Baltimore-area hospital systems want to hire 1,000 entry-level workers and are seeking a small rate increase from the state to pay for the program.
The program, proposed by such systems as Johns Hopkins Medicine, the University of Maryland Medical System and MedStar Health, is a response to the frustration in poor Baltimore neighborhoods demonstrated by April's unrest.
"We are collectively the largest private-sector employer and we thought we could really make a push to stand up a meaningful number of jobs," said Ronald R. Peterson, president of the Johns Hopkins Hospital and Health System ahead of a presentation Wednesday for state regulators. "The primary purpose is to give people with relatively low educational attainment an entry-level job, and then give people the chance to move up over time if they so desire."
The jobs could range from cleaning floors and transporting patients to helping people with health insurance. The proposed program drew praise for including training so those without diplomas or a work history, or with a criminal record, might escape poverty through work, but the program likely faces opposition from insurers.
"A rate increase of any type is paid by the payers of health care, which means it is ultimately borne by consumers and employers," Kimberly Robinson, executive director of the League of Life and Health Insurers of Maryland, said in a statement.
The hospital systems presented the proposed program Wednesday to the state Health Services Cost Review Commission, which sets hospital rates and would have to approve any rate increase.
Peterson said the hopelessness in some Baltimore neighborhoods became palpable after the riots following Freddie Gray's death from injuries sustained in police custody. He said it felt similar to feelings he had after the assassination of Martin Luther King in 1968 and the subsequent riots, but this time there aren't good manufacturing jobs for people to return to or seek — work that could provide a good middle-class living.
The hospitals' proposal cites Baltimore's high unemployment rate of 7.4 percent in April compared with a statewide rate of 4.9 percent. The figures are far worse in some city neighborhoods, reaching 17 percent.
Baltimore City's poverty rate of nearly 24 percent in 2013 is also far higher than the 9.8 percent rate statewide.
Peterson acknowledged that the 1,000 new positions would represent a modest increase in employment at city hospitals — Johns Hopkins Hospital in East Baltimore alone employs 10,500, for example, and statewide there are more than 100,000 hospital workers.
The hospitals aren't prevented from adding jobs on their own, but under the state's unique agreement with the federal office that oversees Medicare and Medicaid to control health care costs, their spending is limited.
So they are seeking approval from the health cost review commission to bill public and private insurers more — up to $40 million a year, or $40,000 per job to be created, which would pay for salaries, benefits and training, according to a draft of the proposal.
The jobs likely would pay an average $13-$15 an hour to start.
Under the proposal, hospitals would pitch individual hiring plans beginning in January to the commission and would keep their higher rates as long as they continue to operate the jobs program.
Most of the jobs would be created in Baltimore, but any hospital in Maryland could participate. So hospitals in Western Maryland or on the Eastern Shore could create jobs drawing workers from low-income areas near them.
Included with the draft proposal were several endorsements from members of the state and congressional delegations, as well as Baltimore Mayor Stephanie Rawlings-Blake. Many lawmakers cited the link between poor health and poverty, meaning new jobs could fix more than one social ill.
"Given the number of qualifying ZIP codes that meet the criteria of the program, these efforts will make a substantial difference in improving the quality of life for many Baltimore City residents," Rawlings-Blake wrote in a letter of support.
The state's largest hospital systems joined Peterson in presenting the plan to the commission.
"Hospitals are uniquely positioned to make a positive impact — we not only provide care for our community members, but we also employ them. Together, the Maryland hospital industry hopes to be able to offer up to 1,000 new jobs with very modest changes in state regulations," said Robert A. Chrencik, president and CEO of the University of Maryland Medical System.
And Bradley Chambers, the president of MedStar Union Memorial and MedStar Good Samaritan Hospital, said: "Because of the strong correlation between poor health and poverty, we must understand and address these social determinants of health if we are to be successful."
The Maryland Hospital Association "supports the concept, which addresses an important need, and we look forward to seeing the details of how the effort can be operationalized," said Jim Reiter, spokesman for the group.
The union representing many of the service, maintenance and technical jobs at area hospitals also supports the move as a way to promote the economic well-being of city residents.
"The themes in the [commission's] proposal are ones which we have been highlighting for a long time, for example in our campaign to improve the economic security of workers at Johns Hopkins Hospital," said Pat Lippold, vice president of the 1199 SEIU United Healthcare Workers East, which represents more than 9,000 people in Maryland and Washington.
"As representatives of thousands of entry-level health care workers, we look forward to discussing how we can work with hospitals and the [commission] — particularly with our Training and Upgrading Fund, which provides services such as continuing education and career counseling to health care workers in the state," she said.
Commission members largely praised the idea, though some said there were issues to address such as how to evaluate the program's effectiveness and how to pay for the jobs.
Dr. Stephen F. Jencks, a commissioner and a heath care consultant, said hospitals might consider funding some positions out of their existing budgets.
"It's hard to see why we wouldn't want this to happen," Jencks said. "The question is how it gets funded."
The state's insurance companies, which would have to pay more, don't appear likely to support a rate increase.
While the state's largest insurer, CareFirst BlueCross BlueShield, declined to comment, the League of Life and Health Insurers of Maryland issued a statement voicing its concerns.
"While Baltimore area hospitals have proposed a laudable program, we have serious concerns about their request for $40 million in additional funds, which requires a rate increase," the league's Robinson, who also is a partner at the law firm Funk & Bolton, said in the statement. "These funds are beyond the current hospital global budgets and on top of increases already included in hospital budgets this year for programs directly related to health care. …
"We look forward to discussing this proposal with the commission and hope to identify ways to accomplish these goals within hospitals' existing rates," she continued.
The commission referred the proposal to a work group, though John M. Colmers, the panel's chairman, said the members ought to work fast. Creating the program would "send an important signal to the community."
And Hopkins' Peterson played down the total amount of rate increases needed to cover the jobs program: a quarter of 1 percent of the total revenue of the hospitals.
"I'll be the first to tell you there is a lot of pressure to control our costs," Peterson said. "But this is an investment well worth making. We're at a virtual transition point. If we don't exhibit the right behaviors, take tangible steps to demonstrate to people we are willing to give them a chance, give them an opportunity for hope, there could be a downward spiral no one wants."