By John Schaffner

When Buckhead resident and former Georgia Pacific CEO A.D. Pete Correll became involved with Grady Hospital, he immediately thought the merciful thing to do was to shut it down. But after a short pause, he realized Grady had to be saved and made into one of the nation’s greatest hospitals.

Correll, the chairman of Atlanta Equity and chairman of the board of the Grady Hospital Foundation, gave one of his first speech before media at the Aug. 14 meeting of the Buckhead Business Association.

He pointed out all of the statistically important things: Grady Hospital is the second-largest hospital in the Southeast. The hospital has about 800 beds, sees about 1 million patients a year and has about 35,000 people who stay overnight.

Grady also runs the largest nursing home in the Southeast, Crestview; has nine outpatient clinics throughout the county; and is a major teaching institution with about 500 residents at any time. It has trained about 25 percent of the doctors in Georgia and every year does continuing education for doctors in the state.

Grady is Georgia’s only Level 1 trauma center and operates the state’s burn center and poison center, which gets about 150 calls a day from around the state.

“It is a truly wonderful institution,” Correll told the business group.

Correll got involved with Grady after taking a tour of all of the emergency room facilities Emory works with as part of a fundraising effort he and his wife are involved in for Emory.

The night after making the tour, he was having drinks with Tom Bell, the chairman of Cousins Properties, and he told him about his experience of the day. The two decided they needed to do something about the situation at Grady.

How do two private citizens do something about a broken government entity? They went to the Metro Atlanta Chamber of Commerce and asked that a task force be created to look at Grady.

After doing a study, they came to two conclusions: Grady was operationally in trouble — not the worst hospital, but well below average; and even if it operated in the upper level of hospitals, it lacked funding.

“We concluded we had two problems,” Correll said. “We had to figure out how to fix Grady operationally, and then we had to figure out how to fix Grady from a funding standpoint.

“We went literally through a year of negotiations where all the ugly race tendencies of Atlanta came out on the table, but we finally got the foundation in control of the hospital. We finally got a good board of 17 people, people who have been leaders in this community for years.”

How did Grady get in this terrible shape? About 15 years ago the people of Fulton and DeKalb counties “decided to force Grady Hospital to close,” Correll said, by capping the funding for the hospital.

Medical costs have gone up and up. The population of the area has gone up and up. And the indigent population of Atlanta has gone up and up, he said. But not funding for Grady.

“By definition, Grady would close. That is called putting a business on a ‘Golden Glide,’ which is a perfectly legitimate thing to do,” Correll said. “The only bad strategic mistake you can make is to change your mind, because you have driven it so far into a ditch.”

He added: “When we started the task force, our basic assumption was we had to close Grady Hospital. We decided we did not want Atlanta on the front page of every major newspaper saying we have a health care crisis and so don’t move your business to Atlanta. So there was no alternative but to save Grady.”

He said the hospital needed about $400 million in equipment. Correll went to see an old friend, Jimmy Williams, who heads up the Woodruff Foundation, to try to get some of the $200 million donated by that foundation and to get Williams to go with him to other foundations to raise the remainder of the initial $200 million.

According to Correll, Williams said, “What if I give you the whole $200 million?” “I responded, ‘That would be a whole lot simpler.’ ”

Correll went to Bell, who was running the capital campaign, and said, “I made one visit and raised $200 million. The other $200 million is yours, and it should be easy.”

That broke the logjam, Correll said.

The opposition vanished, he said. “When you can say, ‘I have an idea and $200 million; what do you have?’ the opposition fell away.”

He explained that the saga involving former Grady CEO Pam Stephenson was “clearly not helpful.” He said he had to get her off the front page of the newspaper, and he did, even though some people thought he paid too much to do so.

He praised the new CEO, who turned around a similar type of hospital in Buffalo, N.Y., and built a hospital in Lancaster, Pa., that is one of the top 10 hospitals in the country. He starts work Sept. 8.

“I don’t think any of us underestimate the problems. They are very, very severe,” Correll said. “Grady lost $7 million last month. It is sucking cash like crazy.”

Correll said the other surrounding counties should help pay for Grady, “but they are not going to do that. They can send their indigent patients there, but they will not fund it.”

He said about 16 percent of Grady patients do not live in Fulton or DeKalb. Half the patients don’t have any money. The average patient costs $17,000 to treat, and the hospital loses $8,500 on each patient. “The more patients we get,” Correll said, “the more we lose.”

Correll believes that other hospitals will help with the funding needs of Grady. He also thinks there is a chance for a trauma funding bill in the General Assembly to help the hospital. Grady lost $40 million last year treating trauma patients.

“I am absolutely convinced we can get this hospital working in two or three years and absolutely convinced we can find additional funding,” Correll told the BBA audience. “We are a unique institution. We need to change the environment” within the institution, but not the mission or the dedication to service.