By Maria Saporta and Ellie Hensley
As published in the Atlanta Business Chronicle on Dec. 1, 2017
Thanks to a new $50 million gift from the Robert W. Woodruff Foundation, Grady Health System is within $10 million of reaching its $165 million goal to fund two capital projects that will enable the hospital to become more financially sustainable.
The $50 million is in addition to the $200 million the Woodruff Foundation gave 10 years ago when the public safety net hospital was in dire financial straits. That $200 million was the catalyst in a $325 million private fundraising effort that saved the hospital from going under.
John Haupert, CEO of the Grady Health System, said the new Woodruff gift “assures Grady’s sustainability going forward.”
The hospital has become a victim of its own success, because its operating rooms and patient facilities are at full capacity.
“Surgical procedures have gone from 9,000 cases a year to 14,000 cases,” Haupert said of the last decade.
The new Center for Advanced Surgical Services will allow Grady to increase the number of surgeries to between 19,000 and 20,000 a year. The center, which will cost about $141.7 million, will be built across from the main entrance to the hospital, and there will be a bridge on the third floor to connect the facility to the main hospital.
In August, the Fulton DeKalb Hospital Authority, Grady’s parent, closed on its purchase of the former Fulton County Health Department building, which will be razed to make way for the new center.
The second project, an expansion of Grady’s Ponce Center for HIV/AIDS, will cost $23 million.
“Ten years ago, Grady desperately needed the community’s support,” said Russ Hardin, president and CEO of the Woodruff Foundation, in an email. “By every measure, Grady has made good on the community’s investment.”
Hardin continued, “Ten years later, patient outcomes are improved, patient stays and wait times are shorter, beds are full, and the new emergency and trauma center is best in class. And in a very difficult health-care environment, Grady is balancing its budget and making necessary capital investments.”
Earlier this year, the Fulton County Commission unanimously approved $60 million in funding for the expansion, and the DeKalb County Commission approved $23 million.
The Grady Health Foundation has been busy raising the other half of the cost from foundations, individuals and other donors. In addition to the Woodruff gift, philanthropist Bernie Marcus and the Marcus Foundationhave given $5 million, the O. Wayne Rollins Foundation has provided $5 million and Gilead Sciences Inc. has given $2 million.
Several members of the Grady Health System board and the Grady Health Foundation also have made significant donations.
“We are about $10 million away from the $165 million goal,” said Renay Blumenthal, president and CEO of the Grady Health Foundation.
A.D. “Pete” Correll, who spearheaded the Save Grady movement, chaired the Grady Health System board for eight years. Correll is now chairing the foundation board, and he provided a historical context.
“Twenty-five years ago, Grady did a $400 million expansion, and 100 percent of that was funded by the counties,” Correll said. “Fast forward 15 years, Grady is in the toilet, can’t meet its payroll. There’s $325 million investment and zero county support that saves Grady. Ten more years, the counties stepped up and said, ‘we will fund half of this expansion.’ The taxpayers are coming back to support Grady. That’s the sea change.”
Compared to Grady’s situation a decade ago, Haupert said, “the crisis has passed.” But he added a caveat. “At the same time, as a large safety-net hospital… you are always one pen stroke away from what the state or federal government might do,” Haupert said.
Meanwhile, Grady has been shifting its model away from being an indigent care hospital to being a place insured patients select for treatment because of the quality of care.
“You look at the last 10 years since Pete [Correll] came, we have decreased the percentage of patients who are completely uninsured from 42 percent to 28 percent,” Haupert said.
Also, 10 years ago, only 10 percent of its patients were commercially insured. Today 20 percent are commercially insured. “That’s the best patient to have,” Haupert said.
Grady also is embarking on a major overhaul of its Ponce Center for HIV/AIDS, which Haupert said has not undergone any significant improvements since the hospital took over the building in the early 1990s.
Atlanta ranks No. 5 as a city in number of new HIV/AIDS diagnoses, and Georgia ranks No. 2 as a state. Gay black men make up the largest population of new diagnoses.
“The tragedy is young men come to Grady thinking they have pneumonia or a terrible cold,” Correll said. “They come into the ER thinking they’re sick but healthy, and an hour later they find out they have full-blown AIDS.”
The Ponce Center is one of the largest HIV/AIDS centers in the country, treating more than 6,000 cases a year. One out of every four cases in Georgia is treated at the center, and like Grady’s main campus, it is at capacity.
The project includes a build-out of the facility’s empty fifth and sixth floors and renovations to the rest of the building. This will enable Grady to treat more HIV/AIDS patients, and it will also help expand the capabilities of the Emory Center for AIDS Research, which conducts much of its work at the Ponce Center.
The architectural planning phase for both projects will take about a year, and Grady anticipates breaking ground on the new surgical center around September 2018. The center will be completed about two and a half years later, and renovations to the Ponce Center will likely take an additional six months.
Both Correll and Haupert said Grady stands out in the country for the kind of support it has received from the private sector.
“I know of no other big public safety-net hospital in America that has received the level of philanthropic support that Grady has,” Haupert said.
Correll said it was the Woodruff Foundation’s $200 million gift that gave credibility to the Save Grady movement 10 years ago, and the new $50 million contribution only reinforces that generosity.
“You can’t find a philanthropic entity that’s contributed a quarter of a billion dollars to a public safety-net hospital,” Correll said, adding that the new gift means Grady will be able to do its expansion.
“The Woodruff board deserves an ungodly amount of credit,” he said. “Their gift is as big as Bernie’s aquarium.”
Ellie Hensley covers the healthcare industry for the Atlanta Business Chronicle