What does the proposed bill do?
The bill amends Georgia’s Hospital Authorities Law to provide that hospital authorities composed of one or more counties and operating a hospital with more than 800 beds be required to contract with a nonprofit corporation for day-to-day management of that hospital and any other facilities under its control. The bill provides for formation of the nonprofit hospital management corporation and adopts standards of governance, including conflict-of-interest provisions.
How would this bill impact Grady Hospital?
It would require the Fulton-DeKalb Hospital Authority to contract with a nonprofit corporation to manage Grady Hospital. The nonprofit governance model is widely praised as the most efficient and effective way to operate a large urban hospital. Every other county hospital authority in the metro Atlanta area has already contracted with a nonprofit hospital management corporation without having been forced into doing so.
Does this bill eliminate the Fulton-DeKalb Hospital Authority?
No, the authority would continue to exist. The bill would simply require the authority to contract with a nonprofit corporation to manage Grady Hospital.
What are the benefits of a nonprofit hospital management corporation?
Nonprofit hospital management corporations have additional flexibility under the law in operating public hospitals. They also offer a degree of protection from political interference. In the case of Grady Hospital, it is hoped that a nonprofit corporation will allow the hospital to be reorganized without political interference, to implement cost saving recommendation and other needed reforms, and to restore confidence in the management of the hospital.
How would the new nonprofit hospital management corporation work?
Initials members of the corporation would be chosen by the Fulton-DeKalb Hospital Authority, the Governor, the Lieutenant Governor and the Speaker of the House of Representatives. The bill provides for a mix of backgrounds, including experts in budget analysis and corporate restructuring, as well as taxpayer and patient advocates and representatives of physician and non physician employees. Subsequent members would be chosen by the board itself, insulating it from political pressure.
Other than the physician and non physician employee members, anyone with a direct or indirect financial tie to Grady Hospital would be prevented from serving on the board.
Does this bill provide state funding to Grady Hospital?
Should creation of the nonprofit hospital management corporation be tied to state funding?
No. In the words of the bill’s sponsor, Senator David Shafer (R-Duluth), “Good governance is a necessary first step, not be a ‘bargaining chip’ for state funding.”
If creation of the nonprofit hospital management corporation is only a “first step,” what happens next?
It is hoped that the nonprofit corporation would immediately implement the cost savings recommendations of the management consulting firm retained by the Fulton-DeKalb Hospital Authority and to implement other reforms urged by the Metro Atlanta Chamber of Commerce’s Grady Task Force.
Will state funding ultimately be necessary as part of a comprehensive solution to the problems at Grady Hospital?
The Governor recently announced increases in the Medicaid reimbursement rates for hospitals participating in the state’s trauma network. As Grady Hospital is a level one trauma center, these increased reimbursement rates offer immediate relief.
It is too early to tell what role, if any, additional state funding might play in solving the problems at Grady Hospital. Any support from the state, however, is likely to take the form of funding the statewide trauma network, not a special subsidy or bail out.
What other sources of funding are available?
Immediate relief can be obtained by implementing cost savings recommendations by the management firm retained by the Fulton-DeKalb Hospital Authority and other reforms urged by the Metro Atlanta Chamber of Commerce’s Grady Task Force.
On the longer term, Atlanta business leaders have publicly suggested that new governance for the hospital could create opportunities for grants, contributions and loans.
Another idea being investigated by Senator Shafer is a change to the 911 law allowing local governments to use a portion of the existing 911 fee for the support of public hospitals offering trauma services.
What about additional funding from Fulton County?
In many ways, subsidies from Fulton County, borne disproportionately by the property taxpayers of North Fulton, have served to delay needed reform of Grady Hospital’s operations.
Now that Fulton County has been fully incorporated, the Fulton County Board of Commissioners should finding ways to reduce expenses and lower property taxes. As part of this downsizing, it may be possible to redirect current some of the $42 million that Fulton County annually spends for “public health programs” to Grady Hospital.
No one has suggested a tax increase on Fulton County property owners, and such an increase should not be considered.