Baltimore residents living in struggling neighborhoods hard hit by riots last April will be able to apply for 375 new jobs at area hospitals thanks to an initiative approved by state hospital rate regulators.
After three months of debates and hearings, state regulators reached a last-minute agreement on Wednesday requiring participating hospitals to pay a share of the cost of the program and the rest to come from hospital rate increases. The plan calls for as much as $10 million in annual rate increases and $5 million a year from the hospital budgets.
Administrators at Johns Hopkins Hospital had called for 1,000 new jobs in an effort to counter the despair they witnessed in the unrest last spring over Freddie Gray's death a week after he suffered a severe spinal injury while in police custody.
Even though the job creation goal was lowered, the plan drew praise from supporters who view the positions as essential to lifting up communities with few opportunities.
"We really see systemic challenges in Baltimore, and someone just saw the ability to address it," said Andrew Foster Connors, senior pastor at Brown Memorial Park Avenue Presbyterian Church. "It's less than the number of jobs we wanted, but it's a great start."
The pastor is also co-chair of the interfaith community organization Baltimoreans United in Leadership Development, or BUILD, which had rallied for the jobs and brought supporters to meetings of the state Health Services Cost Review Commission, which sets hospital rates and approved the jobs plan Wednesday.
BUILD officials said they hope other businesses in Baltimore follow suit and create the other 625 jobs.
The jobs are expected to cost about $40,000 each, with an average pay of $15 an hour. The jobs would come with benefits, training and opportunities for advancement. The new positions include community health workers who would connect people to health care and insurance counselors who would sign people up for coverage.
Hopkins and other hospitals had proposed raising their rates by $40 million a year to pay for the jobs, but the commission cut the amount and told the hospitals to put up some of their own funds.
The deal was struck by commissioners who had debated how much to raise rates, if at all. The commissioners and the agency's staff had voiced support for desperately needed jobs but also concern about forcing ratepayers, including public and private insurers, to pay.
The insurers, including CareFirst BlueCross BlueShield, opposed the rate increase and warned that the added cost would be passed on to its customers, including individuals and employers. The state health department, which runs the Medicaid program, also opposed a rate increase.
CareFirst, the state's dominant insurer, declined to comment on the plan, as did a representative from the League of Life and Health Insurers of Maryland.
The insurers supported a scaled-back recommendation from commission staff that called for $5 million in seed money from rate increases, and no further funding. To cover those salaries in the future, the staff recommended hospitals dip into their budgets, philanthropic efforts, or savings from preventative health initiatives aimed at keeping people healthy and out of hospitals.
Commissioner Thomas Mullen, president and CEO of Mercy Medical Center, said that wasn't the "right balance."
"I think we should do more," he said. He proposed the alternative $15 million plan just as commissioners were set to vote on the staff recommendation.
During the months of deliberations, Hopkins and the University of Maryland Medical System had offered to put up their own money and match up to 20 percent of the rate increase.
Hospitals choose whether to participate, and the number of jobs created could be lower than hoped if not enough do.
Stuart Erdman, a Hopkins consultant, said the bigger hospital systems are likely to still participate in the jobs program, but smaller, independent hospitals may find the contributions too high. Hopkins has already used its own budget to hire 130 disadvantaged people, including some ex-offenders. He said overall the plan was a good compromise.
"If they had taken no action, it would have resulted in no jobs," said Erdman, who is also former director of finance for the Johns Hopkins Health System. "Now people will be employed."
While commissioners plan to review the plan in two years, the program doesn't have an expiration date.
The hospitals believe that in addition to shoring up the economies of struggling neighborhoods and giving residents a sense of hope, the initiative could also improve community health and save the health system money.