Board To Determine Fate Of Historically Black Atlanta Hospital's Governance

Main Category: Public Health
Article Date: 27 Nov 2007 - 5:00 PDT

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The board of the historically black, Atlanta-based Grady Memorial Hospital on Monday is set to vote on whether to cede operational control to a private, not-for-profit corporation, the Los Angeles Times reports.

The hospital, which opened in 1892, is one of the largest public health systems in the U.S., treating 900,000 patients annually, 90% of whom are uninsured, according to the Times. Grady expects its budget deficit for 2007 to reach $50 million. It also needs about $250 million to update equipment, laboratories and operating rooms. Like many urban hospitals, Grady has been affected by rising health costs, uninsured patients, and decreases in state and federal funding, the Times reports. If the hospital closes, metropolitan Atlanta would lose its only Level 1 trauma unit.

A.D. "Pete" Correll, co-chair of the Metro Atlanta Chamber of Commerce's Grady Task Force, said that changing the hospital's governing board from being politically appointed to a not-for-profit 501(c)3 model would allow for the appointment of members with financial expertise, as well as give members more flexibility to create profit-making enterprises. In addition, a private board could focus on increasing the number of patients who have health insurance, Correll said.

He added, "The issue is money. We have a major indigent-health care hospital that is going to fail if someone doesn't do something quick. ... People are saying they would like to help, but they would like a say in the hospital's governance. That's not unreasonable." According to Correll, philanthropic groups have pledged $200 million in aid for the hospital if the board votes to transfer control to the not-for-profit governing panel (Jarvie, Los Angeles Times, 11/26).

If the plan is approved, the original Grady board would remain in place and would represent continued public ownership of the hospital, the Atlanta Journal-Constitution reports. The board would receive periodic reports from the new, private board.

Support
According to the Journal-Constitution, only one board member has spoken out against the plan, though some board members' support "is softer than others, and some said they might change their minds depending on final discussions or the last-minute details."

Chris Edwards, vice chair of the Grady board and a supporter of the plan to transfer governance to a private group, said, "I fully expect this to pass," adding, "It is clearly the best opportunity now to save the hospital."

Georgia Lt. Gov. Casey Cagle (R) has said that if the board does not vote to make the change, he will ask the state Legislature to pass a measure that would impose the not-for-profit governing panel by law.

The heads of the Emory University School of Medicine and the Morehouse School of Medicine -- which provide nearly all the doctors for Grady -- have said that unless the board makes the change, they will send some doctors to other hospitals (Atlanta Journal-Constitution, 11/26).

Opposition
Some officials and community members have said that privatizing the hospital's governing board would "compromise Grady's historic commitment to the poor -- and shift control from a predominately African-American board to one that would probably be predominately white," according to the Times.

Georgia Sen. Vincent Fort (D) said, "This is a hospital takeover by a Chamber of Commerce, by the city's white power structure. Frankly, I don't trust the people who are pushing for Grady to privatize to do the right things for poor folk." He added, "No one is saying this change is necessary because of mismanagement, corruption or malfeasance. And no one is really explaining why a change in leadership will lead to more money" (Los Angeles Times, 11/26).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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