Grady Hospital: The Plot Thickens

Based on what I have been able to gather from the Atlanta area media, the current narrative seems to break down very simple. Either Grady is allowed to transform its board into new board structured as a 501(3)C or Grady will have to close. This 501 (3)C structure was first recommended by the Grady Task Force. Since then, an anonymous source has stepped foward and committed 200 million dollars if the board is allowed to restructure.

It continues to be a mystery what this new board will do that will save the hospital. 501(3)C is an obscure sub universe in the tax code. It is frankly unclear what it will do that the previous board couldn't do. Its even less clear how this new structure will benefit Grady. Furthermore, the previous board won't be dissolved but rather it will cede much of its power to the new board. This will only confuse an already confused structure even more. It seems to me that the last thing a hospital with a history of corruption should be allowed to do is complicate its structure even more, but that is exactly the narrative that you are seeing in the media in the area.

Yet, the narrative seems to be that only this new board can save the hospital. Of course, this is a nonsensical and faulty view of the situation. For instance, if you look at the state of Georgia, you will see that Georgia provides significantly less funding to its safety net hospitals than most other states. If one compared the funding the state of Georgia provides to say the state of New York, they would see the state of New York does significantly more with its resources. The hospitals in that state have significantly fewer money issues. Of course, if the state were providing more money, the state might also want to scrutinize how that money is spent. That is likely something the powers that be at Grady want to avoid. In fact, I have already made it clear that I believe this new 501(3)C is nothing more than an attempt by the powers that be to create an extra layer of insulation to make Grady even more corruptable. That said, a more reasonable answer would be to demand that the state finally pony up the money it should to keep this crucial hospital open.

The best idea that I have heard is providing contracts for such unions as AFSCME and other unions that serve employees typical in a hospital. In return, the unions would use their health insurance at Grady. This plan is actually quite ingenius. That's because it solves one of the biggest structural problems at the hospital. The hospital currently has too many non paying patients. The best way to save Grady Hospital is to find a stream of paying patients that would offset the enormous number of uninsured that are treated there yearly. The unions would bring with them a plethora of patients that have good medical insurance. The unions would bend over backwards for the opportunity to unionize the staff at a hospital as big as Grady. It seems to be a win win...

So what is the problem with such a plan? I believe that a union would also bring with it the sort of scrutiny that the powers that be doesn't want at Grady. With a union protecting its workers, whistle blowers wouldn't be retaliated against. The union would be in a position to scrutinize much of the corruption that is going on there now. Since the powers that be are more interested in continuing the systemic corruption they have been committing there, they want no part of any union (in my opinion of course).

Grady Hospital has a long history of conflicts of interest turning into disaster. State Senator Charles Walker used a sophisticated web of conflicts to commit so much criminality at Grady and beyond that he wound up being convicted of 127 felonies. Robert Brown, long time prominent board member, often wound up giving lucrative contracts to his own architecture firm. (the most infamous was a multi million dollar addition in the early part of the decade) Even now, the CEO, Otis Story, resigned and was replaced with Pam Stephenson. Stephenson is now the CEO, a board member, and also a state legislator. Despite all of these past conflicts, it appears that financing will come with its own set of conflicts of interest.

The reason I am certain that this 501(3)C is nothing more than a sham is first, that it is presented as the only hope when there are clearly plenty of options. While it remains unclear what a 501(3)C is, let alone why it would help the situation at all, it continues to be billed as the savior. Furthermore, this 501(3)C plan is loaded with new conflicts of interest that are neither explained or dealt with. Since it was the brainchild of the Grady Task Force, it would be a reasonable assumption that most of the new 501(3)C board would be made of previous members of the Grady Task Force itself. If that is the case, this new board would be filled with all sorts of conflicts of interest. While the board is made up with plenty of people of high credibility, it is also made up almost exclusively with people that have an inherent conflict of interest at Grady. Almost every member of the Grady Task Force is tied to Grady financially, (Michael Russell who has had several lucrative contracts at Grady), professionally (Dr. Michael Johns head of Emory University's Woodruff Health Sciences Center) or politically. None of these inherent conflicts is explained or dealt with by the Task Force or in any plans of the new board. (In other words if this new board is allowed to be formed it will likely be filled almost exclusively by folks that have an inherent conflict of interest with the hospital itself. Exactly the sort of situation that lead directly to prior corruption would be allowed to form again)

This brings me back to this anonymous donor. Since the donor is anonymous, the exact identity can't be made with certainty. That said, multiple sources have speculated to me that the donor is the Woodruff Foundation. While I will keep my sourcing close to the vest, figuring on Woodruff being the anonymous donor is mostly a process of elimination. There are very few folks or entities with enough capital to provide 200 million dollars. Besides the Woodruff foundation, the only other entity is Emory itself. If it is Woodruff, then this raises all sorts of other conflict of interest issues. The Woodruff foundation has all sorts of ties to Emory University. (Emory University of course provides most of the staff at Grady Hospital) There are very few people or entities with 200 million to begin with, and even fewer with enough capital to be able to part with 200 million. Those that can only two have any motivation to keep Grady open: the short list is the Woodruff foundation and Emory University itself.

The name most prominently mentioned to head up the new 501(3)C board is Pete Correl. Correl is the former CEO of Georgia Pacific. Correll is currently a board member of Emory's School of Medicine. If my information is accurate, then this new plan is nothing more than a ruse by Emory University to consolidate even more power at Grady Hospital. Emory University already enjoys the benefits of yearly lump sum payments to staff the hospital and it even has Grady pick up the tab on its malpractice insurance. (Here is the sourcing on that)

Thus, if I am right, this so called 501(3)C will mostly have the practical effect of consolidating even more power at Grady Hospital into the hands of Emory University and its friends and allies. Yet, none of the media questions the false narrative that this 501(3)C is the only way to save Grady. None of the media scrutinizes this anonymous donor to make sure this donor doesn't have any alterior motives for giving the money. None in the media raise the obvious concern that Pete Correl's appointment to the new board would have.

What I am seeing in this evolving fiasco is pretty simple. At its time of greatest need, the powers that be have devised a plan that will make Grady even less transparent, will consolidate even more power into less hands, and will create even more conflicts of interest at a hospital with a long and sordid history of disastrous conflicts of interest. The worst part is that they are doing this with a largely apathetic media, public and political class looking the other way and not questioning any of the actions one bit.