State regulators approved a compromise job-creation program Wednesday that’s expected to create about 375 hospital jobs for residents of impoverished areas in Baltimore and across Maryland.
The Health Services Cost Review Commission, which sets the rates for the state’s hospitals, agreed to make up to $10 million available for the program in fiscal 2017. Hospitals applying for a share of those funds, which would come from an increase in their hospital rates, would need to provide a 50 percent match, bringing the total available for the program up to $15 million.
In the wake of the April riots in Baltimore, a group of hospitals, led by Johns Hopkins, initially proposed raising an additional $40 million per year through increased hospital rates to fund 1,000 entry-level jobs for residents of low-income, high-unemployment areas, such as some Baltimore neighborhoods.
That proposal met with criticism from HSCRC staff, which argued in November that the initiative could overlap with existing efforts to reduce health disparities — which will create new jobs — and an expected reduction in hospital usage could end up eliminating some of the hospital-based jobs created by the program.
Earlier this month, Hopkins and the University of Maryland Medical System (UMMS) scaled back their proposal, asking instead for $10 million per year, with another $10 million made available in grant funds, to support 500 new jobs. Commission staff Wednesday suggested a $5 million adjustment to hospital rates to support program development and training but felt hospitals should fund the new jobs through other means, such as existing rates and donations.
While the staff proposal was a step in the right direction, more action needed to be taken, said Commissioner Thomas R. Mullen,who is also president and CEO of Mercy Health Services. “I just don’t think it’s enough,” he said.
Mullen came up with the plan that was ultimately adopted, which falls between the hospital and staff recommendations.
The commission’s decision Wednesday drew measured praise from Baltimoreans United in Leadership Development, or BUILD, a community organization that supported the hospitals’ initial proposals.
“We do think they can do more, and we will follow up, but today this is a bold step in unifying the city,” said the Rev. Glenna Huber, BUILD co-chair. Huber also criticized CareFirst BlueCross BlueShield for its opposition to the plan.
CareFirst objected to the initial, $40 million proposal, arguing that hospitals should not be allowed to pass along the cost of the program to patients and insurers. The insurer, Maryland’s largest, backed the $5 million proposal suggested by commission staff.
Representatives from Hopkins and UMMS said the approved plan was a good first step.
“This will, I think, make a positive impact, it just wasn’t what we asked for,” said Stuart Erdman, a former top financial executive at Hopkins now acting as a consultant to the health system. But if the program proves successful, hospitals could come back to the commission and ask to expand on it, he said.
Donna L. Jacobs, senior vice president for government and regulatory affairs at UMMS, said that while the system would need to evaluate how best to meet the 50 percent funding match — hospitals suggested only a 20 percent match — it was committed to making the program work.
“It’s all geared toward doing the right thing in our communities,” she said.