Louisiana Gov. Bobby Jindal's administration won approval Wednesday from the Civil Service Commission for the privatization of the LSU hospitals in Shreveport and Monroe, which will remove nearly 3,300 people from state employment rolls.
The 4-1 commission vote was the final step needed for the Oct. 1 start date of the outsourcing contract and allows the university system to lay off 3,262 hospital workers at LSU Medical Center in Shreveport and the E.A. Conway Medical Center in Monroe.
Those employees can reapply with the nonprofit research foundation that will take over management of the hospitals.
John Dailey, vice chancellor of LSU Health Shreveport, said more than 90 percent of employees who sought to remain in their jobs are being rehired by the Biomedical Research Foundation of Northwest Louisiana, or BRF.
At least 600 hospital workers applied for retirement rather than reapply for their positions, and LSU officials acknowledged those who transfer to BRF employment will have lessened benefits and less lucrative retirement packages.
Dailey told the commission, which is the state's human resources agency, that turning over the hospital management to BRF will maintain medical education programs andhealth services for the poor and uninsured, while also cutting state government costs.
"The only way to preserve the vital training programs and to preserve the safety net system has been to entertain these various partnerships," Dailey said.
Leonal Hardman, a union representative of the public employees, criticized the Jindal administration
as repeatedly targeting public employees to cut the state's budget.
"Not everyone is going to get a job. Let's be honest about that," Hardman said.
Jindal chose to levy most of a federal Medicaid financing reduction to the state on the LSU public hospital system. He's pushed to privatize nearly all university-run hospitals and clinics, saying the state's charity hospital model of health care was outdated and too expensive. He estimates the privatization deals
will save Louisiana
$125 million this year.
The Civil Service Commission is charged with overseeing layoff plans for contracts that would outsource the work that had been done by state employees.
The commission has agreed to management contracts for seven of the 10 LSU hospitalsand their affiliated clinics so far, and the Jindal administration plans to seek the panel's backing for two more hospital deals.
The Shreveport and Monroe deal is different than the other hospital agreements, which turned over management of the facilities to private hospital operators in the local community.
In contrast, BRF has never run a patient care facility.
The no-bid contract will have an arm of the research foundation, which is led by one of Jindal's appointees to the LSU Board of Supervisors, paying the state $39 million annually to lease the hospitals.
Dailey said BRF already helps LSU with recruitment, planning and lab space. He described the privatization contract as a "natural extension of our relationships, which dates back many years."
Voting for the privatization plan were commission members Scott Hughes, John McLure, Lee Griffin and David Duplantier, chairman. Voting against was Pete Fremin. Two other members were absent.