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Political tug of war threatens Grady

ATLANTA - The local politicians running Grady Memorial Hospital say they're making a good-faith effort to save Georgia's largest public hospital from bankruptcy.

Commissioners in Fulton and DeKalb counties have put up $15 million and $5 million, respectively, in emergency funding.

And the hospital's governing board has agreed to study whether Grady's management should be turned over to a nonprofit, as recommended by a task force of business leaders.

As far as they're concerned, it's the state's turn to step up.

But Republican leaders in the General Assembly say they want to see more than one-shot infusions of cash or a study before they kick in state money to rescue Grady.

The impasse resulting from those conflicting expectations threatens to shut down a hospital with impact far beyond its downtown Atlanta environs.

"If Grady were to close, it would literally destroy our health care service delivery system in metro Atlanta," said Tom Bell, co-chairman of the task force that suggested the management overhaul for Grady. "We've got to do something about it."

Grady's fiscal woes aren't new. The hospital has been losing money since 2000, as the rising cost of treating its mostly indigent patients - many from Gwinnett and other neighboring counties - outstrips Grady's financial support.

It's the same problem faced by 45 other Georgia hospitals that treat a high percentage of poor and uninsured patients.

But Grady's symptoms are more severe because its load of non-paying patients is even higher than the others.

"When the other hospitals have a cold, Grady has pneumonia and is on life support," said Sen. Nan Orrock, D-Atlanta.

The chamber task force found that in order to survive, Grady needs a one-time allocation of about $120 million, plus $50 million to $60 million each year.

Rep. Bob Holmes, D-Atlanta, chairman of the Fulton County legislative delegation, said that's far too great a burden for Fulton and DeKalb counties.

Holmes is calling for Grady to become a permanent line item in the state budget. He and others argue that the hospital is vital not just to metro Atlanta but to all of Georgia.

Grady has one of only two burn centers in the state and the only poison center. The hospital serves as the training ground for medical students attending Emory University and the Morehouse School of Medicine.

But instead of boosting state aid to Grady, Holmes said the state reduced the hospital's funding this year by $32 million.

"They're cutting the money and then blaming them for the horrible deficit," he said.

But Sen. David Shafer, R-Duluth, said the legislature will not bail out Grady until lawmakers get assurances that the hospital has gotten its financial house in order.

Part of that assurance could come from an upcoming audit of Grady's finances, including a decades-old contract with Emory that has come under fire in recent weeks.

"We don't want to pour in good money after bad," said Shafer, who has introduced legislation to force the hospital to convert to a nonprofit. "Grady has to fix its governance before they can be trusted with more money."

If and when the state does step in, Shafer said it won't be to help just Grady but other hospitals facing cash-flow problems.

"There's a role for the state in making sure that Grady does not close," he said. "But it's in the larger context of making sure there are safety net hospitals across the state."

Toward that end, the state Department of Community Health's 2009 budget request would increase Medicaid reimbursements to hospitals with trauma units, including Grady.

Also, legislative leaders support funding the statewide trauma care network the General Assembly created this year but left with no money.

Despite the strong words issuing from both sides, Sen. David Adelman, D-Decatur, said he's optimistic that help for Grady is on the way.

Adelman, whose Senate Urban Affairs Committee has been working on the issue, said the stakes simply are too high for the counties, the state and the metro region's philanthropic community not to come through.

"I believe cooler heads will prevail," he said. "I don't think we're going to sacrifice Grady at the political altar."