The University of Maryland Medical System has drawn criticism this week for contracts awarded to members of its board of directors, but two of Maryland’s other large health systems also have financial relationships with members of their boards.
LifeBridge Health and MedStar Health joined the University of Maryland Medical System in paying millions of dollars in contracts to the businesses of the members of their system and hospital boards, according to disclosure reports filed with the state Health Services Cost Review Commission.
Like the University of Maryland Medical System, both LifeBridge and MedStar are private nonprofits.
Johns Hopkins Medicine, the region’s other major health system, did not have any conflicts of interest disclosed in its filings with the commission.
The University of Maryland Medical System board of directors have come under fire since The Baltimore Sun reported that the firms of nine members of the board had also received a contract from the system.
Those members included Baltimore Mayor Catherine Pugh for her self-published children’s books. Pugh resigned from the board Monday.
Two more members of the board resigned from the board Tuesday while four other members with potential financial conflicts have taken voluntary leaves of absence at board chair Stephen A. Burch’s request.
But the University Maryland Medical System is not the only one where board members have disclosed potential financial conflicts of interest with state regulators.
At LifeBridge Health more than $10 million in contracts were paid to businesses associated with six members of the board. Another $10 million was paid to businesses associated with 14 members of individual boards of hospitals.
The Baltimore-based system includes Carroll Hospital, Levindale Hebrew Geriatric Center and Hospital, Northwest Hospital and Sinai Hospital. It is also in the process of acquiring Bon Secours Hospital.
The hospital said the members of its board provide outside perspective but disclose conflicts of interest, which are also overseen by the board’s audit and compliance committee. Board members are recused from votes where a conflict “may influence their vote” or where “a conflict may exist.”
“Members of the LifeBridge Health Board of Directors play a vital role in our organization through their experience, expertise and outside perspective,” Sharon Boston, a system spokesperson, said in a statement. “As business and community leaders, they bring a wide range of insight, a depth of knowledge and ongoing guidance and oversight in our mission to improve the health of the people in the communities we serve.”
Most of the money awarded to the system board members’ firms is from $9.2 million the system pays to Obrecht Properties LLC to lease medical buildings to LifeBridge and Northwest Hospital, as well as to provide some construction services.
Thomas Obrecht, the firm’s president, is a member of the LifeBridge System board. He did not return a request for comment.
Two other commercial real estate firms have been paid by LifeBridge while their leaders serve on the system’s board.
Greenburg Gibbons Commercial Corp received about $887,000 last year for rent at different properties at Hunt Valley Towne Center and Foundry Row. Brian Gibbons, the firm’s chairman and CEO, serves on the LifeBridge Board.
Woodhaven Building & Development, Inc., whose president Martin K.P. Hill serves on the LifeBridge board, received more than $77,000 for space rented at a building in Manchester.
Some law firms have also been paid while their attorneys serve on the LifeBridge board.
Brian Moffet, principal at Miles & Stockbridge, currently serves as vice chair of the system’s board. Last year, Miles & Stockbridge did nearly $82,000 worth of work for the system.
“Miles & Stockbridge requires approval of all appointments of the firm’s attorneys to any board,” the firm said in a statement. “The firm’s attorneys also are reminded to recuse themselves from the consideration of any matter that comes before the board involving the firm. The firm does not comment on matters involving the representation of its clients.”
Abba Poliakoff, an attorney at Gordon Feinblatt, also served on the LifeBridge board. The firm was paid about $221,000 for work from LifeBridge during the 2018 fiscal year. Another Gordon Feinblatt attorney, Lynn Sassin, also serves on the board for Levindale, part of the LifeBridge system.
Barry Levin, the board’s chair did not disclose a potential conflict on his form prior to the 2018 fiscal year, but the system’s disclosure said Saul Ewing, his firm, received about $21,000 for work during the course of the year.
MedStar Health gave more than $4.7 million to firms associated with members of its various hospital boards.
In Maryland, the system includes MedStar Good Samaritan Hospital, MedStar Franklin Square Hospital, MedStar Harbor Hospital, MedStar Montgomery Hospital, MedStar St. Mary’s Hospital and MedStar Union Memorial Hospital. The system also runs three hospitals in Washington.
MedStar reviews conflicts as part of its process for adding board members. Potential conflicts are considered and could be waived by the board as part of adding a new member, or they could prevent a potential member from joining the board.
“Given the size, complexity and impact of MedStar in the community, effective governance requires that our boards reflect the community we serve and include broad expertise from various areas, such as, medicine, business, finance and the law,” the system said in a statement. “Board members with conflicts are instructed not to participate in any discussion, or action that relates to the conflict of interest. In addition, MedStar discloses all identified conflicts of interest to third parties, such as the HSCRC on a routine basis.”
Most of the money sent to firms, $4.07 million, went to firms associated with P. Justin Tortolani, a physician who also serves on the board of Union Memorial Hospital. He receives a licensing fee and serves on the Scientific Advisory Board for Innovasis and receives royalties from Globus Medical.
Another $184,000 went to Bolder Healthcare Solutions, the parent company of Receivables Outsourcing. Christopher G. Wunder was the CEO of Receivables before it was sold to Bolder Healthcare solutions and he retired from the board of Union Memorial Hospital last year.
Rebecca S. Zukowski, the executive director of Loyola Clinical Centers, also serves as a member of the Harbor Hospital board. Her husband is a senior clinical consultant for Beckton Dickinson, a large global medical technology firm, according to the financial disclosure forms. The firm received more than $262,000 from MedStar in the last fiscal year.
The University of Maryland Medical System board stands out from most other health system state for its inclusion of elected officials. Beyond Pugh, Sen. Nancy King, D-Baltimore County, and House Speaker Michael Busch, D- Anne Arundel, also serve on the board.
The board’s members are all appointed by the governor.
Michael Runnels, a professor of law and social responsibility in Loyola University’s Sellinger School of Business, drew a distinction between the responsibilities of corporations like the hospitals and of elected officials like Pugh.
“I think boards should always be mindful of perceived conflicts of interest,” he said. “If they are transparent about what they are doing, they are also accountable about what they are doing.”
But elected officials carry a heavier burden, he said.
“It’s pretty clear if you are going to say you are serving the city in any capacity, you have to do so with integrity,” Runnels said. “You cannot lead with integrity from inside a smoke-filled backroom. There’s no integrity.”