1199 Reveals Risky Financial Scheme, $180 Million Debt at UMD Medical System
Monday, August 19, 2013(Metropolitan Washington Council, AFL-CIO)
The University of Maryland
Medical System (UMMS), which
receives 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, according to research
released by the state’s largest
healthcare workers union, 1199SEIU United
HealthCare Workers East. 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,
according to the union. “The value
of this debt and swaps is tied to interest
rates, which, like the spinning
wheels of a slot machine, change frequently,”
1199 said in a press release last
week. As a result, the union says that UMMS
resources that could be used for
patient care “are instead being used to
service this debt.” “Executives at the
University of Maryland Medical System are
gambling with patient care dollars,
resulting in debt—and now they are laying off
workers while still paying
themselves millions each year,” said John
Reid, 1199’s executive vice president
for the Maryland/DC division. “The people of
Maryland deserve better use of our
patient care resources. UMMS receives the
majority of its funding from our tax
dollars.” 1199 on August 11 launched a
Baltimore-area corporate information
campaign with billboard, radio, newspaper and
online media advertisements –
including a website and Facebook
page.