Nonprofit set to take over facility June 24
Although most of the employees at the Interim LSU Public Hospital in New Orleans will lose their jobs later this month, the private nonprofit that will manage the safety-net hospital has offered new positions to the vast majority of workers who have applied.
Brian Landry, spokesman for Louisiana Children’s Medical Center, said about 1,900 employees submitted applications to remain at the hospital. Around 1,800 of those people have received job offers, although exactly how many will accept the positions is not yet clear.
The nonprofit company, which runs Children’s Hospital and Touro Infirmary, will take over operation of the public hospital on June 24. When that happens, that hospital will essentially become a subsidiary of Louisiana Children’s Medical Center, with employees being paid by the private entity.
The state Civil Service Commission on Monday gave the final governmental approval of the transfers, signing off on proposals to lay off more than 3,500 state workers at four hospitals in south Louisiana. Nonprofit hospitals have also agreed to take over management of LSU hospitals in Lafayette, Houma and Lake Charles.
“Our desire is to hire as many of the employees as possible,” Landry said. State officials earlier this year estimated there were more than 2,000 employees at the hospital, although some have left in recent months.
The employees who would be making the switch include all the people who run the hospital — from administrators to nurses to technicians — but not the doctors, who are largely employed by LSU.
Those doctors will maintain their relationship with LSU and staff the hospital, where they teach medical school students and residents.
As part of the takeover, Louisiana Children’s Medical Center has agreed to make annual lease payments to the state. These payments are both for the interim hospital, better known as University Hospital, and the $1.1 billion hospital under construction along Canal Street in Mid-City.
As part of the deal, the company also agreed to put up $253 million to build an ambulatory care building and a garage, which will be considered an advanced lease payment.
The idea behind the moves to privatize management of the public hospitals, which provide health care to Louisiana’s poorest citizens, is that the lease payments can be used to match federal Medicaid dollars necessary to provide care for the uninsured.
Gov. Bobby Jindal’s administration, which has pushed the plan along with LSU hospital leaders, estimates that if nine of LSU’s hospitals are privatized, it will save the state $100 million, although that figure was met with some skepticism during the recent legislative session.
Jindal administration officials have said the move is necessary after Louisiana was hit with a steep Medicaid cut this past summer.
For hospital employees, the switch to private management means they will lose their state benefits. LCMC has come up with a benefit package that is similar to what is provided to workers at Children’s and Touro, Landry said, while seeking to make the salaries “very competitive.”
Some employees could end up with a pay bump after the switch, while others will see a decrease, he said.
“This has been terribly stressful for them, and we all understand that,” he said.
But Landry emphasized that while there are some jobs that won’t be filled, Children’s isn’t embarking on a massive restructuring. When LCMC took over Touro a few years ago, the company sought to retain as many of the existing employees as possible, making changes as people left their jobs.
Leonal Hardman, president of Council 17 for the American Federation of State, County and Municipal Employees, said benefits are a matter of real concern for many state employees, particularly those who are near retirement. At the civil service hearing, he said one New Orleans hospital worker said she’s near retirement, but would have to spend $65,000 to become fully vested before she loses her job later this month.
“Tell me those employees have that kind of money to do that,” Hardman said.
Trey Boudreaux, assistant director of the Louisiana State Employees’ Retirement System, said laid-off workers have the option to keep their money in the pension system or pull out their contributions when they leave state employment.
The system estimates that as many as 2,000 of all the hospital employees around the state could end up taking retirement or early retirement.
Some people who are a few years short of being eligible to retire with a full pension could end up having to take early retirement at a much reduced benefit, Boudreaux noted.