Privatized Grady Hospital Gets New CEO, Lowers Stephenson’s Pay

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(APN) ATLANTA — The private, nonprofit Grady Memorial Hospital Corporation (GMHC) voted to install a new CEO to oversee operations at Grady Memorial Hospital and also approved a settlement agreement with the current Interim CEO during a special called meeting on Monday, July 21, 2008.

The 17-member GMHC voted unanimously to make Michael A. Young, 52, currently head of Erie County Medical Center (ECMC) in Buffalo, New York, the new CEO of the financially troubled hospital.

As previously reported in Atlanta Progressive News, Young had been one of four finalists.

“This is a great day in Grady’s history, a day when we can stop looking backward and start looking forward,” A.D. “Pete” Correll, chairman of the GMHC, said Monday. “Grady has attracted a world-class leader with a nearly 30-year track record — 20 of them as CEO — for improving patient care while boosting revenues and admissions.”

While Young helped ECMC make financial strides, it is unclear, based only on an examination of his resume, what methods Young used to foster the improvements.

Young’s impressive track record and universal praise from colleagues and co-workers set him apart from the other finalists, Correll said.

“This is a pro and he will do a good job,” Correll said. “He’s one of the smartest people I’ve ever met.”

According to his resume, during his three and a half years as President and CEO of ECMC, Young has helped bring about many improvements.

ECMC experienced a 36-month net revenue growth of $100 million or 39 percent, grew cash to 115 days from zero days or $165 million in three years, and produced a first positive bottom line in the hospital’s 100-year history in 2006, the resume states.

During Young’s tenure, ECMC went from losing $30 million per year to posting a $17 million operating profit in 2007.

Young also helped improve service delivery. ECMC reduced emergency room delays from 80 percent in 2005 to just 7 percent in 2007, increased emergency room volumes by 17 percent over three years, and increased admissions 16 percent in a declining market, all of which led to an increase in market share from 2005 to 2007.

Members of the Grady Coalition, a group of Atlanta activists that has long opposed the privatization of the Grady Health System, expressed cautious optimism Monday about Young.

Rev. Timothy McDonald, Grady Coalition co-chairman and pastor of the First Iconium Baptist Church, said while the Grady Coalition was unable to meet with any of the four CEO finalists since the GMHC announced the finalists’ names two weeks ago, Young’s name “kind of stood out” among the others.

“Our goal is to work with the new CEO but we will not back down in our concerns,” McDonald said, which he said include preserving neighborhood clinics, Grady’s pharmacy, employees and pensions, and Grady’s mission of serving the poor and uninsured.

“Grady is beloved throughout this country for training some of the best doctors in America, and I’m honored to lead this turnaround,” Young said in a press release.

“It’s clear how much Grady means to this community and this state, and I look forward to working side-by-side with Grady’s doctors and staff — and the whole community — to provide the very best quality of care to our patients,” Young said.

Young is slated to take over September 1, 2008. Chairman Correll said Monday he wants to coordinate meetings between Young, the press, and the community so Young can state his goals and answer questions before he takes over. An official date and time for such an event has yet to be determined.

GMHC Approves Stephenson deal

The GMHC also unanimously approved an agreement between the GMHC and interim CEO Pam Stephenson. She will receive three months pay worth $150,000, in addition to the payments she’s already received, Correll said Monday.

The Atlanta Journal-Constitution newspaper (AJC) reported July 9 that Stephenson entered into a two-year, $600,000 per year contract with the Fulton-DeKalb Hospital Authority (FDHA) before that Board ceded power to the GMHC. The $1.2 million contract became effective January 28, 2008.

The FDHA made Stephenson Interim CEO in January 2008 after dismissing previous CEO Otis Story the same month.

The AJC stated the terms of that January contract stipulated if the GMHC replaced Stephenson within the first year, she would receive the remaining amount of money in the two-year contract. The AJC reported this could mean “a parting check of about $750,000 or more” should she leave in September, in addition to the paychecks she’s already received.

On July 10, the AJC quoted state and local officials who questioned the validity of the Stephenson-FDHA contract but also the need to give Stephenson such a large sum of money at a time when Grady is struggling to make financial ends meetThe agreement approved Monday will make Stephenson’s previous agreement with the FDHA null and void, Correll said.

Meanwhile, Stephenson’s staunchest supporters have chastised the AJC for running reports they say are unfair.

An Atlanta group called Concerned Citizens called for an AJC boycott in an e-mail obtained by APN on Sunday. Eight members of that group demonstrated with signs calling for a boycott of the AJC outside the downtown Loudermilk Center Monday where the CEO vote took place.

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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