Atlanta Public Hospital Receives $200M Donation, Signs Agreement To Transfer Control To Not-for-Profit Corporation

Main Category: Public Health
Article Date: 09 Apr 2008 - 5:00 PDT

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The Robert W. Woodruff Foundation will donate $200 million to the financially troubled Grady Memorial Hospital in Atlanta, one of the largest U.S. public hospitals in the nation, hospital officials announced on Monday, the New York Times reports. According to the Center on Philanthropy at Indiana University, the donation is the largest gift on record to a single public hospital (Dewan, New York Times, 4/8).

Earlier this year, the Times reported that Grady was facing a multimillion-dollar shortfall toward the cost of charity and emergency care and that county, state and federal officials had not been willing to cover the deficit (Kaiser Health Disparities Report, 1/8). At the end of 2007, Grady had a $48 million deficit, with the cost of inpatient care being on average almost two times the amount of reimbursement, according to the Times. The hospital has been "squeezed by trends like the increasing cost of medical care, the increasing number of uninsured patients and flat or declining government spending on health care," the Times reports. In addition, the hospital is battling to retain its accreditation after a review in November 2007 (New York Times, 4/8).

On Monday, Grady leaders signed an agreement to transfer control of the hospital to a new not-for-profit corporation, a plan that is "expected to draw millions in additional funding from numerous sources," the Atlanta Journal-Constitution reports (Schneider, Atlanta Journal-Constitution, 4/7). According to the Times, the Woodruff donation "is a major component" of the reorganization plan. However, the Georgia Legislature last week ended its session without approving legislation that would have funded improvements in trauma care, the second component of the bailout plan. Trauma care is one of the biggest financial losses at Grady, which houses the region's only Level 1 trauma center.

The Legislature approved a one-time allocation of $58 million to trauma care, of which $24 million will go to Grady. Lawmakers also approved increases in Medicaid reimbursement rates and medical education grants (New York Times, 4/8). Pam Stephenson, chair of the hospital board, said the agreement approved Monday will not become final until the state provides specific assurance of its plans to fund Grady in the 2008 and 2009 budgets. Bert Brantley, a spokesperson for Gov. Sonny Perdue (R), said the state will provide a financial breakdown once the governor signs the 2009 budget, which could be as late as mid-May (Atlanta Journal-Constitution, 4/7).

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