Center for Advanced Surgical Services & Grady s Ponce Center A Presentation to Fulton and DeKalb Officials July/August 2017
Presentation Overview Executive Summary Overview of Grady An Invaluable Asset Grady s Reach and Impact in Fulton and DeKalb Community and Economic Impact Governance Grady s Ability to Meet Growing Demand Vision Proposed Funding Strategy Grady s Proposed Center for Advanced Surgical Services Transforming Grady s Ponce Center for Treatment of HIV/AIDS The Future of Grady: Serving our Community 1
Executive Summary Thanks to the generosity of our community who stepped forward to save Grady a decade ago Grady is stronger than ever. Since then, Grady has grown strategically to meet the need for highly specialized care not found elsewhere and to provide essential healthcare services for all. However, Grady is at full capacity, driving the need for more patient beds and operating rooms. At the same time, the Atlanta market is growing, especially intown. Grady has 2 critical projects totaling $164.7 million to ensure the ability to grow and meet the needs of the community: A new Center for Advanced Surgical Services to increase capacity, efficiency and volume for essential surgical services and outpatient clinics. An expansion of the Ponce Center to amplify our community s ability to respond to and stem metro Atlanta s HIV/AIDS epidemic. These projects will have tremendous impact: expand access to services, improve patient experience, facilitate growth, expand Medicare markets and diversify the payor mix. These benefits will ultimately provide greater financial stability to further support Grady s mission of service to all. The Fulton DeKalb Hospital Authority and Grady are seeking to accomplish these projects through a 50/50 public/private partnership, representing the first public capital investment in Grady in 25 years. 2
What is Grady? Grady is the largest safety net health system in the state, providing critical services to citizens of Fulton and DeKalb County. Licensed for 953 beds, Grady Memorial Hospital and its clinics handle more than 620,000 patient visits each year, more than any other area hospital. Grady is the state s largest teaching hospital and primary training ground for Emory and Morehouse Schools of Medicine. An estimated one out of four doctors in Georgia have received training at Grady. We now train military physicians and medics who want to learn from the best. Our centers of excellence routinely treat patients whose conditions are beyond the abilities of other hospitals. 3
Grady: An Invaluable Asset Industry leading Marcus Stroke and Neuroscience Center State of the art Correll Cardiac Center Georgia Cancer Center for Excellence and Avon Breast Center Busiest Level 1 Trauma Center in Georgia Exclusive 911 and ambulance services for City of Atlanta Fulton, with expansion to 12 rural counties One of the country s largest infectious disease programs Nationally acclaimed burn center 1 of only 2 in GA World s first 24 hr comprehensive sickle cell center Georgia s only poison control center Hughes Spalding Children s Hospital (operated by CHOA) 6 Neighborhood Health Centers in Fulton and DeKalb and Crestview Nursing Facility 4
APPROXIMATELY 620,000 PATIENT VISITS ANNUALLY (1,700/DAY) GRADY EMS RESPONDED TO MORE THAN 115,000 911 CALLS 25% OF GEORGIA PHYSICIANS RECEIVED SOME OF THEIR TRAINING AT GRADY 13,000 SURGERIES in 2016 (35/DAY) 1,000+ PHYSICIANS AND RESIDENTS THROUGH EMORY AND MOREHOUSE PARTNERSHIPS 140,000+ ED VISITS ANNUALLY (400+/DAY) 6,000+ EMPLOYEES 5
Grady s Reach in Fulton & DeKalb Grady and its assets are owned by Fulton and DeKalb County taxpayers. 6
Private Investments in Grady Over the past decade, over $350 million in private support has been invested to fuel Grady s transformation: Marcus Stroke & Neuroscience Stroke Center Correll Cardiac Center Marcus Trauma & Emergency Center Best in class electronic medical records system System wide upgrades and improvements Revitalized Women s & Infants Center 7
Grady: An Economic Engine Grady employs 1,311 Fulton and 1,381 DeKalb County residents which represents nearly one half of our workforce Each year, Grady generates $788 million in household earnings Without Grady and our Level I Trauma Center, Atlanta could not host the Olympics, Super Bowl, Final Four or other large scale events and conferences that generate economic benefit to our region Grady generates $1.7 billion in economic output each year 8
Who Owns Grady? Grady and its assets are owned by the taxpayers of Fulton and DeKalb through the Fulton DeKalb Hospital Authority (FDHA), which has a 10 member board: 7 members appointed by Fulton County Commissioners 3 members appointed by the DeKalb County CEO Tommy Dortch, Chair Pamela Stephenson, Vice Chair In 2008, Grady Memorial Hospital Corporation (GMHC) was created and a 40 year lease was executed with FDHA, and approved by Fulton and DeKalb commissions, for GMHC to operate the health system. GMHC makes annual lease payments of $2.7 million to FDHA. 9
Who Does Grady Serve? Grady s historic mission is to provide excellent care to the underserved citizens of Fulton and DeKalb a legacy that spans 125 years 28% of Grady s payor mix is uninsured and cannot pay for care Nearly 90% of these patients reside in Fulton and DeKalb 56% are from Fulton 33% are from DeKalb The total cost of our uncompensated care in 2016 was $223 million 10
How Much Volume by County? Grady provided over 720,000 patient encounters* to Fulton and DeKalb residents in 2016 Volume from Fulton and DeKalb to Grady grew 18% between 2012 and 2016 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 Patient Encounters from Fulton and DeKalb Counties 2012 2016 0 2012 2013 2014 2015 2016 Fulton Dekalb * Encounters include individual activities and procedures such as lab work, testing, x-rays, etc. 11
Who Covers Uncompensated Care? After all government payments, Grady still provides more uncompensated care than is reimbursed: Fulton DeKalb Total Net Cost of Uncompensated $64.2 million $39.6 million Care (2016 Annualized) County Support (2016) $42.5 million $12.9 million Remaining Amount Unfunded $21.7 million $26.7 million %of Uncompensated Care Covered 66.2% 32.6% 12
The Issue: Grady Must Grow to Serve Fulton & DeKalb Grady is a stable, successful health system generating enough cash to sustain operations for the foreseeable future but only with county support Combined yearly county support has been reduced by more than one third since GMHC was established in 2008 Grady is facing an urgent issue: we are at maximum capacity and must expand to meet the needs of our community If we do not grow, we risk seeing our service and quality drop to unacceptable levels 13
The Plan: Grow to Meet Demand Build a new Center for Advanced Surgical Services housing outpatient surgeries and clinics on the site of the former Fulton County Health Center across the street from the hospital Expand the Infectious Disease Program known as the Ponce Center to respond to the staggering increase in HIV infection rates in Atlanta and help stem the epidemic Fund the $165 million project through a true 50/50 public/private partnership: $82.5 million through 30 year county bonds $82.5 million through philanthropic and other sources 14
Proposed Funding Strategy A 50/50 Public/Private Partnership PROJECT COMPONENT Construction of Surgery Center, Cancer Center, and Clinics Inpatient Beds Equipment Total Center for Advanced Surgical Services Ponce Center/Infectious Disease Program (IDP) TOTAL (2 Projects) CASS and IDP Ponce Center ESTIMATED COST $106.5 M $20.2 M $15.0 M $141.7 M $23 M $164.7 M Additionally, Grady will self fund the land acquisition and a new 660 space parking structure $38.3 Grady is seeking 50% of project costs through county funding ($82.4M) and 50% through private funding, including philanthropy and other private sources ($82.3M). This partnership would represent the public sector s first capital investment in Grady in 25 years. 15
Proposed Funding Strategy A 50/50 Public/Private Partnership Estimated County coverage of 30 year bonds of $82.4* million at 5% : Fulton County Coverage (70%): $3.8 million/year** DeKalb County Coverage (30%): $1.6 million/year** * A slightly higher par amount is possible due to transaction costs and costs of issuance. **These amounts represent less than 1/10 of a mill for each county. 16
Existing Bond Commitments* Remaining Annual Cost End Date Fulton $124.6 million $17 18 million 2023 DeKalb $29.8 million $7.5 million 2020 * From the $336 million bond issuance in 1993 to fund a major addition and expansion of the hospital. At the time, this investment represented the first upgrade and expansion since 1954. 17
Potential Multi Year Schedule Example A This schedule assumes repayment of the bonds, including principal and interest, begins in 2018. With defeasement of existing bonds, the counties could invest in new capital projects for Grady and at the same time, reinvest savings from defeased bond payments towards indigent care for residents in effect, enabling new projects while keeping current funding levels constant. FULTON 2017 2018 2019 2020 2021 2022 2023 2024 2025+ Indigent Care 42.5 42.5 42.5 42.5 42.5 42.5 42.5 60 60 Existing Debt Service 17.7 17.7 17.6 17.6 17.7 17.9 19.9 0 0 New Debt Service 731k 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 Total 60.9 64 63.9 63.9 64 64.2 66.2 63.8 63.8 DEKALB 2017 2018 2019 2020 2021 2022 2023 2024 2025+ Indigent Care 12.9 12.9 12.9 12.9 20.4 20.4 20.4 20.4 20.4 Existing Debt Service 7.5 7.5 7.5 7.5 0 0 0 0 0 New Debt Service 313k 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 Total 20.7 22 22 22 22 22 22 22 22 18
Potential Multi Year Schedule Example B To minimize the impact to the county budgets, repayment of the proposed bonds could be interest only until the existing bonds are paid off in 2023. With defeasement of existing bonds, the counties could invest in new capital projects for Grady and at the same time, reinvest savings from defeased bond payments towards indigent care for residents in effect, enabling new projects while keeping current funding levels constant. FULTON 2017 2018 2019 2020 2021 2022 2023 2024 2025+ Indigent Care 42.5 42.5 42.5 42.5 42.5 42.5 42.5 58.8 58.8 Existing Debt Service 17.7 17.7 17.6 17.6 17.7 17.9 19.9 0 0 New Debt Service 731k 2.9 2.9 2.9 2.9 2.9 2.9 4.2 4.2 Total 60.9 63.1 63 63 63.1 63.3 65.3 63 63 DEKALB 2017 2018 2019 2020 2021 2022 2023 2024 2025+ Indigent Care 12.9 12.9 12.9 12.9 20.4 20.4 20.4 20.4 20.4 Existing Debt Service 7.5 7.5 7.5 7.5 0 0 0 0 0 New Debt Service 313k 1.3 1.3 1.3 1.3 1.3 1.3 1.8 1.8 Total 20.7 21.7 21.7 21.7 21.7 21.7 21.7 22.2 22.2 19
Proposed Project Timeline September 2017 OPERATIONAL PLANNING 4 months December 2017 SPACE PROGRAMMING & SCHEMATICS 8 months August 2018 September 2018 PERMITS 1.5 months CONSTRUCTION* 30 months March 2021 PROJECT COMPLETION Total Timeline: 3.5 Years *Grady will continue to meet or exceed DBE requirements set forth in contracting memorandums. 20
Center for Advanced Surgical Services Building Plan Orthopedics Clinic 9,600 SF PM & R and Rehab Clinic 9,300 SF Staff Sup. 600 Mech 2,600 sf L7 Cancer Clinic 9,600 SF Pharm. Infusion 3,000 sf Cancer Infusion 9,300 SF Staff Sup. 2,600 sf Mech 1,100 L6 Multi Specialty Clinic 4,800 SF Oral Surgery Clinic 5,800 SF Ophthalmology Clinic 9,600 SF Shell 2,300 sf Staff Sup. 2,000 sf Mech 1,100 L5 Surgical Clinic 4,800 SF GI Clinic 4,800 FS GI Procedure Suite w/ Prep & Recovery 8,000 SF Imaging 5,000 SF Staff Sup. 2,000 sf Mech 1,100 L4 Future Bridge Ambulatory Surgery Center W/ Prep. & Recovery 22,200 SF Staff Sup. 2,300 sf Mech 1,100 L3 OP Lab / Draw & PAT 6,200 SF Lobby & Education 5,000 SF Future Imaging (Shell) 4,500 SF Reg., Admin & Staff Support 4,800 SF Mech 1,100 L2 Logistics & Staff Support 4,400 SF Lobby, Retail & Food 4,500 FS CSP 3,300 SF Mechanical / Electrical 9,400 SF L1 198,000 BGSF 21
Center for Advanced Surgical Services: Value Proposition Expands Grady s clinic capacity by 45%, increasing patient efficiency, volume and training Increases total operating room volume by 25% and creates more patient centered environment UPDATE Allows growth in strategic service lines Frees space for 52 new inpatient beds Diversifies our payor mix to further support our mission and expands Medicare market Increases Grady s operating margins and improves days cash on hand, ultimately providing financial flexibility for the health system 22
Ponce de Leon Center Building Plan Administration Faculty + Med Dir. Offices, Data Mgmt. + Workstations Emory Research Main Center for Wellbeing Mental Health Main Clinic 4 6 Rooms TLT Mech Mech Mech Mech Mech TLT Emory Lab Transition Center Main Clinic 18 20 Rooms Women and Peds Clinic 10 12 Rooms Emory Peds 5 Rooms TLT Center for Wellbeing Health & Wellbeing L6 L5 L4 L3 L2 Infusion/ Treatment 10 Stations Lobby/ Active Waiting Pharmacy Med Rec Mech Conference Center/ Active Waiting Security TLT Imaging Procedure Suite 2 Rooms Dept. Enroll & Edu L1 Oral Health Center 8 Stations Oral Health Expansion 8 Stations Medical Case Mgmt Vending Retail Food Staff Lounge Mech Open Hand Living Room TLT Lab Facil Mgmt Comm Materials Mgmt Patio Level 23
The Need to Expand and Transform Grady s Ponce Center for Treatment of HIV/AIDS Atlanta is at the epicenter of the urgent HIV epidemic that has gripped the Southern United States and Grady is on the frontlines of this crisis. Grady operates one of the largest and most impactful HIV/AIDS clinics in the country, known as the Ponce Center. More than 6,000 men, women and children are served annually, 80% of whom reside in Fulton and DeKalb Counties (the two counties with the highest HIV prevalence in Georgia and among the highest in the U.S.) The Ponce Center has not had major updates since it was opened in the early days of the AIDS crisis, though treatment models have changed drastically Current space is inadequate to handle the growing patient base, and the outdated facility does not support team based, efficient care When the Center opened, the top two floors were left as shell space to allow for future growth when needed and the need has never been more pressing 24
Transforming Grady s Ponce Center for Treatment of HIV/AIDS The Ponce Center will be expanded and revitalized so that we can serve more patients, conduct more groundbreaking research and develop new programs. The transformed building will: Significantly expand treatment areas for primary and specialty care Improve patient centered care by streamlining key services Increase patient support with dedicated education and wellness areas Create a welcoming environment that maximizes privacy Incorporate advanced technology to improve outcomes and communication Support discovery with an expanded, dedicated space for research The transformed Ponce Center will amplify our community s ability to help stem and respond to metro Atlanta s HIV/AIDS epidemic. 25
We are so proud of how far Grady has come. And these two critical projects will catapult Grady's ability to care for our growing community and improve the health of so many. The Center for Advanced Surgical Services will move outpatient surgeries and clinics to an efficient, state of the art facility while freeing up much needed space for a growing number of patients who need Grady s experienced trauma, stroke and other services they depend on. And a transformed Ponce Center will help provide the tools necessary to stem the HIV/AIDS epidemic. Without these projects and your support, Grady can't grow or continue to meet the needs of our community. TOMMY DORTCH Chairman, The Fulton DeKalb Hospital Authority 26
The Future of Grady Grady has learned from its past there is danger in getting behind the curve on capacity and the ability to diversify payor mix. The community depends on Grady to respond to its needs and be equipped to serve effectively and efficiently. Your understanding of Grady s unparalled role in the health of our community continues to advance our transformation, raises the bar for excellence and quality care for all, and has carried us to where we stand today. Your partnership is essential on this next critical step that will shape our community s future. 27