The riots and protests that followed the death of Freddie Gray have prompted hospitals to seek a small increase in their rates so they can hire more workers from low-income, high-unemployment areas such as Baltimore City.
The plan won early praise Wednesday from members of the state Health Services Cost Review Commission, which will eventually need to approve the program and the rate increase. The proposal will now go before a commission workgroup on payment models for further discussion.
“Time is of the essence,” Commission Chair John M. Colmers, who is also vice president of health care transformation and strategic planning at Johns Hopkins Medicine, said Wednesday. “I would like this to come back to the commission as quickly as possible.”
The program would spend up to $40 million per year – to be raised through a small increase in hospital rates – to support up to 1,000 new hires for entry-level positions at approved hospitals. Those jobs would include community health workers, nurse assistants, and specialists who can help patients sign up for insurance.
The plan is the brainchild of Ronald Peterson, president of The Johns Hopkins Hospital and Health System, who told the commission that as the city’s largest employers, hospitals are well-positioned to help address the unemployment and income disparity that contributed to the April unrest.
“We believe we have something tangible that we can offer to give hope to many folks in the inner city of Baltimore in a relatively short period of time,” said Peterson, who was joined by Donna Jacobs, senior vice president of the University of Maryland Medical System, and Bradley Chambers, senior vice president of MedStar Health.
The decline of the city’s manufacturing industry since 1970 has eliminated more than 60,000 jobs. In April, the city’s overall unemployment rate was 7.4 percent, but it reached 17 percent in some neighborhoods; the statewide rate was 4.9 percent, according to the proposal.
Peterson believes the program will also help address health disparities in the city. “There is a correlation between poverty and poor health,” he said, adding that those living in the inner city were likely to have a life expectancy 20 years lower than residents of more affluent neighborhoods.
The program would be targeted to residents in low-income zip codes, and while it would focus on Baltimore, it would not be limited to the city, Peterson said.
With their spending limited by the terms of Maryland’s revised Medicare waiver, the state’s hospitals are placing more emphasis on preventive rather than acute care. The state is expected to add about 75,000 health care jobs by 2020, and more than 20,000 of those will require an education level only at or below a high school diploma, according to the proposal.
In the first year of the revised waiver, hospitals exceeded key financial targets, such as keeping spending growth well below a 3.58 percent limit and achieving $90 million in Medicare savings when none were projected. This means hospitals can afford to increase spending to pay for the employment program, according to the proposal.
The plan was accompanied by letters of support from several members of Maryland’s congressional delegation, the presiding officers of the Maryland General Assembly, Baltimore state Dels. Peter Hammen and Maggie McIntosh and Mayor Stephanie Rawlings-Blake.
Commissioner Dr. Stephen H. Jencks said Wednesday that officials needed to make sure the program had a clear way to measure its success and show that the investment is paying off. Nonetheless, he praised the proposal overall.
“It’s hard to see why we don’t want this to happen,” Jencks said.