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Senate measure would force Grady to go private

ATLANTA - If Grady Health System's board refuses to convert Georgia's largest public hospital into a private nonprofit, the state should force the management change, Sen. David Shafer said Thursday.

The Republican from Duluth announced plans to introduce legislation this winter mandating the privatization of Grady, a move supporters consider essential to putting the financially ailing hospital back on its feet.

A Metro Atlanta Chamber of Commerce task force has recommended privatizing Grady as a way to restore investor confidence in a hospital that has been bleeding red ink to the point that it is in danger of closing by the end of the year.

State political leaders, including Gov. Sonny Perdue, have said they'd be more likely to support the state coming to Grady's aid if the Fulton-DeKalb Hospital Authority - which now runs Grady as a public charge - switched to what they argue is a more efficient management model.

Shafer went further on Thursday, saying the change would help the General Assembly make an informed decision.

"It is impossible to determine whether or not a badly managed organization needs additional funds," he said. "You cannot make that determination, or even seriously consider the issue, until you fix the management structure."

Grady, which serves more indigent patients than any other hospital in Georgia, has been losing money since 2000, a trend that is getting worse as the system's charity care costs keep rising while its revenue from insured patients declines.

The chamber task force has warned that Grady could shut down by the end of the year without an infusion of about $120 million, a heavy burden for Fulton and DeKalb county taxpayers to shoulder alone.

If Grady closes, large numbers of indigent patients would be forced to seek care at other hospitals across the Atlanta region, driving up their costs.

The hospital also is a key training ground for Georgia medical students, and it has the state's only top-of-the-line trauma care center north of Macon.

Because of the potential regional and state impacts, elected officials in Fulton and DeKalb are calling for taxpayers from surrounding counties and even the entire state to help pay for the proposed bailout.

Supporters of removing responsibility for the day-to-day operation of Grady from its current politically appointed board argue that it's important to take politics out of the hospital's governance.

"The board of Grady must owe its allegiance to Grady, not to anyone else," Shafer said.

Under Shafer's resolution, the hospital authority would contract with a nonprofit corporation to manage Grady.

Members of the new corporation's board initially would be appointed by the governor, lieutenant governor, House speaker and the authority's board.

Later, however, the nonprofit's board members would be chosen by the board itself.

While some community activists have been organizing to oppose taking the reins at Grady out of the public domain, the idea has been gaining momentum.

The Fulton County Commission endorsed the proposal this week. DeKalb County commissioners haven't yet made a decision.

Lt. Gov. Casey Cagle, the Senate's presiding officer, said he supports Shafer's plan to mandate the change if it becomes necessary.

"It is our hope that this will occur without the state's interference," Cagle said in a prepared statement. "However, we stand ready and willing to move in that direction should the governance shift not happen."

Pam Stephenson, chairman of the hospital authority, could not be reached on Thursday.