New details: Financial rescue planned for Grady Health System

Credit: Steve Schaefer

Credit: Steve Schaefer

After nearby Atlanta Medical Center announced its closure, work began to ensure Grady has the funds to respond to an expected influx of new patients

State officials are discussing a one-time aid package of nearly $200 million for Grady Health System, made up of federal relief dollars and tens of millions lined up through private philanthropies, according to three officials with knowledge of the talks.

Gov. Brian Kemp, Atlanta Mayor Andre Dickens, DeKalb chief executive Michael Thurmond and Fulton County Commission chair Rob Pitts met Monday to discuss the rescue package weeks after the unexpected announcement from Wellstar Health System that it will shutter Atlanta Medical Center in November.

The final dollars are in flux, but it’s expected to include more than $100 million from money that Georgia was allocated through the American Rescue Plan Act, a federal coronavirus relief package. As the governor, Kemp has the unilateral authority to do with those funds as he pleases.

The influx of funding could add nearly 200 beds to Grady Memorial Hospital, according to one official with direct knowledge. Grady would be the city’s only high-level trauma center after the century-old Atlanta Medical Center, a 460-bed hospital known as AMC, closes in less than two months.

Both Grady and AMC act as safety net hospitals for some of metro Atlanta’s poorest residents, serving thousands of uninsured patients. The closure will immediately increase the strain on nearby Grady and other regional hospitals.

Grady officials declined to comment on Monday’s reported financial aid package, but the hospital is expected to welcome the new money. Still unknown is whether the amount will be enough, and if it will come quickly enough to help Grady serve potentially thousands of new patients.

Even as Kemp is talking about Grady taking on more patients, officials of DeKalb and Fulton counties, which help fund Grady, are expressing mounting concerns about its future viability. DeKalb lawmakers are also considering rushing a substantial new payment to help the hospital.

John Haupert, CEO of Grady Health System, told the AJC in July that Grady’s finances were in the red, with the cost of temporary nurses largely to blame for a deficit of about $50 million. At the time, Haupert said the budget issues “are almost entirely related to labor cost.”

Grady planned to implement some cost cuts not directly related to patient care, Haupert said. Unlike other hospitals, Fulton and DeKalb counties jointly own Grady Health System, which has its main hospital in downtown Atlanta and network of clinics that serve medically needy and indigent residents.

As for Wellstar, which surprised many with its decision to close AMC, officials said they tried everything to save the hospital but folded in the face of insurmountable financial losses.

In all, Wellstar invested in AMC in at least two ways: actual investments that improve the aging facility, and extra money to keep operating an unprofitable location. Altogether, Wellstar says it invested $350 million in AMC. But given Wellstar’s wealth as a hospital system, some are skeptical of its dedication to solving the problem.

The closure of AMC is also creating a political headache for Kemp. He will be on the ballot on Nov. 8, just a week after the hospital shuts down. So far, the governor has maintained a steady lead over his opponent Stacey Abrams, according to public opinion polling.

Abrams has seized on the hospital closure as a key issue in her campaign, casting blame on Kemp for opposing Medicaid expansion and leaving money on the table that could have aided the flailing hospital.

“We don’t need bandaids. Georgians deserve top quality, affordable, accessible healthcare in the metro Atlanta region,” said former Atlanta Mayor Shirley Franklin, an Abrams ally. “And the people of the region deserve state-of-the-art ‘Level 1′ trauma centers beyond the Grady Health system.”

Kemp’s campaign says that Abrams is “falsely blaming the governor” for the hospital’s financial woes. He has championed a more limited Medicaid expansion tied to work and academic requirements.

Wellstar says that Medicaid expansion alone would not have saved the facility. However, research has shown that Medicaid expansion helps hospitals stay open and bolsters residents’ access to emergency care.

-Reporter Ariel Hart contributed to this report.


What’s Next:

Gov. Brian Kemp’s office will finalize and announce the amount and sources of aid that will be provided to Grady Health System