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OUT OF THE SHADOWS: 
Grady Memorial Hospital has rebounded from dire straits, but the coast isn’t clear in 2013.

Joeff Davis

OUT OF THE SHADOWS: Grady Memorial Hospital has rebounded from dire straits, but the coast isn’t clear in 2013.

This is the final entry in a three part series on the past, present, and future of Grady Memorial Hospital.

In 2011, more than 600,000 patients visited the Grady Health System. Across the Atlanta superstructure's 16 floors and the institution's six neighborhood health centers, 5,300 doctors, nurses, and staff members do everything from refill prescriptions to resuscitate lives. With more than 950 beds, Grady is the state's largest hospital. For Fulton and DeKalb counties' uninsured residents, the safety-net facility isn't simply a mammoth infirmary — it's a lifeline.

Six years ago, Grady nearly closed its doors. Although the 121-year-old hospital has experienced a recent turnaround, it's not out of the woods yet. For this three-part series, CL spoke with more than 50 doctors, patients, administrators, politicians, advocates, and others to learn about the fall, rise, and uncertain future of one of Atlanta's most important institutions.


Grady CEO John Haupert's office overlooks Jesse Hill Jr. Drive, a bustling four-lane artery that runs through the heart of the hospital's campus. Ambulances zip toward the emergency room on the street below his second-floor suite. Haupert sits at a polished wood conference table and speaks with cautious optimism about Grady's future.

The public hospital is projecting a $20 million profit for 2012 — a far cry from the $60 million debt facing the health care institution just five years ago. Haupert says he's committed to sustaining Grady's mission to care for the poor. But the financial reality of doing so more than 120 years after the hospital's founding is becoming increasingly difficult, despite the institution's recent shift into the black.

"Health care organizations have to be more careful going forward," he says. "Part of health care fixing itself, particularly public health care, is that regardless of the future, we know there will be less federal, state, and local support for funding health care."

The problems Grady faces — costly medical bills, exorbitant pharmaceutical profit margins, rising equipment costs — are shared by public hospitals throughout the nation. One in six Americans is uninsured; in Georgia, it's one in five. Those unable to afford prescription drugs tend to bypass preventive care. As a result, poor patients often wait until the last minute to seek treatment. Safety-net hospitals provide help to those that need urgent care, and it's expensive.

Grady again finds itself at a turning point that could make or break it, with its fate primarily in the hands of policymakers at the county, state, and federal levels. Earlier this year, state lawmakers approved the "bed tax," thanks in part to some semantic sleight of hand. The tariff on hospitals' net profits garners Georgia federal funding that is redistributed to the hospitals. Axing the state's bed tax would have meant a nearly $700 million shortfall in Georgia's Medicaid program and forced lawmakers to make cuts to the state's budget.

Republican leaders gave the tax alternative names such as "Medicaid assessment fee" and "provider fee." Gov. Nathan Deal even created a situation in which state lawmakers didn't have to vote directly on a tax hike. Instead, they passed a measure that gave the Department of Community Health the authority to extend the provider fee. In doing so, state Rep. Sharon Cooper, R-Marietta, says Deal "helped the medicine go down a little better" on what might have been an unpopular vote. In the end, the bed-tax renewal prevented Grady from losing $36 million in funding.

Still, more than $100 million remains up in the air, between Deal's obstinate resistance to statewide Medicaid expansion under the Affordable Care Act and the expiration of the Fulton-DeKalb Hospital Authority's long-standing contract with Grady.

"A signature on a piece of paper in Washington or under the [Gold] Dome can completely knock you off course," Haupert says.

In addition to dealing with concerns about whether Grady can pay its bills, Haupert is also working to rebrand and expand the medical facility to attract more paying patients. Today, the hospital, which had a 2011 operating budget of $898 million, goes beyond serving the indigent to offer specialty treatments unavailable at other hospitals. It also trains 25 percent of the state's medical professionals. It is the backbone of Georgia's health care industry.

"Grady is essential not only to Atlanta but the region. When you look at its trauma capabilities, they're unmatched in the [state of Georgia]," says Atlanta Mayor Kasim Reed. When asked if he'll be there if Grady needs help, Reed responds, "No question."

As major funding issues again rear their heads, the question isn't whether Grady will remain open, but if it can continue to fully care for the indigent. Haupert has plans to make Grady the nation's "leading public academic health system," but they'll require political and financial support. Whether he can garner both this year will determine whether Grady thrives or merely survives.

When president Barack Obama signed the controversial Affordable Care Act (ACA) into law in March 2010, the statute enacted sweeping reforms to the United States health care system. It was the largest American health care overhaul since President Lyndon B. Johnson created Medicaid and Medicare in 1965.

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