Leonal Hardman, head of the union local that represents about 3,000 public employees in Louisiana, goes into Labor Day 2011 seeing his members’ jobs under assault — sacrifices on what he calls the “altar of privatization.” And that riles the president of the American Federation of State, County and Municipal Employees, AFL-CIO, Louisiana Council 17.
Particularly, during a tropical-storm weekend. It’s those very people — whose work is routinely diminished by the governor’s supporters — who are likely to be called away from their families to handle an emergency, Hardman said.
Earlier this year the Reason Foundation, a Los Angeles-based think tank that supports contracting out public services, called Gov. Bobby Jindal a national leader in aggressively advancing “a variety of privatization initiatives across a broad swath of state services.”
In short, Jindal wants to pay private companies to do much of the work public employees have been performing. His aides argue that privatization can save money and result in better services. The administration has been contracting out government work on a number of fronts.
For instance, just last week, the Jindal administration awarded a contract to Magellan Health Services Inc. of Avon, Conn., to handle management of care for mental-health and addicted-disorder patients. The administration is also looking at turning over management of health care for a sizable majority of people on the state-federal Medicaid program to the private insurance companies.
The most-politicized possibility, however, is the Office of Group Benefits, called OGB, said State Treasurer John N. Kennedy.
The OGB oversees health-care coverage for about 226,000 public employees, retirees and their families. It does so with about 309 employees and at a cost of about $70 million, according to Division of Administration calculations included an Aug. 24 audit by the Louisiana legislative auditor.
The OGB privatization effort has been targeted by some legislators.
Kennedy says part of the problem is that OGB came on the heels of Jindal’s efforts to privatize some prison projects using financial reports that, at least in his mind, failed to show enough benefits. Jindal’s aides vociferously disagree with that assessment, producing data that they say shows what a great idea it is to privatize some prisons.
“Both sides have some reasonable points,” about the OGB privatization, said Kennedy, a Republican. “But the burden is on the proponents of privatization to prove that it can be done cheaper without impacting the quality of service and without raising the price of the product.”
Health insurance is very complex, with multiple layers and few clear answers, said Steve Monaghan, president of the Louisiana Federation of Teachers.
Monaghan — and Hardman agrees — says he’s not against privatizing OGB. Both labor leaders say they want an analysis that clearly points out the benefits.
But the conversation is being colored, Monaghan says, “by the politics of division, … where teachers and other public employees are vilified and lifted up as an enemy.”
Many school districts didn’t require their teachers to pay into the federal Social Security and Medicare systems, he said. So thousands of teachers will have to rely on OGB to provide health coverage in retirement, Monaghan said last week.
“The guarantee from the state is their only safety net,” Monaghan said. “I have real serious concerns of how this will play out.”
Commissioner of Administration Paul Rainwater said when comparing the costs and services in other states with those in Louisiana, the administration owes taxpayers and state employees the effort of checking to see if a more cost-effective way exists.
The first step is hiring a financial specialist to look at the situation. “We’re still negotiating that contract,” Rainwater said last week.
It’s a multiple-step process that can be sidelined at any time if the administration doesn’t like the answers it gets from the review, Rainwater said. If the cost analysis shows little savings; if state government can’t protect benefits in a contract; if the premiums increase significantly; if the services provided don’t improve; “Then, we don’t move forward,” Rainwater said.
“We have said that time and time again but probably not as clear and as simple as I just said it because we get lost in the two-hour conversation” over the complexities, Rainwater said.
Mark Ballard is editor of the Capitol news bureau. His email address is email@example.com.