Hospital operator nixes pension freeze

The president of Prince George’s Hospital Center said yesterday officials have scrapped a plan to freeze employees’ pensions, though the company still faces a financial shortfall of millions of dollars per year.

The announcement came as unions for workers at Dimensions Healthcare System, which employs about 2,000 workers, planned to begin picketing yesterday at Prince George’s Hospital Center, Laurel Regional Hospital and other company facilities.

“We’re happy to get it off the table,” said John A. O’Brien, who was named hospital president in September.

The proposed pension freeze was projected to save the struggling health system $5 million a year at a time when the nonprofit organization faces pressures to cut costs and boost revenue. Last year, the company received a $45 million bailout from the Maryland and Prince George’s County governments.

Dimensions has lost tens of millions of dollars since 2000. Last year, an oversight panel recommended that county officials fire Dimensions, which runs the hospitals through a lease agreement with Prince George’s County.

But Mr. O’Brien said Dimensions is overhauling operations under new management.

“People have been saying the right thing for years,” he said. “They’ve challenged Dimensions to show leadership improvements. It’s become obvious already that this organization is improving itself, and the policy-makers are responding.”

It remains to be seen where the company will find the $5 million in savings it projected by freezing pensions.

Mr. O’Brien said management and union leaders agreed to look elsewhere in the organization for “cost savings and revenue enhancement.” But he said officials are still negotiating the details.

“We’ve been saying since June that it’s not about how you save $5 million, it’s about how you deal with these much deeper financial challenges,” said Michelle Healy, vice president of 1199 SEIU United Healthcare Workers East, Maryland/D.C. Division, which represents more than 1,500 employees at Dimensions.

Miss Healy said union leaders are hoping Dimensions can lift itself out of financial trouble by partnering with an academic institution, such as the University of Maryland Medical System.

“Everyone and their mother has come to the conclusion that they need to partner with an academic medical center,” Miss Healy said.