Legislators debate best way to keep Grady afloat amid trouble

ATLANTA - The halls of the Georgia Capitol are abuzz with talk about the imminent financial collapse of the state's largest public hospital and how to rescue the struggling medical center before it chokes on its debt.

There are proposals among the state's ruling Republicans for an exhaustive audit of Grady Memorial Hospital's system. Lawmakers negotiate with Grady's contractors over ways to forgive or reduce the hospital's debt. And there's a push among GOP leaders to replace the government-appointed board that runs the hospital with a nonprofit private organization.

Republican lawmakers privately say there's little chance of a state bailout happening unless the hospital agrees to overhaul its management structure. That move is bitterly contested by Atlanta Democrats, who argue that a structural change will do little to rescue the hospital.

Grady administrators have warned the hospital could run out of money by the end of the year. The hospital is losing $8 million each month, partly because it caters to a largely poor and uninsured population and treats the city's most critically injured patients. Some 93 percent of its patients are not privately insured and 75 percent are on Medicaid.

That has left Grady with a $125 million debt in short-term capital improvements and a roughly $50 million annual funding deficit.

Grady has asked Fulton and DeKalb counties to back up a $100 million loan it hopes to obtain. It also has secured a $15 million one-time donation from Fulton County commissioners to help shore up its finances.

Republicans have insisted that Grady must change the hospital's management structure.

The push for a management change has enraged some Atlanta Democrats, who argue the state shouldn't meddle with a system that's largely funded by Fulton and DeKalb county taxpayers.

State Rep. Ben Harbin said the state must find a way "to do something different for Grady." That might mean finding a way to secure more Medicaid funding or reviving a stalled legislative plan to create a statewide trauma system, said Mr. Harbin.