Old Grady hospital board flexes muscles

The Fulton-DeKalb Hospital Authority, largely removed from power when a corporate board took over Grady Memorial Hospital last year, is flexing its muscles in a multimillion-dollar way.

The authority was essentially pushed aside when hospital officials signed the agreement that created a new corporate board early last year.

In recent weeks, however, the authority has re-emerged as a powerful player, becoming Grady's chief communicator on money issues with the Fulton County Commission, The Atlanta Journal-Constitution has learned.

The Fulton commission provides about $80 million a year toward Grady's approximately $650 million budget.

As tension has mounted between the Fulton County Commission and Grady's corporate board, commissioners have seized the opportunity to largely bypass the corporation in favor of the more familiar authority.

The county commission had dealt with the authority for years before the corporation was formed last year. The county commission actually appoints seven of 10 members on the authority, and several commissioners said they feel more of a bond and a greater chance for accountability with that group.

The corporation, aware of the money at stake, is cooperating with the county's demand.

Pete Correll, the chairman of the corporate board, said the authority and the corporate board are "joined at the hip" regarding the strategy for Grady's future, so switching roles for the county commission is not a problem.

"If this is what Fulton County wants, that's fine," Correll said.

The county commission and Grady's corporate board have spent months bitterly arguing over Fulton's payments to Grady. Grady had to borrow $20 million this month to make payroll, in part due to the lag on county payments, said hospital spokesman Matt Gove. Some commission members, however, countered that Grady has been slow to provide documentation that justifies the Fulton payments.

The clash has provided the opening for the authority to re-emerge as a player. In turn, the authority's presence has smoothed some tensions and opened the possibility of county money flowing to Grady.

"The authority is reasserting itself," said Fulton Commissioner Emma Darnell. "We are demanding that the authority assume its responsibility."

Darnell pointed out that the commission's 25-year-old contract with Grady, for indigent medical care for Fulton residents, is with the authority, not the corporation.

Fulton County Commission Chairman John Eaves said the new arrangement has helped work out difficulties in regards to Fulton payments to Grady.

The county has been behind on payments, due in part to an arrangement in which Grady must provide monthly documentation on the use of Fulton dollars. Fulton commissioners say they want to make sure county money is spent on needy county residents.

Grady spokesman Gove said the county will owe the hospital $34 million by the end of the year.

The county commission on Nov. 4  approved a resolution to pay Grady the owed money. That agreement must now be approved by the Fulton-DeKalb Hospital Authority. Under the resolution, Grady would only have to provide a quarterly accounting of its use of Fulton dollars, not monthly, Eaves said. Producing the information monthly had become a strain, hospital officials said.

Fulton commissioner Tom Lowe said he opposes the new role for the authority. He believes the corporation officials and hospital CEO Michael Young are the closest to the issues.

"We're talking to the right people," Lowe said. "This just adds another layer of bureaucracy."

The Grady authority has not assumed the role it played before the creation of the corporate board. The authority, commonly called the old Grady board, still owns the hospital, and leases it to the new board to run the system.

The corporate board, formally called the Grady Memorial Hospital Corp., still makes policy decisions over the Grady health system, crafts the budget and manages the hospital CEO.

The authority was essentially forced from power last year by a move, driven largely by Atlanta business leaders, to change the leadership at the financially strapped hospital. Critics of the old board said it had failed to turn around the facility. The transfer of power was backed by a promise of $200 million in capital money from the Woodruff Foundation.

Some patient advocates branded the transfer of leadership a corporate take over, and worried that it would compromise the hospital's mission of being the last resort of care for the needy.

It remains unclear whether the authority will take on even more influence over Grady down the line.

Fulton Commissioner Lynne Riley said she wants the authority to respond to the county commission on all policy, budget and contract issues.

Darnell  said that despite the change in Grady leadership, she does not see the corporation board solving the Grady's financial problems.

Corporation officials said the new leadership is saving the hospital from ruin, and has raised more than $300 million in donations for capital improvements. It has also saved Grady about $60 million in the past year, through better contracts, payroll deductions and greater efficiencies, Gove said.