By

Thomas J. Lawley, MD
Dean, Emory University School of Medicine

Michael M.E. Johns, MD
Executive Vice President for Health Affairs, Emory University
Chairman of the Board, Emory Healthcare

The AJC's September 1 article, "Audit criticized Emory for its bookkeeping at Grady," is incomplete and misleading in its discussion of Emory and the critical role our medical school plays at Grady. Without clarification the article could be read to imply that Emory might intentionally have acted in a way that would harm Grady or compromise the services provided by our physicians there. All of the relevant facts paint a very different picture.

What the AJC's article calls an "audit" was, in fact, not an audit. It was a consultant's report. It did not have anything to do with "bookkeeping." To our knowledge, its recommendations were never formally adopted by the Fulton-DeKalb Hospital Authority, nor were they presented by the Authority to the medical schools.

However, this same consultant's report did affirm that Emory is adhering to the terms of our contract with the Authority. This same consultant's report did affirm that Grady is under-paying both Emory and Morehouse by $60,000 per year for each of our faculty physicians engaged in resident teaching and supervision -- requiring subsidies of Grady by the schools amounting to more than $6 million per year by Emory and $2 million per year by Morehouse for each of the two years studied by the consultant. (Between our two schools, Emory and Morehouse provide all the faculty physicians and medical residents who comprise the medical staff at Grady, serving every day on the wards, in out-patient clinics, and in specialty centers of excellence.)

The issue about faculty time reporting that the AJC article focused on involves only about one-quarter of our budget at Grady -- reflecting that percentage of faculty time which is devoted to the teaching and supervision of residents. Indeed, the medical faculty at Grady train 25% of the doctors who practice in Georgia. Our residency training programs are ranked among the top in the country, and residents apply to our programs because of the excellent training and supervision they receive at Grady.

A separate analysis of the faculty time reporting issue by the Huron Consulting Group, commissioned by Emory, found that Emory was in compliance with the contract, and added that the frequency of the reporting and methodology used is "comparable to the effort reporting system required under federal regulations for institutions and faculty who receive federal research grant funding."

At our own expense, Emory developed a new electronic faculty time reporting system, tested it, and began using it in November 2005 to increase efficiency and accuracy. While Grady's consultant recommended the system used by the Veterans Administration hospitals, the VA system relies significantly on the VA electronic medical record -- another badly needed, and costly, infrastructure upgrade that Grady lacks.

In addition to teaching and supervision, our faculty physicians provide $26 million worth of compensated service directly to Grady, partially supported by state patient care grants and contracts. Emory itself provides an additional $25 million per year in faculty support.

Finally, our physicians at Grady contribute more than $24 million per year in charitable care for indigent patients -- completely uncompensated medical care that is given to the needy because we share Grady's mission of service.

To address the connotations of the "bookkeeping" reference in the AJC's headline, let us add for the record that Emory pays nearly $900,000 per year to support a full-time Office of Compliance Programs, consisting of nine professionals, who spend nearly one-third of their time monitoring physician billing to third-party payers and doing training and oversight at Grady. That is a separate issue than the one addressed in the consultant's report, but it is one that we take very seriously.

The bottom line is this: currently, the Emory University School of Medicine, along with Morehouse School of Medicine, massively subsidizes Grady. Grady's combined debt to our two schools is over $54 million and continuing to grow at the rate of more than $5 million every month. The extraordinary degree of patience and generosity that Emory (as well as Morehouse) has shown to date, which is founded in our University's vision for societal engagement and our heartfelt commitment to care of the needy, is nevertheless not fiscally sustainable for very much longer.

Governance has to change, as the Metro Task Force said, and new business models and new forms of financial support need to fall into place quickly, with Grady facing the real prospect of closure otherwise.

Time is of the essence.

- 9/4/07