The state Civil Service Commission signed off Wednesday on a heavily revised proposal revamping information technology services at the state Department of Health and Hospitals.
Unlike a prior plan, there would be no state employee layoffs.
Various IT functions would be spread out among four different entities — DHH, the University of Louisiana at Lafayette, the University of New Orleans and a private vendor, Venyu Solutions.
DHH is projecting a $1.12 million savings over three years from the current $37.8 million expense.
DHH Secretary Bruce Greenstein said the savings are only part of the benefit of the revamped operations, which he said also should help the agency respond more timely to state health care needs.
The commission earlier rejected approval of DHH’s proposed expansion of a $16.8 million, three-year contract with the University of New Orleans to cover IT services provided in-house by 69 classified state employees.
The move would have resulted in the layoff of those employees.
At the time, Civil Service said DHH’s proposal lacked documentation that it would save money and increase efficiency.
Greenstein acknowledged the initial setback as he sought commission approval.
“You gave us some very helpful suggestions and we took those suggestions very seriously,” he said. “In this plan, there are no layoffs, which is considerably different than before.”
DHH Undersecretary Jerry Phillips said 19 employees do IT work at DHH.
Of those, eight would be transferred to UNO, which will provide user support for the system.
UNO has an IT contract that will be expanded at a three-year cost of $13.39 million.
Other employees will remain at DHH handling network administration and legacy system support, he said.
The UNO contract required Civil Service approval.
The ULL contract will be for application development, maintenance and analytics. DHH will pay $13.89 million for those services over three years.
Venyu’s contract is for infrastructure maintenance and support. DHH quoted a $1.4 million purchase order with the company.
Phillips said the state budget eliminated some IT positions and transferred part of the funding to contract expenses as part of budget cutting efforts.
“You don’t have them (positions) in your budget. How can you show savings through elimination of employees? They are already eliminated,” said Commission member Scott Hughes, of Shreveport, looking at a chart DHH provided.
“I understand what they are doing is being done by a whole lot less people, but when you get down to the 3 percent savings, it’s a conceptually difficult thing for me to understand,” added Commission vice chairman John McLure, of Alexandria.
Greenstein said that in the big picture of DHH’s $9 billion budget, a $1 million savings doesn’t sound significant.
“It’s still a lot of money” particularly when federal matching funds are involved, he said. “It’s important as an agent of the state to be a good steward. ... I have to drive the best bargain.”
It’s also something “that fits our changing needs,” he said.
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