State officials seem to understand they hold the key to whether Grady Memorial Hospital will be able to continue its much-heralded trauma treatment center —- everyone acknowledges it would be a disaster if it closed —- but Grady does so much more that also deserves state funding.

House Speaker Glenn Richardson has appointed a legislative study committee to report by the end of the year about what the state could do to help stabilize Grady. Richardson, who once was treated at Grady for head injuries he sustained in a car crash, has correctly asked the committee to focus on trauma care, where Grady has to absorb more than $40 million annually in unpaid bills, many of them for services provided to patients from outside Fulton and DeKalb counties.

Right now the state provides no direct financial support for that lifesaving service, not to Grady or any of the other 13 hospitals around the state that staff round-the-clock trauma units.

However, the committee also needs to consider other specialty services at Grady that routinely draw patients from around the state. Moreover, the funding formula for how the state's Medicaid program reimburses Grady, which carries the largest load of poor patients than any other Georgia hospital, is badly in need of recalculation.

Here are topics the legislative committee should study:

> Neonatal intensive care. The 39-bed unit at Grady serves very sick and tiny babies from throughout the northern half of the state. These babies run up bills averaging $4,000 to $5,000 daily. Nine of 10 babies treated in that unit are on Medicaid, which pays the hospital only a fraction of what it costs to care for these most vulnerable of patients. The hospital also operates a specialty care unit for mothers at high risk of delivering premature babies. If the state funding formula for Medicaid isn't changed, the state should find a more stable funding source for these services.

> Burns, sickle cell and poison control. Grady operates one of the state's two burn-treatment units, where the cost for intensive treatment to prevent wound infections and start patients on a long road to rehabilitation is extremely high. It also has one of the country's only comprehensive sickle cell treatment centers, where patients from throughout the state come when they are in crisis and to learn techniques to control their disease. Georgia's only poison control center is operated out of Grady as well.

The state provides a small level of funding for all three. If the committee cannot recommend a way for the state to increase its contribution, Grady may be forced to shut down all or some of these important services.

> The psychiatric ward. Grady's 24-bed psychiatric unit routinely becomes a temporary home to dozens of patients who are acutely ill and unable to be treated effectively by the state's regional mental health facilities. It also handles mentally ill and drug-addicted prisoners transferred from Fulton and DeKalb county jails and the city of Atlanta jail. Many, if not most, of these patients are uninsured. If Grady is to become, by extension, a state acute-care psychiatric facility, the state ought to financially support it.

> Training doctors. Grady is by far the state's largest teaching hospital. One of four doctors practicing in Georgia trained at Grady at one time; 54 percent of the physicians in metro Atlanta cycled through Grady as interns or residents. The state funding formula for graduate medical education allows up to $10,000 in payment per resident physician. Yet the state pays only $2,000. If the state paid the maximum allowable amount, it could access even more federal dollars to support doctor training, not just for Grady but for the nine other teaching hospitals around the state. Full funding for Grady alone would net about $12 million to 15 million more than the hospital is now getting.

> Medicaid reimbursement. Years ago, when the state established a special trust fund through Medicaid to help hospitals that treat a disproportionate share of poor patients, Grady was one of only a handful that got that designation. Now more than 100 of the state's 160 hospitals have been allowed into the program. That means Grady gets less from the fund than it deserves.

Last year, the hospital projected it would get $90.8 million —- essentially what it received from the trust fund in 2005. Instead, because the pool of available money is now spread among so many other hospitals, Grady got $68.7 million. Compounding that financial damage, Grady lost an additional $19 million last year from yet another special Medicaid program. While some of that loss occurred because Grady's record-keeping was incomplete, the state formula still needs to be revised so that only hospitals that truly serve a high percentage of poor patients have access to the trust fund and other special programs.

Because the Legislature does not convene until January, the state may not be in a position right now to help Grady through its immediate financial crisis. But state officials, by agreeing to study these and other issues and also agreeing to take action to deal with them, may provide the assurance that lenders need to keep Grady operating until then.

—- Mike King, for the editorial board (mking@ajc.com)

WHERE WE STAND

If Grady Memorial Hospital is to survive to fulfill its unique mission in metro Atlanta, its governing board, the Fulton-DeKalb Hospital Authority, must make fundamental changes in governance. Hospital management should be shifted to a nonprofit board better equipped to run the facility in a competitive medical marketplace. Elected officials in both counties must also decide the proper level of local funding for the hospital. Because Grady Hospital is also the sole provider of care for patients around North Georgia needing special services they can't get elsewhere, the state of Georgia should directly subsidize some Grady operations with tax dollars.

Previous editorials in this series have examined trauma funding (July 1) and the decisions Fulton and DeKalb leaders must face (July 18).