In a 3-2 vote, the state Civil Service Commission approved one of Gov. Bobby Jindal’s long-sought privatization initiatives, one that produced much controversy during more than a year of furious debates in the State Capitol.
The commission’s vote approves the Jindal plan to hire a private company — Blue Cross/Blue Shield, the state’s largest health insurer — to run an insurance plan in the Office of Group Benefits.
This remains controversial, as the close vote indicates. The move eliminates 177 full-time jobs in OGB, even though there has been little argument that the office has done anything less than a good job. Employees don’t like this idea, and hired lawyers to fight it.
But the controversy obscures a powerful point raised by Commissioner of Administration Paul Rainwater: Only Utah among the states has state workers administering health plans.
All too often, state government fails to learn from the outside world. In this case, does it make sense to maintain more state workers doing work that can be outsourced?
Throughout the discussions on this proposal, there has been an almost naïve notion that Jindal’s view of privatization is limited to saving money. He favors smaller government, and that means — because much of the cost of government is personnel — fewer state employees.
Louisiana still has significant numbers of state employees, and Louisiana still will pay significant amounts of money to administer services, such as insurance, for its employees.
But this move is part of Jindal’s vision of change in state government, even if he does not articulate it in this way: Government should be an overseer of contractors rather than an employer directly.
For one thing, as with the governor’s proposals in the most recent legislative session, that means fewer employees as long-term pension liabilities for the state.
In this relatively modest case, the state will save about $9 million a year, and about the same amount will be saved by school boards and state employees as payers of premiums for the insurance.
While those figures are disputed by Jindal’s critics, this move is likely to be the wave of the future. Jindal did not invent this trend of privatization, as indicated by the fact that most state employees got insurance through plans already administered by private contractors. But he’s not going to shrink from its impact on state employees, if he can wring some savings from the state’s general fund.
Jindal and his predecessors are likely to look for other offices where the role of the state can be transformed from a direct provider of services to an oversight function through private contractors.