Civil Service Commission rejects hospital privatization plans

The state Civil Service Commission on Wednesday narrowly rejected privatization plans for four LSU hospitals that would lead to the layoff of some 3,000 state employees.

Some commissioners complained about the lack of information provided by LSU as they were confronted with making such a major decision.

An LSU official said efforts would be made to get the commission to reconsider its decision prior to the planned June 24 transition from public to private operation of hospitals in New Orleans, Lafayette, Houma and Lake Charles.

Later Wednesday, the commission posted notice of a special 8 a.m. Monday meeting, at which LSU would try again to win commission approval.

More than half of the state employee layoffs would occur at LSU’s Interim Hospital in New Orleans. Layoffs are scheduled for June 24.

In anticipation of the privatization, the public hospitals have no money for operations starting July 1, said Michael Kaiser, chief executive officer at LSU Health Care Services Division. Absent commission approval, “we would need to figure out what other action we would have to take,” Kaiser said.

Shannon Templet, director of the Civil Service agency, said layoffs could be approved separately from the contracts based on a lack of funding. If LSU moves forward with the contracts after a commission denial, the commission would have standing to go to court to file an injunction challenging the pacts, Templet said.

The commission voted 4-3 against the agreements that are part of Gov. Bobby Jindal’s move to privatize hospital operations at nine hospitals in LSU’s 10 hospital system.

Contracts outsourcing jobs that traditionally have been held by state employees go before the Civil Service Commission to determine if they were entered into for reasons of “efficiency and economy and not for politically motivated reasons.”

Civil Service employees are protected from political firings.

Commission Chairman David Duplantier, of Covington, said there has been “not one scintilla of evidence to show that it is politically motivated.”

Commissioner Henry Polite Jr., of New Orleans, said the agency has “failed to satisfy its obligation” to provide essential documents the commission needs to make the determination.

“I don’t see any way I can reach a rational decision until I can see all the numbers,” said Commissioner Scott Hughes, of Shreveport. He said the commission gets “paperwork from other departments” to support a $50 salary supplement request. “This is a multibillion-dollar deal.”

Commissioners Polite, Hughes, Curtis “Pete” Fremin, of Morganza, and Sidney Tobias Jr., of New Orleans, voted against the contracts. Commissioners Duplantier, John McLure, of Alexandria, and G. Lee Griffin, of Baton Rouge, voted for the deals.

LSU’s Kaiser said the commission would be provided with the agreements the LSU Board of Supervisors approved with the private companies. Those agreements have been criticized for a lack of key financial details.

“We are going to ask them to reconsider,” Kaiser said.

Just more than 3,500 employees work at the four hospitals, and 2,953 are classified, or rank-and-file, employees protected by Civil Service. The remainder are unclassified and do not have Civil Service job protection.

Here’s the breakdown by hospital of Civil Service employees facing layoffs:

1,690 at the Interim Hospital in New Orleans; 487 at the University Medical Center in Lafayette; 556 at Leonard Chabert Medical Center in Houma; and 220 at W.O. Moss Medical Center in Lake Charles.

The operation of all the hospitals are being taken over by private hospitals in the cities where they are located under deals reached among the private entities, LSU and the state Department of Health and Hospitals.

Previously, the Civil Service Commission approved employee layoffs at Earl K. Long Medical Center in Baton Rouge. The hospital closed April 15 with inpatient and outpatient care as well as medical education programs moved to Our Lady of the Lake Regional Medical Center.

Brad Ott, head of the Advocates for Louisiana Public Health Care, said LSU had not provided all the financial details to the Civil Service Commission. He challenged projections of savings from the hospital privatizations, noting the Houma hospital has been running surpluses.

Leonal Hardman, president of Council 17 of the American Federation of State County and Municipal Employees, urged the commission to take its time. “Don’t get into a CEA (cooperative endeavor agreement) that we have to fund that ends up being a blank check,” Hardman said.