Reporter- Baltimore Business Journal


A health care workers union has launched a full-blown advertising campaign against the University of Maryland Medical System’s financial practices, complete with full-page newspaper ads, highway billboards, radio spots and an advertisement-plastered vehicle circling the system’s flagship Baltimore hospital.

The campaign by 1199SEIU United Healthcare Workers East takes issue with the medical system’s $180 million in debt and accuses medical system CEO Robert Chrencik of sinking the system into debt with risky financial investments in the early 2000s. The union says that because 58 percent of the medical system’s revenue comes from public funds, administrators should be held more accountable. The medical system has disputed the union’s claims.

“Problems at UMMS have been adding up, including, now, the laying off of workers and a recent fraud settlement,” John Reid, executive vice president for the Maryland/D.C . division of 1199SEIU United Healthcare Workers East, said in a statement. “At the same time, they are pursuing aggressive expansion throughout the state. We felt it important for these financial management issues to be raised for the public, which supplies so much funding to the system.”

University of Maryland Medical Center laid off 65 workers in June, citing budget concerns. Other hospitals in the system have also cut staff.

The union has its numbers right when it comes to funding — about 58 percent of the medical system’s revenue comes from government sources. Specifically, that money comes from Medicare and Medicaid, the federal and state-backed insurance programs for seniors, the disabled and the poor.

Medical system spokeswoman Mary Lynn Carver said that about 31 percent of the medical system’s patient revenue comes from Medicare and about 27 percent of patient revenue comes from Medicaid payments. The medical system reported $1.4 billion in revenue in fiscal 2012, $1.3 billion of which was program service revenue, according to tax records.

“To suggest that the medical system receives any more taxpayer support than other hospitals in America or in Maryland is inaccurate,” Carver said.

Carver said the medical system does not receive any money from the state or federal general funds and is not a division of the state. The governor does appoint its board members from a list of recommendations from the medical system.

Regarding the medical system’s debt, Carver said the medical system’s practices are similar to those at other hospitals.

“Much like individuals take out car or house loans to pay for large long-term purchases, hospitals do the same thing.” Carver said. “If the hospital system could not take on debt, we would not be able to take on large capital projects like investing in our IT infrastructure, purchasing new equipment, or renovating or expanding buildings.”

Moody’s Investors Service in February affirmed an A2 rating for $354.2 million in revenue bonds for the medical system. Moody’s revised its outlook for the medical center from stable to negative, citing the system’s acquisition of the former St. Joseph Medical Center, among other factors.

Vanessa Johnson, a vice president for the union, said SEIU wants the campaign to spur greater financial accountability and transparency within the medical system.

Sarah covers health care, higher education, biotech and technology.