Grady chief fears effects of funding loss

Print Friendly and PDF By: Andy Miller Published: Oct 29, 2013

The financial arithmetic from the Affordable Care Act could inadvertently undermine the safety net in Georgia, the CEO of Grady Health System said Tuesday.

Grady’s chief executive, John Haupert, pointed to the health reform law’s removal of federal funding that hospitals receive for treating a large share of low-income  patients.

Grady Memorial Hospital, the major safety-net facility in greater Atlanta, would eventually take a $45 million annual hit from that funding reduction. That could lead Grady to cut services such as mental health, Haupert told a Midtown Atlanta Rotary Club audience.

Grady Memorial Hospital

Grady Memorial Hospital

The health law was written in such a way that hospitals could offset the loss of the “disproportionate share hospital’’ (DSH) money by getting thousands of newly insured patients from Medicaid expansion. This was supposed to happen nationwide.

But when the U.S. Supreme Court upheld the health reform law, it also weakened the law’s Medicaid provision, ruling that states had the right to opt out of expansion. Since then, half the states, including Georgia, have decided against adding more low-income adults to their Medicaid programs.

Grady is the second-biggest provider of mental health services in the state, behind the prison system, Haupert said Tuesday.

“We can’t be all things to all people,’’ he said. “We don’t have to be in the mental health business, [but] we need to be in the mental health business.’’

Grady has joined with other hospitals — especially those in other non-expansion states — in trying to stop the erosion of this funding. Georgia’s political leadership and congressional delegation support this effort, Haupert said.

The loss of DSH funds could mean the closure of 15 rural hospitals in Georgia, Haupert said. “I don’t think anyone in Congress or the General Assembly wants that on their hands.’’

The ACA’s goal is to expand access to care, Haupert noted. “It may have the reverse effect’’ with the cut in funding, he said.

“I don’t think anyone wants to see the safety net fall apart,’’ he said, adding that he hopes that Congress and the administration can come together to fix the problem.

President Obama and others have attempted to delay the DSH payment cuts until 2015. Rep. John Lewis (D-Ga.) has proposed a bill to postpone the payment cuts, but Congress has not taken action on the legislation.

Haupert also emphasized to the Rotary audience Tuesday that Grady patients “would be better off’’ if the state decided to expand Medicaid.

If Georgia were to do so, Haupert said, Grady has estimated that it would gain $25 million in additional revenue.

He also noted that the health system has come a long way in the past five years after it restructured financially.

Five years ago, Haupert said, Grady was in danger of closing, having trouble making payroll and paying its bills. Now, thanks to major foundation investments and improved finances, Grady is offering new state-of-the-art services, such as the Marcus Stroke and Neuroscience Center.

The Grady system “is more efficient than it has ever been, [with] quality better than it has ever been,’’ he said. Its percentage of uninsured patients has also dropped, Haupert said.

Many uninsured patients have been shifted into the Medicaid program, he said.

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