Emory Report
June 9, 2008
Volume 60, Number 32



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June 9, 2008
Community rescue effort gets Grady off critical list

By Martha Nolan McKenzie

A little more than a year ago, it looked as if Atlanta’s Grady Memorial Hospital was poised to follow in the footsteps of large public hospitals in Philadelphia, Washington, D.C. and Los Angeles. Caught between spiraling costs and falling funding, these institutions were forced to close their doors.

However, Grady apparently had something the other hospitals lacked — a committed, visionary, and influential group of supporters, who were determined that the hospital must survive. They orchestrated a turnaround, and today the hospital has new leadership, an infusion of funding, and a plan for moving forward.
“The community stepped forward and rallied behind its mission and goals. That is what saved Grady,” says Chancellor Michael M.E. Johns.

Grady’s mission is to care for the city’s indigent. And while it fulfills this promise, its importance reaches far beyond. Staffed by Emory and Morehouse physicians, it has one of the nation’s leading trauma centers — and the only Level One trauma center serving Metro Atlanta and North Georgia. It operates the state’s only poison control center,

Atlanta’s only burn center, and one of the country’s largest HIV/AIDS programs. And Grady is the training ground for future doctors, nurses and other health care professionals. Indeed, one out of four doctors in Georgia trained at Grady through Emory or Morehouse.

All the services Grady provides, while critical, are costly, and getting more so. The number of uninsured is climbing. However, Grady’s funding — from county and state government, as well as from Medicare and Medicaid — has shrunk dramatically over the past decade. As a result, Grady finished last year with a $55 million deficit, and one foot poised above the grave.

In an effort to save the failing institution, the Metro Atlanta Chamber of Commerce created a task force of prominent business and community leaders to develop a plan to resuscitate Grady. In July, the task force issued a concise, 23-page report outlining its vision for the hospital.

High on the list of recommendations was revamping its structure from the outdated hospital authority model to a 501(c)3 nonprofit organization, governed by a nonpolitical, private board.

The new 17-member board is chaired by Pete Correll, chairman emeritus of the Georgia-Pacific Corp., and includes Louis Sullivan, former U.S. Department of Health and Human Services secretary, prominent attorneys, CEOs of several large corporations, among others.

“The idea of replacing the politically appointed board with a board whose primary fiduciary responsibility was to the hospital and its mission was a critical piece for the success of the plan,” says Johns. “These are people who have leadership ability, but they also have clout. People will listen to them.”

The change in management cleared the way for Grady to receive a life-saving pledge of $200 million over four years from the Robert W. Woodruff Foundation. The magnitude of the gift will make it easier to get others to contribute.

“We’ve committed to raise another $100 million over next four years, and I have every expectation we can do more than that,” says Correll.

However, some hoped-for funding has fallen through. Although the outlook for legislation to fund a statewide trauma care network was optimistic, the General Assembly ended its last session without approving the bill.
The hospital also needs to shave its operating costs by $50 to $60 million a year.

Despite the challenges ahead, Grady has managed to get off the critical list and is taking the first steps toward recovery.

“The task force report clearly outlined the issues and the direction to go forward,” says Johns. “It rallied the entire community behind the value and contribution Grady makes to our city and state. Grady’s new board has the talent and commitment to make what needs to happen, happen. Now the hard work begins.”