A former member of the Grady hospital board has accused the Emory School of Medicine of cherry-picking Grady patients to benefit its own hospitals.
Bill Loughrey said Emory has systematically steered paying patients from Grady to Emory-owned hospitals, leaving Grady in fragile financial shape as it serves the poor and uninsured.
Loughrey said Tuesday that he detailed his concerns to state Sen. David Shafer (R-Duluth), who has started looking into the matter. The accusations were also discussed during a meeting of a state House committee on Grady's general financial malaise Tuesday.
Dr. Thomas Lawley, dean of Emory's medical school, denied that Emory has shorted Grady to benefit its own hospitals. He said Emory has worked hard to help Grady, accepting partial payments for its doctors and being patient regarding the $45 million Grady owes Emory.
Loughrey, who was recently replaced on the board after nine years, said Emory has underfunded and understaffed such areas cardiology and orthopedics, which compete with Emory-owned hospitals. This has cost Grady millions of dollars, Loughrey said.
In addition, he said Emory has been transferring paying Grady patients to Emory-owned hospitals, "leaving Grady with an unsustainable patient mix dominated by indigent and other nonpaying patients."
His concerns arise as Grady, a major health provider for the metro poor, is spiraling in debt and may, in a worst case scenario, close by year's end.
Emory officials said they do not understaff Grady, but Lawley said recruiting doctors to serve there is difficult.
Loughrey's letter cited an audit he said has been kept secret regarding the contract between Grady and Emory. Loughrey said the audit, performed about two years ago, revealed that Emory did a poor job of keeping records, which Loughrey said raises questions about whether the services Grady paid for were provided.
Lawley, the Emory dean, said the audit actually determined that Emory was in conformity with the Grady contract.
Three days later, another AJC article suggested that Emory's claims about the hours its physicians worked were based on questionable data.
The Emory School of Medicine has not implemented key recommendations from an audit two years ago that criticized the way its doctors record time worked at Grady hospital.
The record-keeping is crucial to the amount of money Emory bills Grady for the use of its doctors. The issue has reemerged at a time when Emory says the financially troubled Grady owes it $45 million.
The 2005 audit, commissioned by the Grady board of trustees and performed by the accounting firms of Cherry, Bekaert and Holland and Horne, examined the contractual relationship between Grady and Emory, which provides the hospital with many of its doctors.
The audit said Emory's method for tracking its doctor's time at Grady was "inadequate" to accurately monitor whether the work was actually being performed.
To avoid having doctors record every hour they spend at Grady, Emory doctors typically track their hours worked for a single week every 3 months. Emory uses that figure to calculate how much Grady should pay for all of the doctors' services.
The audit recommended that Emory have the doctors record their time at Grady more frequently.
Emory's dean of medicine, Dr. Thomas Lawley, said, "We believe in our record reporting, and we believe in its accuracy."
He stressed it conforms with the contract with Grady and abides by the law.
[state Sen. David] Shafer said he obtained the audit from Grady Thursday under Georgia open records laws.
Shafer, who has passed the letter on to Lt. Gov. Casey Cagle, said, "It's very troubling that Grady and Emory have ignored the audit." He added, "The audit should be implemented."
As for Emory's statement that the method complies with its contract with Grady, Shafer said, "That's like saying the Titanic had the legally required number of lifeboats. It misses the point."
Finally, last week the AJC reported that while Grady may stay open, its financial trouble will likely lead to significant down-sizing.
Despite talk of gloom and doom, Grady Memorial Hospital won't close at the end of the year or in the foreseeable future, even in a worst case scenario, said hospital chief executive Otis Story.
Even if the hospital can't get more funding, Grady will simply scale back operations to a manageable, affordable level, Story said.
Grady has lost money every year since 2000.
"You don't lock the doors — you resize and keep tweaking until it works," Story said. "It can continue to limp on."
Well, here we go again, another storied hospital on the brink of financial collapse, amidst finger-pointing by the leaders of the hospital and the academic medical organizations that are supposed to be supporting it. I cannot tell who is to blame. I also cannot tell how much the hospital's problems are due to the larger dysfunction in the US health care system.
But it would be nice if the leaders involved clearly focused on their health care and educational missions.
If Grady collapses, or even if it just continues to "limp on," the results would be bad for many patients in Atlanta who depend on its services, and many medical students and interns and residents who benefit from the educational experiences it provides.