About two weeks ago, board members of the nonprofit corporation created to run three Prince George's County health facilities declared that the corporation did not have the money to meet the wage demands of striking nurses.
But that same board a short time before had voted to pay its 28 members $250 for each board meeting attended, plus $100 for committee meetings. That action could cost Hospital and Health Care Systems Inc. a minimum of $36,000 for just six board meetings through July 1984. In addition, Ken Duncan, the corporation's vice president and chief executive officer, is paid approximately $100,000 to run the daily operations of the three facilities, according to two board members. Members of the former county Hospital Commission, the agency that ran the health facilities until July, were not compensated.
Nurses at the three hospitals, who are striking because they do not wish to accept the 35-cent per hour raise offered by the corporation, are not happy about the board's pay incentives. "It's appalling," said Paula Singer, executive director of the Maryland Nurses Association, the parent organization of the union representing the 650 registered nurses at the three facilities. The nurses are asking for a 11 1/2 percent increase over one year, compared with the corporation's 7 percent offer for two years.
The approval of the compensation package, one of the first actions of the new corporation, comes at a time when the organization has been telling the nurses that it does not know what kind of revenues to expend in the following year and wants to spend very carefully.
Some board members felt that $250 a meeting was "excessive," said Meyer M. Emmanuel, the board's finance committee chairman. Emmanuel, a former state senator, said that while he has served on boards of many organizations, "this is the first time I've ever received compensation." While he considers the payments "a bit high," he said, he would probably not turn the money down.
Board members at other local non-profit hospitals say that such compensation is unusual. Henry O. Lampe, chairman of the board at Arlington Hospital, said this week that none of his board members are compensated. He attended a national meeting of community nonprofit hospitals recently and found that few of those institutions paid their board members.
Clark L. Glenn, executive secretary of the board at Greater Southeast Hospital, said none of the board members at his hospital are compensated.
Robert J. Brady Jr., president of the Prince George's corporation, said last week, however, that he considers the compensation reasonable because members are expected to put in many hours of their own time to help run the hospitals.
"We have been asked to run a $100 million-a-year corporation," he said. He also pointed out that some board members do not have the freedom "to come and go as they please," and must give up paid time from their regular jobs to attend meetings.
The nurses' strike, called Aug. 29, was the first crisis for the two-month-old corporation, which operates the county's largest hospital, Prince George's General, along with Greater Laurel-Beltsville Hospital and the Bowie Health Center. A strike was called when the corporation and nurses could not agree on contract provisions. The strike has involved about 70 percent of the registered nurses.
The nurses have charged that management has engaged in unfair labor practices and contend that patient care is suffering in their absence. Hospital officials, countering that some of the nurses' demands were unreasonable, say that the medical facilities are running smoothly with the help of volunteers, employes working longer hours and new nurses who have been flown in from other states.
Last July 1, the corporation board signed a lease with the county to run the three facilities, which in the past often suffered from a lack of funds. Many thought private management would be more efficient because political or financial constraints of county government would not be a factor.
Assistant county attorney Ralph Grutzmacher said the lease calls for the corporation to pay the county $3.5 million a year for the first three years and $2.5 million annually for the next seven years for use of the buildings.
"This is $3 million over and above what we expected to pay," Brady said, noting that the additional charge was added on because of the county's budget problems. The corporation also paid an additional $600,000 for transition costs and for assets such as the hospitals' malpractice trust funds. The corporation also inherited Prince George's General's obligation to provide free health care to indigent patients.
The corporation purchased the assets and debts of the health facilities, including about $2.6 million in profits that the hospital made last year. Days before the strike, Duncan said that management needed to be fiscally conservative because it could not predict how healthy revenues would be. He said he was concerned that the number of patients this summer has dropped 5 to 10 percent from a year ago.
Finance chairman Emmanuel noted that most members of the board of directors are new at running hospitals and were worried that they could not afford to meet the nurses' wage demands. "We may or may not have the money, but we are scared to death to spend it," he said.
Under the new lease, the corporation is also bound to existing employe contracts. Last June, the county settled a contract with Hospital Employees Local 63, which represents the largest number of employes, including licensed practical nurses and clerical, housekeeping and maintenance personnel.
Labor negotiators for the county began the contract talks with the registered nurses last February, but because the county made it clear there would be no cost-of-living increases, nurses' union officials say they were encouraged to settle other contract issues and to extend the contract deadline beyond July 1 so that money issues could be discussed with the new corporation.
Union president Carolyn Larkin said last week that she felt "betrayed" by corporation president Brady, saying he had led the union to believe that the corporation would be willing to give them substantial pay increases. Brady said that he did promise the nurses he would work with them, but said that he had not made any firm financial commitments.
The idea of running Prince George's hospitals with a private, nonprofit organization had been developing for seven years before it became a reality. In 1976, Winfield Kelly, then county executive, created a "superboard" called the Hospital Commission to oversee operations of the three facilites. But most of the control rested with the county executive.
When county executive Larry Hogan, a Republican, came into office, he declared that a politically independent group could run the hospitals better and more cheaply than the county.
Ann Lombardi, then a member of the County Council, agreed with Hogan--to a point. She said that the health facilities were indeed political footballs and when they lost money, county executives tended to freeze hiring and cut off funds. This often resulted in losing important medical personnel who could not be replaced.
"Quality control went right out the window," Lombardi said, recalling an instance when Prince George's General sent home a lab equipment repairman to avoid having to pay overtime pay, leaving the county's biggest hospital without lab service for several days.
But Hogan and Lombardi did not agree on the solution to the problems. Hogan wanted to bring in the Hospital Corp. of America, a large national for-profit organization. He insisted that health care professionals were need to run the facilities, but many in the community balked at having a group of outsiders run their hospitals.
Lombardi headed a task force of county residents who drafted a plan for a new nonprofit corporation that would be composed of local business, community and medical people. Hogan called the idea "a disaster," but at the behest of the County Council, signed the new corporation into law in July 1982.
Lombardi's committee then chose the first 15 board members, several of whom are well-to-do and politically connected in the county. Brady, the president of the board, is a lawyer who owns a computer software company. Brady and board member Jack Long also served on the old Hospital Commission.
The nominees, approved by the County Council, incorporated and then chose fellow members for the 28-member board. The directors include the county heads of health and social services and the chief medical officers of the three facilites. Former county commissioner Francis J. Aluisi is chairman of the new board.
Lombardi, who decided to stay on the sidelines after the corporation was created, says the group is strong. While members are not experts in hospital administration, "they have the ability to read a balance sheet and assess needs before expanding," she said.