Facing a projected $15 million overall loss in 2011, Grady Memorial Hospital executives are searching for ways to trim costs and operate more efficiently in an effort to avoid more job or service cuts.
The safety net hospital in downtown Atlanta finished last year with a nominal $208,000 loss – the second year in a row it has come close to break-even or better.
In 2011, however, Grady faces new financial hurdles that have prompted officials to cut 100 jobs, increase prescription drug co-pays and announce the closures of two neighborhood clinics. While the changes are expected to save nearly $9 million, Grady still faces a roughly $10 million funding gap.
“We have much to overcome,” Chief Financial Officer Sue McCarthy told Grady corporate board members Monday.
With their own budgets being squeezed, DeKalb and Fulton counties cut their allotments to the hospital to care for poor and uninsured patients by about $3 million each this year. Grady also saw a roughly $12 million drop in federal dollars for indigent care. So far in 2011, Grady has an $11.2 million overall loss, compared with a $2 million loss at the same time last year.
Executives are looking for ways to make day-to-day operations more efficient, though they said more job cuts and major service changes are possible.
One major goal is lowering the average length of stay for patients, said Mark Chastang, Grady’s new chief operating officer. Keeping overtime to a minimum, properly documenting care to ensure reimbursement and attracting insured patients by growing specialties such as Grady’s new Marcus Stroke & Neuroscience Center are also key, he said.
Hospital executives have also identified roughly $20 million in other potential cuts if needed, though that doesn’t mean they will be carried out.
Those options include cutting another 100 jobs, reducing the number of inpatient beds available, further increasing co-pays for the uninsured, ending dialysis treatment for prisoners and closing the family planning clinic, said Joe Rogers, chairman of the board’s finance committee.
“It’s unlikely we’ll have to travel down that road very far," Rogers said.
Grady board Chairman Pete Correll said he believes there’s a good chance Grady can avoid more job cuts this year. If Fulton and DeKalb counties continue to be squeezed financially, however, Grady will be hit too, he said. Fulton faces a $100 million deficit in fiscal 2012.
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