Grady Hospital Governing Board Discusses Funding Solutions

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(APN) ATLANTA — Members of the Fulton/DeKalb Hospital Authority (FDHA) exploratory committee and ad hoc advisory group met Tuesday, October 30, 2007, to discuss possible funding solutions to the crisis at Grady Memorial Hospital.

The exploratory committee consists primarily of members of the FDHA that governs Grady while the advisory group includes members of the business community whose role it is to make some suggestions to the exploratory committee on how to solve the Grady funding problem.

Michael R. Hollis, member of the exploratory committee and Grady Board of Trustees, offered a PowerPoint presentation outlining where Grady stands financially and what it will take to put the hospital back in the financial black.

Hollis’s report calls for increased funding from the State of Georgia, as well as members of the private sector, like foundations and corporations, and Fulton and DeKalb Counties.

The report suggests the Georgia General Assembly determine a method for annual funding that would come from state coffers.

Ted Brodek, member of the Grady Coalition community organization, suggested from the audience that the State impose a small, statewide sales tax that could fund Grady.

Hollis agreed that is an option members of the committee should explore. The Jackson Memorial Hospital in Miami, Florida, a “safety net” hospital similar to Grady, benefits from a half-cent sales tax and ad valorem tax.

Overall, Hollis’s report suggests the State could play the biggest role when it comes to saving Grady financially.

“We’re [the exploratory committee] not going to be bashful,” Hollis said when it comes to asking the State for more money.

The presentation also looked at the option of a $100 million “bridge loan” that Citigroup is willing to provide only if Fulton and/or DeKalb Counties guarantee the loan, an idea to which Commissioners in both counties have expressed harsh opposition.

The FDHA proposed this large loan as part of its immediate $125 million Grady stabilization plan, which members approved August 21, 2007.

As reported in Atlanta Progressive News, Commissioners from Fulton and DeKalb have already approved $15 million on September 05, 2007, and $5 million on August 01, 2007, respectively, in emergency funds.

DeKalb County commissioners approved an additional $5 million on October 09, 2007, and that money is expected to kick in next month.

Commissioners from both counties have said they cannot expect their residents to back such a large loan when they feel both counties have paid their fair share to Grady.

County Commissioners have suggested instituting a system where more counties in the metro area and around the State give money to Grady.

“We’re not going to [save Grady] by borrowing alone,” Hollis warned. “There are creative ways to utilize assets we have.”

The discussion inevitably moved to the controversial issue governance, and the room became more animated and audience members began speaking up in greater numbers.

“To assume nonprofit is going to solve our problems is a little naïve,” the Rev. Timothy McDonald, of the First Iconium Baptist Church, and member of the Grady Coalition, said. “We need money now.”‘

The FDHA and others have suggested adding a 501(c)(3) private, non-profit entity that would take over the day-to-day governance of Grady Hospital, but allow the FDHA to remain in a lesser role.

Hollis said the FDHA would remain to manage Grady’s real estate, which is valued at over $1 billion.

“Under any scenario, the hospital authority would not be dissolved,” State Rep. Pam Stephenson (D-DeKalb), co-chair of the exploratory committee, added.

Proponents of privatization contend this route will make the hospital more financially viable and open up greater funding sources from the business community.

Opponents simply call it privatization of public money, which will lead to a lack of accountability and the eventual failure of the hospital.

Terence Courtney, another member of the Grady Coalition, called the proposed privatization “a scam” and pointed out the hospital already has a 501(c)(3), the Grady Foundation.

“I don’t call this a scam [and] I’m offended by the suggestion of it,” Hollis said. “These are all options we have to explore.”

Many proponents of a private governing structure in the business community say they lack faith in the current governing structure and would not want to give money to Grady unless governance changes.

Top State government leaders have taken a similar position. Lt. Gov. Casey Cagle has said Grady must show they can be “good stewards” of State money.

The exploratory committee and the advisory group will hold a crucial meeting on November 15, 2007, to weigh the pros and cons of options discussed Tuesday in addition to spending more time on the governance issue.

Members will also discuss State funding for Grady’s Level I trauma center as well as how to possibly get other counties besides Fulton and Dekalb to pay money into Grady.

The Fulton and DeKalb County Commissions could discuss the $100 million bridge loan at their regular meetings, which will take place prior to November 15, 2007.

The full FDHA will meet November 26, 2007, and come to a consensus on funding and governance solutions.

Members are hoping Fulton and/or DeKalb will agree to back the bridge loan so that Citigroup can issue the loan on or before December 31, 2007.

If neither county agrees to guarantee that loan, it is unclear if the FDHA can or will be able to make the loan happen.

“This institution has enormous strength and power,” Hollis said. “We cannot and will not let Grady close its doors.”

About the author:

Jonathan Springston is a Senior Staff Writer for The Atlanta Progressive News and may be reached at jonathan@atlantaprogressivenews.com

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