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.