GE: Grady downplays budget deficit

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Grady Health System has reported a $19.6 million loss for 2000, but officials say much of it was bookkeeping and the system has no plans to cut services or ask for additional funding.

Grady Memorial Hospital, the state's largest charity hospital, has struggled for years to fund its budget. Grady CEO Ed Renford said the hospital is continuing to work toward a balanced budget for 2001.

"I don't see this financial situation as a problem," Renford said.

In an audit presented to the board this week, the hospital system reported substantial losses. But Renford said some of the losses are just on paper.

Monica Murdock, the interim chief financial officer for the hospital system, said of the $19.6 million in losses in 2000, about $8 million was a write-off of debts the hospital does not believe it can collect. Another $6.7 million was earmarked for a fund to cover malpractice judgments. She said the accounting firm felt the hospital did not have enough reserves in the fund.

Renford said most of the remaining shortfall occurred because of critical shortages of nurses, pharmacists and medical technicians.

"We've been forced to use a great deal of agency labor, and agency labor is much more expensive than salaried labor," Renford said.

The shortfall also is somewhat balanced by a $20.3 million surplus the system posted in 1999. That money came from a one-time payment of $39.6 million in federal Indigent Care Trust Fund money, which represented reimbursement for several years worth of indigent care, Renford said. About 34 percent of the patients who use Grady's services don't pay.

Renford said the hospital is making changes to balance the 2001 budget and does not plan to ask for additional funding this year. The hospital has a $533 million budget for 2001.

Fulton and DeKalb counties are paying about $100 million to the hospital this year. The rest comes from state and federal funding, patient payments and grants, Murdock said.

Murdock said the hospital is looking at how to shorten inpatient stays, increase the collection of debts and attract more staff in a tight labor market.

Bill Loughery, a Grady board member from north Fulton, has been openly critical of the recent audit and the auditing company's refusal to share information with the board.

"I kept asking last year how we were doing and everyone kept saying we were fine, now I find out we're $12 million to $20 million in the hole," Loughery said. "So I don't have a ton of confidence that it'll be much better this year."

Loughery said the hospital needs to be supported by other counties, including Clayton, Carroll, Cobb and Gwinnett, which have a high number of residents who use Grady services. He said the board also refused to change purchasing procedures that reports have said would save the hospital $4 million to $5 million a year.

The Atlantic Journal-Constitution

-- Anonymous, July 28, 2001


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