State leaders served notice on Friday that they will move quickly to restore public confidence in the University of Maryland Medical System. The pledges follow two days of damaging headlines regarding the numerous members of the system’s Board of Directors who have lucrative contracts with the institution.
“That is a huge disaster right now,” Maryland Senate President Thomas V. Mike Miller Jr. (D-Calvert) told colleagues at the start of Friday’s floor session.
He said that he, Gov. Lawrence J. Hogan Jr. (R) and House Speaker Michael E. Busch (D-Anne Arundel) would be meeting with the hospital system’s executives soon to address “a lot of questions in terms of the trustees.. self-dealing, benefiting from their relationship on the board of trustees.”
In a statement on Friday, Hogan said it is “disconcerting to hear that several members of the system’s board have significant financial dealings with these hospitals.”
“These transactions for personal profit damage the public trust. It is not just unseemly, it is appalling, and I have called for an immediate and full review.”
Hogan said members of the board “should remove any and all conflicts of interest or resign. There cannot even be the appearance of impropriety.”
The three state leaders plan to meet with the board’s executive team early next week.
On Wednesday the Baltimore Sun reported that nine of the medical system’s 30-member Board of Directors — including Baltimore Mayor Catherine E. Pugh (D) — have significant financial ties to the sprawling $4.5 billion dollar network of hospitals.
Sen. Jill P. Carter (D-Baltimore City), who has introduced legislation barring such arrangements, said Thursday there is little evidence that the contracts were competitively bid.
UMMS President and CEO Robert A. Chrencik defended the system’s financial relationships with its board members in testimony before a Senate committee the day after the story broke and again in interviews with reporters.
“There is no intent to do something that’s inappropriate [or] that doesn’t comply with the rules and regulations of [the Health Services Cost Review Commission],” he said outside the hearing room.
“These contracts passed through our audit and compliance committee and then were reviewed in aggregate at one of our full board meetings.”
Chrencik said Carter’s bill would hurt the system’s ability to get savvy business leaders to serve as directors.
“If we cannot access the business community for board members, we’re competitively harmed.”
In condemning the system’s arrangements with its directors, state leaders implicitly rejected that argument.
“We’re going to solve that problem,” Miller pledged in his floor remarks. “They’re going to find a way to deal with it this session, and if they don’t, my representative is going to be a former U.S. attorney on that board, OK?”
Busch is a member of the UMMS board, but the speaker’s aides did not make him available for comment Friday.
But Del. Maggie L. McIntosh (D-Baltimore City), head of the Appropriations Committee, echoed the comments made by Hogan and Miller.
“I think we’ll be doing something next week,” she said. “This really shakes the confidence that people have in institutions. We’re pretty upset about [the reports of self-dealing].
“I know the speaker is very upset. He’s a board member himself and had really no knowledge of these kinds of activities.”