a public hospital comes undone

Let me just summarize the situation: Grady Memorial Hospital in Atlanta is going to run out of cash in a couple of weeks. How did this happen? Grady is your typical public hospital, having served the poor and indigent of metro Atlanta for more than a hundred years. But their charity care load has risen swiftly in the last few years, as has happened everywhere, and the hospital finds itself two paychecks from shutdown in spite of this year’s $120 million infusion from local government.

Grady owes its two affiliate medical schools $63 million dollars and has gotten so deeply in debt that no one will lend it money anymore, at least the way it’s presently operated. So last week the hospital board voted to transform the hospital from a political entity into a 501(c)3 non-profit corporation. Frankly, there was no other choice; many public hospitals have done the same in recent decades.

The new structure will allow Grady to start raising the $500 million it needs to stay operational, and this means the place stays open, for now, for the hundreds of thousands of Southeasterners who depend on Grady for health and life. What the transformation also means is that the hospital will need to focus on making some money.

It’s been a long time in coming, in some ways. The hospital’s sloppy billing practices have cost millions in lost revenue, a problem that’s ultimately passed along to local taxpayers. The hospital will need to take advantage of federal funds for physician training — Grady cranks out a quarter of all doctors in Georgia — and will have to develop profitable partnerships with other charitable organizations.

But more than anything else, Grady will need to attract patients who can pay. No one likes to talk about making money in health care, because it doesn’t sound caring. But public hospitals can’t survive without these conversations, because there are now so many uninsured, and because medical care now costs so much. So some of these hospitals are now working to attract paying patients by offering deluxe suites and concierge service for select patients. Sometimes it can mean that a lucrative surgery takes precedence over a case of alcohol withdrawal. When you need to make money, it can be challenging to deliver truly equal service.

Harborview Medical Center, Seattle’s public hospital, has worked hard to balance a mission to care for the poor with its need to remain financially solvent, and things can be pretty raw when the two collide. That’s the story in House of Hope and Fear, and a story that every public hospital must contend with these days. For more on the crisis at Grady Memorial Hospital, check Public Broadcasting Atlanta’s recent series.

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