updated 9/25/2007 2:21:13 PM ET 2007-09-25T18:21:13

The Grady Hospital authority does not have enough information to determine whether changing its governing structure would be helpful or harmful to the financially strapped institution, lawyers charged with analyzing such a change said on Monday.

For nearly two months, the legal team studied the plan submitted in July by the Metro Atlanta Chamber of Commerce, which suggested changing to a nonprofit governing structure.

Attorney Lewis Horn of the law firm Troutman Sanders told the board that while shifting to such a structure was a legally available option and may be the best option, there is currently "no compelling reason to restructure."

Such a move "would not by itself solve the serious financial problems besetting Grady," Horn said.

Grady, the state's largest hospital, is struggling to emerge from a $370 million debt — including $250 million for badly needed, long-term capital improvements. Some say the hospital could close by the end of the year if a short-term solution is not found.

Monday's meeting in the board room was packed with clergy, lawmakers, Grady staff and the public — many of whom wore small green square notes with slogans like, "Keep Grady Public," "We Are All Grady" and "People Over Profit." They listened intently to Horn's report and applauded as he announced the legal team's conclusions.

Horn said that the team's research revealed that Grady is "a unique institution that requires a unique solution," and that seemingly similar hospitals elsewhere in the state have made the switch to nonprofit governance are not necessarily a justification for Grady to do the same.

He pointed to "layers of disadvantageous economic factors" that have resulted in the current crisis, and said more time is needed to gain a better understanding of who would comprise the nonprofit board and what they would accomplish.

The board then unanimously approved a resolution proposed by board Chairwoman Pamela Stephenson to create an exploratory committee and advisory group to spend up to the next 60 days exploring "strategic options and alternatives" to nonprofit governance. Such plans would seek to preserve Grady's mission of serving indigent patients while also coming up with ways to attract paying customers to the hospital, she said.

Specifically, the study groups would work to develop plans to secure an immediate infusion of cash, state appropriations for funding, and funding from private, philanthropic and corporate sources. The restructuring would take place on or before June 30.

Grady is losing $8 million per month, and even if it does pull out of debt this year, it will take at least $40 million per year to continue operating because the hospital caters to a largely poor and uninsured population and treats the most critically injured individuals.

The hospital employs more than 5,000 people and sees more than 1 million patients each year — 93 percent of whom are not privately insured and 75 percent of whom are on Medicaid. One out of every four doctors practicing in Georgia was trained at Grady.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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