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May 14, 2013
More than 5,000 employees with six hospitals under the Louisiana State University purview will be laid off at a cost approaching $42 million to the state as the public facilities’ operations are relinquished to private partners, according to a report released by the state legislative auditor.
The transition would cost the LSU system roughly $29 million in termination pay and $13 million in unemployment costs, the report estimates. An additional $26 million to the state in annual legacy pay would likely arise from the deals.
“(LSU’s Health Care Services Division) will have limited future income to pay health benefits legacy cost and the termination and unemployment cost was not planned for in the 2013 budget,” the report states. HCSD is aware of the costs and is working with the Jindal administration to secure funding, it continues.
Legislative Auditor Daryl Purpera’s office released the report last week to the state senate president and house speaker as lawmakers prepare to take up hospital privatization in the current legislative session.
Debate remains as to whether legislative approval is needed to finalize the deals, but state Attorney General Buddy Caldwell affirmed The Jindal administration’s and LSU system’s contention they do not need approval because the state would lease, not sell, the facilities.
Chabert Medical Center in Houma is one of four LSU hospitals tentatively scheduled for privatization by June 24, the deadline for the state savings to be reflected in next year’s budget. Washington-St. Tammany Regional Medical Center, still in discussions with an undisclosed partner, would be a fifth, and Earl K. Long Medical Center has already been privatized.
Of the 5,804 active employees in the partnering LSU hospitals as of mid-February, 810 worked for Chabert Medical Center, the report says.
Every active employee at the partnering hospitals will be laid off. Each will be permitted to reapply for their positions, which are not guaranteed.
“Based on available information provided on April 16, 2013, Our Lady of the Lake has hired 314 of the (515) Earl K. Long employees,” the report says. “As of April 22, 2013, the partners for Walter O. Moss, University Medical Center, and Medical Center of Louisiana at New Orleans are accepting applications. Leonard J. Chabert’s partners are expected to begin the application process soon.”
Regardless of legislative approval, the deals still need approval from three entities. The LSU Board of Supervisors, Division of Administration and private partners must finalize cooperative endeavor agreements; the Centers for Medicare and Medicaid Services have to amend the state’s Medicaid plan to authorize the partners for reimbursement according to the agreements; and the Department of Health and Hospitals must issue operating licenses to the partnering hospitals.
The LSU system does not anticipate any services at Chabert to be eliminated, according to the report. In his opinion concerning legislative approval of the deals, Caldwell suggested adding a provision to the agreements preventing the private partners from reducing the current levels of service.
