Government Lies, Corruption and Mismanagement

Grady Memorial Hospital in Atlanta, Georgia, is Near Financial Disaster

African-American community activist Joe Beasley put it bluntly when speaking against a plan by business leaders to save the financially imperiled Grady Memorial Hospital by shifting management away from its current board. "It's about race," Beasley told the majority black Fulton County Commission last week. "If we don't know it and don't deal with it, we're just whistling Dixie."

Black and white: the underlying Grady debate
By GAYLE WHITE, The Atlanta Journal-Constitution, 08/09/07


African-American community activist Joe Beasley put it bluntly when speaking against a plan by business leaders to save the financially imperiled Grady Memorial Hospital by shifting management away from its current board.

"It's about race," Beasley told the majority black Fulton County Commission last week. "If we don't know it and don't deal with it, we're just whistling Dixie."

Beasley, the Southern regional director for the Rainbow/PUSH Coalition, was voicing publicly a suspicion usually acknowledged in hints and whispers — that race and class, power and politics motivate those who claim to have Grady's best interests at heart.

At issue is the racial makeup of the bodies making decisions about the health system. The Fulton-DeKalb Hospital Authority, which currently runs Grady, is majority black, as are the governmental bodies who appoint its members.

But a Metropolitan Atlanta Chamber of Commerce task force, which recommended taking day-to-day operations out of the authority's hands, is majority white.

"The race issue is going to be there," said Michael Russell, black CEO of H.J. Russell & Co., and co-chairman of the chamber task force. "For some people, it will never go away."

But, he said, he hopes people will realize the goal of the task force "is to help Grady to operate stably in the long run."

Race is clearly "an unfortunate undercurrent" in discussions about the fate of the state's largest public hospital, acknowledged A.D. "Pete" Correll, Russell's co-chairman and white chairman emeritus of Georgia-Pacific. But Correll dismissed racial division as a factor in the chamber task force's proposal.

"This is about green — not black or white," said Correll. "It's about money."

In an interview, his frustration quickly became obvious.

"We simply have got to quit talking about political power and talk about how we're going to pay for care for people of this community," he said. "I don't give a damn who's in charge."

At the center of the current tension is the task force's insistence that the Fulton-DeKalb Hospital Authority turn over day-to-day operations to a private, nonprofit corporation as a "critical first step" in redeeming the hospital's financial stability.

But progress is slow despite warnings that the hospital could fail to make payroll by the end of the year. The hospital authority has not acted on the plan except to hire the law firm of Troutman Sanders last week to report back on legal issues in about two months. And the final meeting of a joint committee of Fulton and DeKalb commissioners ended Monday with no formal agreement.

Hospital officials plan a Grady summit Aug. 13 to bring together state and county leaders.

The chamber formed the task force at the request of the hospital authority, which is burdened by a debt so severe that many vendors require cash-on-demand for supplies. The task force concluded that Grady Health System, which has lost money every year since 2000, needs an immediate infusion of $120 million to pay bills and meet critical capital needs.

But, the business leaders warned, the hospital system cannot attract the financial help it needs from the state, banks and other sources under its present "political" structure. Among members' recommendations are that the board include representatives of the Emory and Morehouse medical schools, and people with expertise in business, finance and technology.

Hospital authority trustees are capable of running the hospital, said DeKalb CEO Vernon Jones, an African-American.

"What's a business person?" he asked. "It's in the eye of the beholder."

Jones's DeKalb County appointees to the Grady board are physician Dexter Page, limousine company owner Frank Monteith, and Pamela Stephenson, a lawyer and state legislator who chairs the board. All are black — as are a total of seven of the current nine board members.

"They may not look like Pete Correll," Jones told the newspaper's editorial board, "but they're very competent."

The Rev. Joseph Lowery articulated the sentiments expressed by some other black leaders, including some Grady board members.

"I don't think the problem with Grady is management," he said. "It's resources. Grady deserves statewide support."

White Republican state leaders are showing some willingness to give Grady aid, but with conditions.

Lt. Gov. Casey Cagle, for example, has said that if the hospital board doesn't overhaul its governance, he'll ask the Legislature to do it.

In its July 13 final report, the chamber task force recommends Grady be governed by "a highly effective slate of community leaders" on the proposed nonprofit board. Both Correll and Russell have said they would be willing to serve on such a board.

Although seven prominent African-Americans, including Russell, were among the 17 task force members, Beasley sees the effort as a white "power grab."

"They don't think the Fulton County Commission and the Grady board, which are majority black, have the competence to run Grady Hospital," he charged.

Beasley, for his part, wants to make sure black political leaders hold on to the governments they lead.

Grady funding measure pushed to September
Atlanta Business Chronicle - 9:20 AM EDT Tuesday, August 7, 2007by Doug SamsStaff Writer

As Grady Memorial Hospital edges closer to the financial brink, it will have to wait for at least $20 million in emergency funding from Fulton and DeKalb counties that could help it get through the end of the year.

On Monday, a joint committee of Fulton and DeKalb commissioners could only offer Grady the possibility that the funding may come through by the end of September -- just weeks before the hospital's financial crisis is projected to leave it struggling to meet payroll.

Fulton commissioners could vote on the funding measure by no earlier than Sept. 20, after public hearings on the county budget. DeKalb commissioners may also take up the measure by the end of next month, said Commissioner Larry Johnson. Even so, DeKalb CEO Vernon Jones has said recently that Fulton and DeKalb cannot shoulder the Grady funding burden alone, suggesting that the state and other counties should consider setting aside money for the state's largest safety net hospital for the poor and uninsured.

Johnson and fellow Commissioner Connie Stokes echoed Jones' sentiment Monday, as both said DeKalb was not ready to support a resolution providing additional Grady funding,

"We are not at that point,' Stokes said at Monday's task force. "We must see how other counties are going to participate."

Fulton and DeKalb counties are the only Georgia counties that provide Grady annual funding. Fulton gives Grady about $84 million annually, while DeKalb provides about $21 million.

The joint Fulton-DeKalb task force was formed earlier this summer in the wake of a report issued by a group of Atlanta business, health-care and academic leaders that aimed to save the hospital from, in a worst case scenario, closing its doors. Known as the Greater Grady Task Force, it painted a dire financial picture for Grady, including a $120 million shortfall in 2007. The task force also said Grady will need an estimated $370 million from the state, counties and possibly other sources to accomplish a two-year turnaround.

Ideally, at least from Grady's standpoint, Fulton and DeKalb commissioners would have left Monday's meeting with a funding resolution in hand to take back to their boards. While not having the resolution doesn't shut the door on emergency funding for Grady, it also doesn't leave it wide open.

"There is an urgency," Eaves said. "We've started this (Task Force) weeks ago."

Grady stalemate: Cure eludes Fulton, DeKalb
By CRAIG SCHNEIDER, The Atlanta Journal-Constitution, 08/07/07

In the end, Fulton and DeKalb counties couldn't agree on how to bail out Grady Memorial Hospital.

Now, state, county and hospital officials, and perhaps the governor and lieutenant governor, will meet to try to figure out how to save the financially troubled hospital, which could be broke by the end of the year.

If that were to happen, the region could lose a major trauma center and teaching hospital — and thousands of poor people who are treated at Grady each year would have to find other emergency rooms to take them.

Grady is one of the nation's oldest public hospitals, and it has lost money in the past seven years, in part because of changes to the federal Medicare and Medicaid programs and an increase in the number of patients who are poor and uninsured.

As officials scramble to save the hospital, much of the discussion has focused on a recent report by the Metro Atlanta Chamber of Commerce, which concluded the board should hand over daily control to a nonpolitical nonprofit corporation.

That could restore the confidence of the state and financial community, which in turn might infuse the hospital with more money, the chamber said.

But Monday's meeting of Fulton and DeKalb officials made clear that disagreements abound on that recommendation, and the two sides could not agree on how to fund — and run — the hospital.

The meeting was the third and final of a committee made up of two county commissioners from DeKalb and two from Fulton.

Again and again, Fulton County Commissioner John Eaves pressed the DeKalb commissioners to agree to the change in Grady control — and to provide the hospital $20 million in emergency aid.

But the DeKalb commissioners said they wanted more answers and public input before deciding.

"What do we need to do?" said Eaves, who was clearly frustrated. "What do we need to do?"

Connie Stokes, who serves on the committee with DeKalb Commissioner Larry Johnson, said they are not prepared to make any commitments.

"All the questions are not answered," she said.

Stokes planned to discuss the Grady issue with her fellow DeKalb commissioners during a work session Tuesday. She also wants to explore options beyond the chamber's suggestions, such as pressing surrounding counties to help fund Grady Hospital, she said.

Fulton Commissioner Lynne Riley held out hope for the upcoming summit, saying she hoped it "will bring us significant answers."

Last week, the Fulton County Board of Commissioners postponed a vote on endorsing the chamber plan. At its meeting, the Grady board didn't vote on the chamber plan and decided to hire a prominent legal firm to review the proposal.

With so many question still swirling around the hospital's fate, the summit, to be held Aug. 13 at the Loudermilk Center in Atlanta, will be the next step in the ongoing struggle to save Grady.

The purpose, said Pam Stephenson, chairwoman of the Grady board, is to foster agreements among the many state, county and hospital officials.

"This way" Stephenson said, "everyone can hear the issues."

Take a more nuanced view of Grady's clinic network
By HOGAI NASSERY, 08/09/07

Grady employees have eagerly read the recent articles in the AJC that have examined ways to ensure Grady's survival. This dialogue gives us hope that community leaders really understand both the value we offer and the challenges we face in our health system.

In his Aug. 6 editorial, Mike King looks at the financial viability of Grady's nine neighborhood health centers ("It may be time to close some clinics," @issue). As the director of the Department of Community Medicine at Grady, which staffs four of these centers with physicians, I would like to address some of his concerns.

King is correct that public health care for the uninsured and underinsured in DeKalb and Fulton counties could be better coordinated. With the current structure, neither the Fulton nor the DeKalb health departments are able to treat most of the chronic diseases encountered in the Grady Health Centers. They are very skilled at the programs they do offer, which target specific health issues, like sexually transmitted infections.

At our North DeKalb Health Center in Chamblee, the DeKalb Health Department directs patients with chest pain or a sinus infection to our Grady staff for diagnosis and treatment. It's important for Atlanta to realize that the 14 health centers staffed by DeKalb and Fulton counties are not an alternative for our patients with high blood pressure, diabetes, congestive heart failure or other chronic conditions.

King used data from the Alvarez & Marsal Strategic Plan to cite our North DeKalb and North Fulton health centers as money losers. Unfortunately, that data does not include the revenue generated by referrals from those centers to Grady. The number of obstetric deliveries referred to Grady by those two sites alone generates more than $4 million in obstetric and newborn billings per year for Grady. That more than covers the $2.1 million in "losses" detailed in the A & M document. They are also two of the highest points of cash collections within Grady.

The $3.36 million in "losses" that is projected for the health centers needs closer examination. The data in the A&M report attributes $2.95 million in transfer of costs from main Grady to the health centers for overhead, like paying for human resources and payroll staff provided by the health system. These are costs the health centers would not have to bear if they were freestanding.

So, in theory, this should mean that if the nine centers were closed tomorrow, this expense would vanish. Most of us at Grady realize that is pretty darn unlikely. The human resources and payroll staff at Grady are not going to be cut in half if our sites were to close. It is important that we understand the data before we make any decisions that would affect our patients' access to care.

There are more important reasons that the centers are essential to Grady and the community. We follow more than 2,500 diabetic patients in our department's four health centers. Our laboratory data illustrates that we are able to significantly reduce their blood sugars with treatment. This degree of reduction saves Grady more than $7 million over three years in medication and hospitalization costs. And our patients feel better.

The care we provide also helps surrounding hospitals that would otherwise have to accommodate more uninsured patients in their overcrowded emergency rooms. It's better for everyone, particularly our patients, if our health centers are open.

We know that if Grady doesn't survive, neither will our clinics. We would welcome any efforts to better align our work with that of the Fulton and DeKalb health departments, and King makes a very good argument for increased county funding for both our North Fulton and North DeKalb health centers.

But for now, the federally qualified health centers in the Atlanta area are overwhelmed and underfunded, and the health departments have a mission that is essential but very different from ours. If our nine clinics were closed, there is no way they could accommodate the "more than 200,000 patient visits" we handled in 2006.

The care we provide is not "widely duplicated." Just ask our patients.

Grady board urged to change
Medical schools push for transfer

By Gayle White, The Atlanta Journal-Constitution, 08/09/07

In a strongly worded letter, top officials of Emory and Morehouse schools of medicine are urging the board that governs Grady Health System to act quickly and decisively in transferring the hospital system to a private, nonprofit corporation.

"Failure or delay to do so risks the collapse of Grady as a hospital and will directly threaten the healthcare of many citizens of Atlanta, the region and the State," says the letter, dated Aug. 6.

The letter was mailed to members of the Fulton-DeKalb Hospital Authority, which governs Grady, with copies to commissioners of Fulton and DeKalb counties, who appoint authority members.

It is signed by Michael Johns, CEO of Emory's Woodruff Health Sciences Center; John Maupin, president of Morehouse School of Medicine; and deans Thomas Lawley of Emory and Eve Higginbotham of Morehouse.

The two schools furnish Grady's physicians from their faculties and residents and train medical students there.

Grady owes the schools $48.4 million for providing its medical staff, according to the letter. The debt "has seriously compromised our ability to carry out our mission to educate and train physicians needed by all of Georgia and beyond," the letter said.

Emory officials declined additional comment on the letter. "The letter speaks for itself," said Jeffrey Molter, a spokesman for the Woodruff Health Sciences Center. "While we're happy to discuss any and all these points with members of the Fulton-DeKalb Hospital Authority, we would prefer to have that discussion directly with them first."

Maupin and Higginbotham were traveling and were unavailable. Hospital authority chairwoman Pamela Stephenson also could not be reached.

The letter comes as the hospital authority considers the proposal of a task force of the Metropolitan Atlanta Chamber of Commerce to change how the hospital is governed. The task force, formed at the authority's request, says creating a private, nonprofit corporation is essential to attract the financing to keep the health system afloat.

Grady Health System has lost money each year since 2000, and consultants say it could fail to meet payroll by the end of the year without an infusion of cash.

The school officials called the transfer of control "the necessary first step to avoid Grady's imminent collapse."