Hospital Privatization in Louisiana Leads to Hundreds of Lost Jobs, Lower Pay, Less Benefits

By Marsha Shuler
Capitol News Bureau, July 21, 2013

About 3,800 rank-and-file state employees lost their jobs during the fiscal year that ended June 30 as state government’s workforce continued to shrink, according to a state Civil Service report issued Thursday.

The layoffs affected nearly 10 percent of the state’s classified employees during the 2013 fiscal year.

Most of the civil servants lost their state jobs when the Jindal administration privatized operation of LSU hospitals in south Louisiana. Layoffs affecting classified employees of LSU hospitals in Baton Rouge, New Orleans, Lafayette, Houma and Lake Charles accounted for 2,237 layoffs of the 3,805 total.

A Jindal administration spokeswoman said Thursday that most of the employees who lost their state jobs are now on the payroll of the private entity that took over LSU hospital operations in their communities.

Another nearly 1,000 employees lost jobs with privatization of state facilities for the developmentally disabled in Hammond and Bossier City and at another facility for those with mental health problems in Mandeville.

The number of individuals losing their classified jobs in state government has totaled 6,005 since Jindal took office in 2008, according to the latest Civil Service report.

In response to a request for comment, Gov. Bobby Jindal issued a prepared statement, which read, in part: “Today’s Civil Service report is consistent with our efforts to chart a path that expands economic opportunities for our people while reducing government’s footprint.”

The Civil Service report only covers employees in the classified service, those who have job protection in exchange for not engaging in political activity.

There is no similar report on how many unclassified employees — those subject to hiring and firing at will — have lost jobs as a result of privatization since Jindal took office.

The total state employee workforce — classified and unclassified — has dropped by 28,000 since Jindal became governor, according to Civil Service statistical reports.

Since the 2008-09 state fiscal year, the number of classified jobs has been reduced by about one-third and unclassified jobs by about one-fourth. The reduced number of positions include both layoffs of existing workers and those jobs not filled when people left through retirement or other employment.

In 2008-09, there were 61,593 classified jobs. Today, there are 41,819.

In 2008-09, there were 38,880 unclassified jobs. Today, there are 30,446.

Also, classified employees make an average of $20,000 less than unclassified employees, $42,141 to $63,470 respectively, according to Civil Service statistics. Political appointees and higher education administrators are included in the unclassified sector.

“In addition to shrinking the size and cost of state government, we are making government more effective and efficient by consolidating functions and applying smarter technologies that save taxpayer dollars,” Jindal stated about the downturn in state workforce. “Louisiana is among the top 10 states for private sector job growth since 2008.”

Since Jindal took office in 2008, just over 6,000 Civil Service employees have been laid off, according to the latest update. The number of positions targeted for layoff during the period was 10,359.

During the just-ended fiscal year, 6,270 positions had been targeted for layoffs.

The actual number of employees laid off — 3,805 — is less because some positions may have been vacant or employees left prior to the effective date of the layoff, Civil Service officials said.

Most of the LSU hospital layoffs occurred June 24 as private hospital entities took over management and operations at four facilities.

Jindal’s office provided statistics showing that almost 86 percent of the employees losing state jobs at the four hospitals were rehired by the private management. The administration used the employee number as of May 16 prior to the transition to do the comparison.

All told, 571 LSU hospital employees did not get rehired out of 3,974 impacted at the four hospitals. Most of those not rehired were at University Medical Center in Lafayette and W.O. Moss Medical Center in Lake Charles, according to the administration.

“There were also a significant number of people who were eligible to and did retire,” according to a statement released by the administration.

“The hiring process at these partner hospitals is ongoing, so the number of former state employees hired by them may continue to grow.”

American Federation of State County and Municipal Employees-Council 17 President Leonal Hardman said there is no guarantee that employees are actually rehired. He said his group will be watching the situation closely.

Hardman said the former state employees may have jobs “but what kind of quality of life … We know the salaries and their benefits are not there.” Gone, he said, is “the quality of life you and your family are accustomed.”

Marvin McGraw, LSU Health Care Services Division communications director, said the agency does not have access to the private salary and benefits information.

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