Grady Memorial Hospital officials say the chief executive earned his nearly $300,000 bonus for 2009, but some elected officials say the safety net health system should have invested the money in improving patient care.
Grady CEO Michael Young's $290,800 bonus represented a 47 percent addition to his base salary of $615,000 a year. Young started at Grady in 2008 and is widely credited with turning around a financially failing hospital with widespread problems delivering care.
Grady board chairman Pete Correll said Young's bonus, delivered about two weeks ago, was justified considering that Young took Grady from a multimillion-dollar loss to a multimillion surplus in a year. He also emphasized that the board's approval of the bonus was in keeping with incentives included in Young's contract and performance targets that improved patient care and customer satisfaction.
"We now have a hospital not in danger of closing," Correll said.
But some public officials say Grady is not yet out of the woods financially and still requires many improvements to patient care, and they object to spending the money on an executive bonus.
"I'm deeply disappointed," said Fulton County Commissioner Emma Darnell. Noting that Grady depends on Fulton and DeKalb counties for about $80 million a year in support, and that these counties are themselves struggling financially, she said it "is not respectful to the taxpayers to support a $300,000 bonus."
Grady spokesman Matt Gove said the bonus was approved unanimously by Grady's board. Correll said the CEO's base salary is well below those of most CEOs of major Atlanta medical centers.
"I think he's earned it," said Rev. Timothy McDonald, a leader of the patient advocacy group called The Grady Coalition. "For what he's done for the poor and for Grady ... he deserves it."
But another of that group's leaders, state Sen. Vincent Fort (D-Atlanta), said one good financial year "does not mean Grady is home free and clear ... For the board to be dolling out a mega-bonus, it's not a good thing."
Young was hired as part of a restructuring of Grady leadership, which included replacing the old politically appointed board with one comprised of business and community leaders. He took the hospital from a $51 million operating deficit in 2008 to a $34 million surplus in 2009, Gove said. That turnaround does not include more than $300 million raised in a fund-raising drive for capital improvements.
Hospital workers also benefited from Grady's recent good fortunes. Workers received a 2 percent bump in the company's 401K contribution, and merit raises were provided for the first time in about three years, Gove said.
Young cut hospital costs, improved bill collections and improved patient care, Gove said. But he also drew controversy for some of the moves, including laying off 141 employees, budgeting $1 million year on marketing to improve Grady's image, and closing the outpatient dialysis unit.
Michael Rovinsky, a longtime medical consultant in Atlanta, said hospitals are increasingly looking to motivate CEOs with bonuses based on reaching goals, but he believes a 48 percent bonus is "on the high side."
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