Guaranteed Healthcare

After operating nearly a century as a public safety net, Grady Health System, one of the nation's largest public health systems which includes the largest hospital in Georgia, was privatized this May. Rita Valenti, a Grady RN and NNOC member, explains in her story, which was first published in the June issue of Registered Nurse, how corporate interests swooped in on an institution that has been systematically starved of the funds needed to care for the lowest-income Georgians. What happened to Grady stands in stark contrast to the Cook County Bureau of Health Services in Chicago, whose nurses are represented by CNA/NNOC. There, the RNs and allies, through their collective power and influence, successfully lobbied for more independent oversight of the system without relinquishing public control and the public mission.

By Rita Valenti, RN 

After more than a century as a county hospital and one of the country’s last, large public health institutions, Grady Memorial Hospital in Atlanta, Ga. was privatized in May. Previously, citizens of DeKalb and Fulton counties could at least, in theory, hold the hospital authority accountable through the elected county commissioners, who appointed its members. Now the operations of a safety-net hospital upon which millions of greater Atlanta residents depend each year will be overseen by a private, nonprofit board that chooses its own members and conducts its business beyond the public eye.

To observers who believe that healthcare is a basic right and support public efforts to provide it – people like me, a 21-year Grady registered nurse – the battle to save Grady as a public hospital was doomed before it began. Though it had managed to survive for 116 years, Grady in recent years became so financially vulnerable as a direct result of our failed healthcare system that powerful, private, neo-liberal influences grabbed their chance to swoop in and seize it for themselves.

Though Grady remains open and serving the same population for now, the track record for large public hospitals is not promising. Los Angeles County’s King-Drew Hospital, New Orleans’ Charity Hospital, Philadelphia General, DC General, and others have all been swept away in the past few decades. Grady’s future is tenuous at best. 

What the lesson of Grady shows us is that though this particular fight has been lost, the war to secure a lasting solution for equal, quality access to healthcare for all can no longer be waged as if it were a vision for the future. The future is now, and if we are ever to fulfill the caring mission of great institutions like Grady, the solution must be single-payer national healthcare for all.
 
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Grady’s very existence was premised on the economic and social inequality of our healthcare system. It was founded in 1892 to provide healthcare for low-income families in Atlanta and today largely serves as a “safety-net” hospital for the uninsured and underinsured.

Segregated from inception, the second large expansion of Grady in 1954 built 21 floors with 1,100 beds and 17 operating rooms in the form of an “H,” with one wing for black patients and the other for white. Even though the wings were technically one building, they were dubbed “the Gradys,” an expression that lasts to this day. Grady once housed two nursing schools, one white and one black. It was not until 1964, at the height of the Civil Rights movement, that the schools merged. Those same student nurses desegregated the “H” by moving the beds of all male patients to one wing and female patients to the other in that same year.

Nurses working at Grady are of the same mold as nurses with Cook County of Chicago, Parkland of Texas, or any other small handful of tough, “doing-more-with-less” healthcare providers at the dwindling numbers of legendary public county or municipal hospitals across the country. 

Emory University began using Grady as a teaching hospital in 1915 after it acquired the Atlanta Medical College located near “the Gradys.” Morehouse School of Medicine also affiliated with Grady in 1975. Today, the hospital is almost entirely staffed by interns, residents, and faculty from those medical schools.

The city of Atlanta’s ownership of the hospital ended in 1941 when the Georgia State Legislature created the Fulton-Dekalb Hospital Authority, the two counties that the city of Atlanta straddles. The FDHA became financially and operationally the hospital’s governmental owner. Grady’s governing board was appointed by the elected Fulton and DeKalb county commissioners and thus publicly accountable, even if reluctantly. 

By the 20th century, Grady was the largest public hospital-based system in the Southeast. It is the only Level 1 trauma and burn center in more than a 100-mile radius. It has a network of 10 neighborhood clinics, the largest and critically acclaimed infectious disease clinic in the east (founded by a nurse practioner), a nursing home, international clinic, and literally hundreds of specialties. Grady houses the state’s only poison control center. Its emergency room is the busiest in the region and its ambulances make more than half a million runs a year. More than 5,000 people work at Grady caring for over 30,000 inpatients annually and an outpatient population of roughly one million.

Though it is so clearly central to greater Atlanta’s, and even the entire state’s, healthcare network, Grady Health System, as it became known in recent years, has always struggled to stay afloat financially. While the numbers of uninsured in Georgia have doubled over the last decade to more than 1.7 million people, funding from Fulton and DeKalb, the two counties responsible for Grady, has remained flat for the last 10 years. The Georgia State Legislature has never wanted to play a role in funding Grady, which is designated as a county hospital but in practice serves millions throughout the entire southeast region. 

The spring and summer of 2007 produced the perfect conditions for shipwrecking Grady. The hospital had been running at a deficit for a few years, to the tune of about $55 million in 2007. Highly contested charges were also made that Grady owed the medical schools around $72 million, the bulk to Emory, for the work of their doctors. Earlier, the Georgia State Legislature had forced Medicaid patients into a series of private, Medicaid-funded HMOs. Predictably, Medicaid reimbursements to Grady declined by more than 15 percent. Medicaid covers about one-third of Grady’s patients but accounts for nearly 80 percent of its revenue. Another third are uninsured. Fewer than 8 percent of Grady’s patients have commercial insurance. The rest are mostly Medicare insured.

As stated, county funding had not increased in a decade. State grants to Grady from the Indigent Care Trust Fund’s Disproportionate Share Program and the statewide trauma network had been reduced by about $60 million, while costs for uncompensated care had increased by $73 million. The stage was set.

Rumors and accusations of mismanagement by the Fulton-DeKalb Hospital Authority, Grady’s governing body composed of largely African-American members, had been widely circulated for years and couched in not-so-subtle racial overtones. What happened last spring showed how class interests dominated the process while manifesting in real racial inequality.

In March 2007, one of numerous studies by a high-priced hospital consulting firm declared that Grady was on the verge of bankruptcy and could indeed close. A day after the report was released, the Metro Atlanta Chamber of Commerce announced its formation of a “Greater Grady Task Force.”

The task force member roster reads like a who’s who of Atlanta and Georgia’s captains of industry. It included Pete Correll, former CEO of pulp and paper giant Georgia-Pacific and a then-member of Emory’s Medical Advisory Board. Correll also just formed a new private equity investment firm with one of its focuses being the health industry. Then there’s Tom Bell of Cousins Properties, a company which owns interest in a major medical office building of Emory University’s Crawford Long Hospital. Crawford Long is located just a few miles from Grady and is generally known to siphon off paying patients and dump indigent and poorly insured patients on Grady. H.J Russell, a prominent African-American businessman, was also on the Chamber’s task force. His company, Russell Construction, was contracted by the hospital authority to build Grady’s last expansion, completed in 2002 and financed with $200 million in bonds from DeKalb and Fulton counties.  Another task force member was Joe Rogers, CEO of the Waffle House restaurant chain, a major Republican Party donor, and chair of the Board of Trustees of Children’s Health Care of Atlanta, a private nonprofit spin-off of Grady’s formerly public Hughes Spalding Children’s Hospital.

The task force quickly recommended that control of the hospital be handed over to a new private, nonprofit corporation. The new corporation would lease Grady from the hospital authority and have control over its budget, policies, managers, and all day-to-day operations. The task force argued that, to successfully run Grady in the black, hospital management needed a clean break from “interfering” politicians and that it would be able to raise much more financial support as a separate nonprofit, even though Grady already had an affiliated nonprofit foundation committed to raising private funds to help the hospital. As incentive to change the governing structure, the Robert W. Woodruff Foundation, endowed by Coca-Cola’s longtime president, dangled out a pledge of $200 million over four years. 

Fulton and DeKalb county commissioners, perpetually stuck in the difficult position of running a hospital with too-little funding, were more than willing to hand off responsibility to a private entity. 

Private and public universities also played a leading role in pushing to turn over control of Grady. Emory University, with huge endowments from the Woodruff Foundation, had little to lose if Grady privatized. Emory has three other major and, in some instances, competitive teaching hospitals under its control, and is seeking reimbursement from Grady to the tune of around $50 million for providing faculty staff for Grady interns and residents. Morehouse School of Medicine, a historic black college, may indeed have something to lose if Grady were to close because it is its only teaching hospital. However, Morehouse sided with Emory in the drive to privatize Grady and also seeks millions in reimbursement for its staffing of Grady. There’s also Georgia State University, which initiated a huge expansion several years ago. Having gobbled up nearly all the available land in its proximity, it may now be turning its eye to the mammoth Grady campus, which shares a border with one of its recent property acquisitions. The mastermind of this expansion was Carl Patton, former dean of Georgia State University and now the newest appointee to the Fulton Dekalb Hospital Authority. 

Quasi-public entities also sided with private corporate interests. Renee Glover, the chair of the Atlanta Housing Authority, was also a member of the Greater Grady Task Force. Under her watch, the city of Atlanta has bulldozed almost all of its public housing, including Grady Homes, a complex that once stood in the shadow of the hospital. The vacant fields where public housing used to be located now display huge signs announcing the construction of “luxury apartments and condominiums starting at $250,000 and up!” The Atlanta Journal-Constitution newspaper, owned and operated by Cox Enterprises, became the unrelenting voice of the Chamber’s task force. 

Hospital officers had long pleaded with the state of Georgia to provide more financial support since Grady cared for such a high proportion of the state’s trauma patients. The Legislature, now dominated by Republicans, refused to contribute any funds to the existing board, only to a new privatized board.

From prime real estate, to biogenetic research, from money owed to money to be made, from public (and regressive) taxes to private investment, from the “Grady” way to the “Atlanta” way, the region’s corporate, government, educational, and media interests are closely interwoven. One thing was clear: Atlanta’s elite viewed the public governance of Grady as an obstacle to its vision for an upscale and gentrified city and region. 

These forces that are both white and African American, public and private, represent a new class interest that takes historically public institutions, places them under their control, and displaces and abandons the very people – disproportionately people of color and those permanently separated from the work force by electronic production or global outsourcing – that these institutions were intended to serve.

The plans of metro Atlanta’s elite did not unfold without resistance. A very small but dedicated force of Grady union members, community activists, religious figures, and a few elected officials in a loosely knit group known as the Grady Coalition challenged the plan to privatize Grady. The two sides skirmished at many town hall meetings, county commission hearings, hospital authority boardrooms, public meetings, pickets, and rallies. Indeed, without that fight, few would have been aware of the transfer of public wealth that was about to occur. But unlike the strong union presence of registered nurses in Chicago’s Cook County that was able to stave off total collapse, Georgia law prohibits collective bargaining of public employees. Those who join unions become members, but don’t receive the protection or advantages of a contract. Without strong organization, registered nurses lacked a forum to discuss and respond effectively to the implications of privatization for the hospital and its workers. The potential of the new private corporation to cut services to the indigent is very real. As patient advocates, RNs will need to examine future proposals closely and weigh in heavily against cuts in care or to an already strapped workforce. 

Ultimately, the Grady Coalition was not able to stop the corporate interests’ relentless drive to shift control of the hospital to the Grady Memorial Hospital Corporation. The two counties voted in February to approve the transfer.

On May 20, the corporation began a 40-year lease to run Grady. Though the Fulton-DeKalb Hospital Authority still owns the land and is supposed to continue broad oversight of Grady, for all practical purposes the corporation is in charge.  

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The new corporate board of Grady has promised to raise private funds to bail out the hospital. It is unlikely that this will provide a long-range solution. Interestingly, an October 2007 article published in the Atlanta Journal-Constitution comparing the outcome of four southeastern hospitals that recently privatized as nonprofits found that the change did little to improve their financial health. These hospitals still face major annual deficits due to treating high numbers of uninsured, and reduced federal funding and reimbursements.

What privatization of Grady does set the stage for is the potential subcontracting out and outright closure of many services, and the resulting losses in jobs and benefits. As just one small example, the lease now reads that Grady employees’ defined-benefit pension plan will be discontinued.

The primary care neighborhood clinics, which Emory medical school a few years earlier had already refused to staff and which is one of the few places where undocumented workers can receive healthcare, are also likely on the chopping block.

And the insurance funding situation probably will not improve. The Georgia State Legislature has passed legislation that undermines any regulatory role for government in healthcare. Other bills promote the individual purchasing of high-deductible private health insurance policies or so-called “health savings accounts” that are invested in the stock market. Instead of healthcare being cemented as a necessary part of a society’s infrastructure, these neoliberal policies only serve to shift the burden of healthcare costs onto individuals and increase our healthcare insecurities.

The demise of Grady Health System as a public hospital is the result of a collapsed system of healthcare financing. To strategically sustain Grady as a public institution would have required equal, quality public health insurance for all. Single-payer national health insurance would do it. Grady and a handful of other public hospitals existed because of an inequitable system of healthcare. Now their future depends on a transformation of the healthcare system. The struggle to save Grady is not just about one institution having adequate funding; it is about a vision of what healthcare could be for everyone. Time is running out.