1199 Reveals Risky Financial Scheme, $180 Million Debt at UMD Medical System

(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.