Tuesday, April 8, 2008

Charity Care Hospital Saved - $200 Million Gift

Just two days ago we blogged about a hospital in the Chicago area that had to close.  Now from Georgia comes a New York Times story about another struggling hospital.  Grady Memorial Hospital in Atlanta, reported to be one of the country's largest charity hospitals, has been on the brink of financial failure.  Last year the hospital operated with a deficit of $48 million.  The hospital serves Medicaid and Medicare patients (40% of its patients) and uninsured patients (30%).  It provides the region's only Level 1 trauma center.

The Woodruff Foundation has announced a $200 million gift to the hospital, the largest gift ever to a public hospital.  Grady has been managed by the Fulton-DeKalb Hospital Authority, but management of the hospital has now been turned over to a new nonprofit organization.  Without the help from the Woodruff Foundation and a one-time appropriation from the Georgia legislature to support trauma care, the hospital would not be able to continue.  How it will manage going forward is still uncertain.  One hope is that the new nonprofit entity will provide more efficient management, but given that inpatients cost, on average, nearly two times the amount of the reimbursements the hospital receives, it's hard to imagine how the hospital will survive without continued support from foundations and government.



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