July 18, 2007

One in a series

Local business leaders and state officials seem ready and willing to do their part to keep Grady Memorial Hospital from financial collapse. The question now is whether the elected officials of Fulton and DeKalb counties will let them.

Gov. Sonny Perdue, Lt. Gov. Casey Cagle and House Speaker Glenn Richardson have already pledged the state's help in trying to find an adequate funding source for Grady's trauma unit, which serves all of North Georgia and can be a major player in the state's struggling network of trauma hospitals. Their apparent willingness to tackle the issue is a major step forward for Grady, since the state provides no direct support for the expensive service now.

According to a final report by a Metro Atlanta Chamber of Commerce task force looking into Grady's plight, local lenders can also be lined up to keep Grady operating through the rest of the year and give it a chance to recover fully in the years to come. Given that the hospital projects a debt of $120 million by the end of the year and may otherwise be unable to make its payroll before then, that's encouraging.

However, before state officials and private benefactors step forward to rescue Grady, the hospital first has to come out from under the political control of Fulton and DeKalb's elected officials. Unless they are willing to switch management of Grady to an independent, nonprofit board, there is no hope of saving the hospital from its crushing debt, according to A.D. "Pete" Correll, the chamber's task force chairman.

"Creating a nonpolitical board creates a level of trust in investors that simply doesn't exist now," Correll says.

The Fulton-DeKalb Hospital Authority has the power to award a long-term management contract to a nonprofit corporation, which could then enter into business deals for profit-making services that a public authority is prohibited from trying. Virtually every other public hospital in the state has already made that transition.

The current 10-member Grady authority is appointed by the county commissioners of Fulton and DeKalb, as well as DeKalb's chief executive officer. Authority members have said they want the commissioners who appointed them to sign off on turning over control of the hospital, which seems reasonable. What isn't clear is whether the two commissions and the authority itself recognize the absolute necessity of the change.

"The situation is worse than I thought. Something has to change," Fulton Commission Chairman John Eaves says. "We're open to considering all options." Grady's financial crisis is on the agenda for discussion at today's Fulton County Commission meeting.

DeKalb County CEO Vernon Jones isn't buying it. Before DeKalb County even discusses how the hospital is run, Jones says, the state must agree to a specific dollar figure and a line item in the budget to pay its fair share of services for indigent patients at Grady. The chamber should also identify what lenders it says are willing to help and the terms they are demanding, he said.

Jones and commissioners in both counties have suggested that taxpayers in Clayton, Cobb and Gwinnett counties ought to be billed for the indigent care provided to their residents by Grady. For years, the three suburban counties have been accused of "dumping" poor patients on Grady, leaving Fulton and DeKalb taxpayers to pick up the tab.

Getting good numbers to back up that claim has been nearly impossible, in part because of Grady's fiscal mismanagement over the years. The evidence that does exist shows the numbers to be extremely small — indigent patients from Clayton, Cobb and Gwinnett counties accounted for less than 1 percent of the nearly 1 million patient visits to Grady and its clinics last year.

However, that small number of Clayton, Cobb and Gwinnett patients who were admitted did run up some big bills at Grady — $16.5 million in 2006 alone, according to the Georgia Hospital Association. (That high cost may be attributed in part to indigent patients brought into Grady's well-regarded but costly trauma and burn units, racking up charges that Grady has to absorb. One out of every four patients treated at Grady's trauma unit is from outside Fulton or DeKalb counties, adding punch to the argument that state support is justified.)

However, the reverse is also true. While Grady provides care for indigents from Clayton, Cobb and Gwinnett counties, public hospitals in those three counties also provide indigent care to Fulton and DeKalb residents, according to the hospital association report. Last year, more than 6,000 Fulton County residents ran up about $15 million in unpaid bills at the public hospitals in those three counties, the hospital association reports. (The association's report did not include figures for how many indigent DeKalb County residents were treated in those three neighboring counties.)

The chamber's Grady task force put the problem in the proper perspective. While it will be helpful in the long run to "true up" uninsured patient payments between the surrounding counties and the public hospitals that are supposed to serve them, "it is important to note that this alone will not materially affect or solve Grady's current financial crisis," the report concludes.

Instead, solving the crisis will take an act of statesmanship and realism by the hospital authority and Fulton and DeKalb's elected officials. Combined, those two counties contribute more than $100 million annually to offset Grady's losses, and that cost would undoubtedly soar if county officials try to keep Grady alive without luring outside financial support.

The leaders of Fulton and DeKalb — for decades the custodians of Grady's unique mission — must understand the fate of the institution is in their hands.

— Mike King, for the editorial board,>/b> (mking@ajc.com)