A campaign by the nurses and caregivers of 1199SEIU to highlight risky financial practices at the University of Maryland Medical System has expanded with new billboards in Baltimore and a social media campaign.
The campaign was also highlighted in a recent story in The Baltimore Sun, “UMMS defends use of interest rate swaps: Use of financial tool questioned by labor union,” by Andrea Walker.
Vanessa Johnson, vice president at large for the union, told The Baltimore Sun that UMMS executives “have been crying poverty to the state over the years” while giving themselves huge raises and tying up taxpayer funds with interest rate swaps that could be used instead to provide patient care.
1199SEIU United Healthcare Workers East launched the information campaign with full-page newspaper ads, billboards and radio spots. So far, the effort has revealed the fact that UMMS, which receives nearly 58 percent of its revenues from public funding, has a more than $180 million debt due to a complex financial scheme that Robert Chrencik executed when he was CFO, and which continued after he became CEO of the statewide system in 2008.
The debt, which has at times ballooned to more than $200 million, is a result of UMMS issuing variable rate debt and interest rate swaps. The value of this debt and swaps is tied to interest rates. This gamble has caused UMMS to pay more in interest than it would have paid absent the swaps. In addition, to cover the bets, UMMS is forced to post millions in collateral. Thus, financial resources that could be used for patient care are instead being used to service this debt.
The fact that the University of Maryland Medical System, with twelve hospitals throughout the State, receives a majority of its funding from the public raises other important issues about whether UMMS should be engaging in risky financial transactions.
In addition to the new billboards, the campaign is expanding to social media, including Facebook. The website for the campaign is: UMMSCodeRed.org.