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25 June 2007
Emory University Supports Greater Grady Task Force Report
Today's report from the Greater Grady Task Force is a major step in the right direction to save Grady Health System and drive its efforts to be a viable and thriving asset to the citizens of Atlanta and the State of Georgia, says Michael M.E. Johns, MD, CEO of the Woodruff Health Sciences Center at Emory University, executive vice president for health affairs at Emory and chairman of the board of Emory Healthcare.

"Emory commends the Task Force and its strong leadership and perseverance to help right the ship of Grady Memorial Hospital and steady it for a successful future," says Dr. Johns, who serves as an ex officio member of the Task Force. "With the recommendations released today, the Task Force leaders have presented strategy and tactics that will support the very real change needed to bring Grady into the 21st century and allow it to progress and prosper."

Grady Health System is one of the largest public health systems in the country, managing nearly one million patient visits a year. The medical staff of Grady Memorial Hospital is composed exclusively of doctors from the Emory University and Morehouse schools of medicine who work under contract with the Fulton-DeKalb Hospital Authority.

Formed by the Metro Chamber of Commerce at the request of the Hospital Authority, the Task Force has been working for 90 days to bring Atlanta leaders' business acumen to the table to assess current and future needs to ensure Grady's survival in the short term and viability for the future. Analysis by key experts in the health care industry, working with Grady over the past year, provided a thorough picture of the situation facing the health system and hospital.

"As President of Emory University, which has had an important relationship with Grady for most of the past century through the work of our School of Medicine, I applaud the task force for its thorough evaluation of Grady's situation and its frankness about Grady's currently unsustainable trajectory," said James W. Wagner. "At the same time, the Task Force has provided a virtual handbook for Grady's survival, if the community it serves has the courage and determination to bring about the needed restructuring and secure the necessary resources. We at Emory stand ready to work with all parties in the community to implement the Task Force's prescription and secure the future of a hospital that means so much to the health and safety of our entire region."

Recommended solutions by the Task Force include:

  • Restructure the legal entity and adjust governance by converting Grady to a 501(c)3 non-profit organization [as most hospital authorities in Georgia have already done]. This will allow Grady to enter into new and significant revenue streams and reimbursable services. This conversion would include board members with the necessary expertise to oversee an operation the size and complexity of Grady.
  • Restructure hospital operations in order to become a leading public health-care system in the US. This strategy includes immediately executing a targeted cost reduction and cash flow improvement effort that can be tracked, measured and reported. Operational and information technology problems must be addressed. This will require bringing to Grady an external group to augment the management of Grady in executing the needed operational strategies already recommended by consultants Alvarez and Marsal.
  • Address the short-term financial gap with bridge funding until a restructuring is complete in two to three years, turning to Fulton and DeKalb counties, as well as the State of Georgia, other regional counties, bank bridge loans, and any efficiencies that the Grady board can execute.
  • Address long-term financial solutions for operations with a combination of resources that includes obtaining funding for certain medical treatments or capacity for public health functions outside normal patient cost recovery. In addition, a cost-of-living or health care index will need to be applied to annual payments of Fulton, DeKalb and other governments. Institute a charge-back process for the net intake of charity and indigent patients from surrounding counties. Work with the State of Georgia to obtain the following: an increase in the state-funded medical school allowance for each resident to better compensate for the cost, funding to support a statewide trauma network and a review of the state's Disproportionate Share Fund allocation with other hospitals.
  • Address long-term financial solutions for capital to support facilities and equipment at Grady. Grady should seek innovative funding and partnering arrangements with its proposed new charter and non-profit status. Grady could issue new bonds to fund capital expenditures. A revenue stream must be identified to service the debt.

"The Emory University School of Medicine has a deep and historic commitment, along with Grady and Morehouse School of Medicine, to the well-being of Atlanta and this entire region," says Thomas J. Lawley, MD, dean of the Emory University School of Medicine. "The great virtue of this task force report is not only that it documents the urgency of the crisis, but also that it lays out specific steps that can create a brighter future for Grady and everyone who depends on Grady for health care."


Editor's Note:

For more information about the Greater Grady Task Force:

For complete background on the Emory-Grady relationship:

Emory's shared history with Grady Memorial Hospital traces its origins into the 19th century. The doctors in the Atlanta Medical College, the city's most established private medical school since 1854, had cared for patients at Grady ever since the hospital opened in downtown Atlanta in 1892. When Emory University moved from Oxford to Atlanta in 1915, the Atlanta Medical College asked if it could join the new University to become the Emory University School of Medicine. These new Emory faculty members would go on to establish many other healthcare components such as The Emory Clinic and the hospitals Emory owns, but they never abandoned their love for, and commitment to, Grady.

In the 1930s this arrangement was made more formal, with the understanding that the medical school would train doctors at Grady and that those young doctors would help with the growing number of patients seen there. Today, as then, the patient care at Grady would not be possible without those young physicians.

The agreement between the two institutions was made more formal in 1951, with the first contract between Emory and Grady, and thirty-three years later, in 1984, with the current contract. It has allowed Emory to provide excellent medical care to literally millions of patients over the years and excellent medical training to many thousands of young physicians. Approximately one of every four physicians now practicing in Georgia spent time in Grady through the Emory and Morehouse programs.

© Emory University 2018

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