Though a $25 million shortfall in federal dollars to Grady Memorial Hospital is expected to be cut in half, the hospital continues to face a big funding gap and still plans to close two neighborhood clinics, a hospital spokesman said.
Grady has been working with state officials to lessen the blow to its share of the Indigent Care Trust Fund to pay for poor and uninsured patients, but it is still receiving $12 million to $13 million less than it did last year, spokesman Matt Gove said. The hospital is also facing cuts in funding from DeKalb and Fulton counties of about $3 million each.
“There is still a big gap,” Chief Financial Officer Sue McCarthy said at a board meeting Monday.
Changes announced so far -- including the two clinic closures, 100 job cuts and increases to co-pays for prescription drugs -- are expected to save Grady $10 million. The hospital may be able to manage the rest of the shortfall, roughly $10 million, without more significant changes to services, which officials expected to have to make in the next month or two, Gove said. “That’s a better place than we were two weeks ago.”
Grady officials recently announced they would shut two clinics -- the South DeKalb Health Center in Decatur and the Otis W. Smith Health Center in southwest Atlanta -- within 60 to 90 days. The base prescription drug co-pay will also increase from $2 to $3, and homeless patients will have to pay $1 per prescription, among other co-pay increases, starting April 4.
Grady was able to mitigate the loss of federal money by having the state make a $12 million allocation to the Morehouse School of Medicine without funneling it through Grady, which affected how its payment from the indigent fund was calculated, Gove said.
Grady’s end-of-the year financial results for 2010 were also “not as bad as it could have been,” he said. The hospital experienced a $6.3 million loss overall last year, compared with an $11.5 million loss through November.
Part of the loss was related to a number of one-time costs, including paying medical malpractice claims from the past nine years and millions of dollars in much-needed repairs, Grady CEO Mike Young said.
The hospital faced a number of financial hurdles in 2010. It saw a nearly $10 million rise in salaries, compared with 2009, in part because of staffing increases necessary to help jump-start an electronic medical records system. The hospital also saw a 3.2 percent increase in uninsured patients and a 1.5 percent drop in insured patients last year, McCarthy said.
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