Emory forgives $20 million of Grady’s debt

Emory University has eliminated $20 million of the debt owed by Grady Memorial Hospital in a gesture to help the struggling hospital continue to survive, officials said Thursday.

In addition, Grady officials met this week with the heads of several metro Atlanta hospitals to request that they contribute a total of $30 million to help the safety-net facility over the next four to five years, said Pete Correll, head of the Grady board of directors.

Grady hospital continues to provide the bulk of trauma and indigent care to the region, two services that cost the hospital millions more than it recoups. Grady officials say they believe the other hospitals should help Grady shoulder that burden, since, without Grady, these hospitals would be flooded with indigent clients and have to provide their own trauma care.

“This is a community issue,” said Grady CEO Michael Young on Thursday.

Even with Emory forgiving $20 million of Grady’s debt, Grady still owes Emory about $44 million, Correll said. The Emory medical school provides many of the doctors who work at Grady, and Grady has not been able to pay for them for years.

Correll praised the Emory move.

“I just think it is a tremendous gesture, and one more example of the outpouring of support from the community,” Correll said.

Other hospital organizations represented at Monday’s meeting at Georgia Hospital Association headquarters included WellStar Health System, Atlanta Medical Center, Southern Regional Health System, Gwinnett Medical Center, Piedmont Healthcare, and DeKalb Medical Center.

“There was discussion of how the metro Atlanta community could help save one of the state’s most important health care resources, Grady,” said Kevin Bloye, a GHA vice president.

About two years ago, Grady officials said the hospital was in such bad financial shape that it was close to closing. Grady has since restructured its leadership and hired a new CEO. Officials say the hospital remains on shaky financial ground and that it will have a $40 million to $50 million operating debt this year.

Correll said the meeting with the other hospital CEOs was positive. But aside from the Emory commitment that had come before the meeting, none of the hospital heads made financial commitments.

Correll said the hospital leaders have yet to make a formal, final response to the request.