grady has weathered funding cuts until now, he said. “We finally just hit a wall.”
Since 2007, Grady has lost $49 million in local and federal funds, while the cost of indigent care has jumped $41 million to more than $220 million, according to hospital data. Last year through November, Grady had $590.7 million in expenses and $503.3 million in revenue.
Grady is committed to doing everything possible to maintain quality of care, even though the amount of services is shrinking, Correll said. Hospital officials are talking to lobbyists and legislators to try to lessen the cuts to federal funds, he said. “We are literally in begging mode.”
People already can’t afford copays and have to walk to clinics, and more cuts to service will be devastating, even life-threatenting for some, said Rev. Tim McDonald, a Grady Coalition member. People won't go to the doctor and will end up in the emergency room, where care is more costly, McDonald said. “This is a step back.”
Told of Grady's cuts Wednesday, the two Fulton commissioners who have been most critical of the hospital -- voting against additional funding and accusing its managers of failing to uphold their end of the contract -- said it doesn't change their position.
"I didn't hear you mention any cuts in the very high executive pay there," Emma Darnell said.
Both she and William "Bill" Edwards said that before sticking patients with extra costs, the hospital should reconsider its top salaries, especially for CEO Michael Young. Darnell said Young earns $1 million, which Gove said is untrue. He earns about $600,000 per year, and last year received a $300,000 bonus based on his performance.
"Grady won’t slide back into the dismal state it was in a few years ago, but more cuts will have to be made, Correll said. “Everything’s still on the table."
