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Archive for the ‘Privatization’ Category

Tomorrow (Aug. 15) is the last day for 24 employees of the Office of Group Benefits (OGB) but the bad news doesn’t end there, LouisianaVoice has learned.

Commissioner of Administration Kristy Nichols’ glowing guest column about the condition of OGB in Jeremy Alford’s Louisiana Politics notwithstanding, some 230,000 state employees, retirees and their dependents are in for some serious sticker shock.

http://lapolitics.com/2014/08/nichols-ogb-prepared-for-changing-world-of-health-care/

Even as Nichols babbled on about providing “better service and care to its members” while at the same time employing the by now tired and time-worn Jindal tactic of blaming everyone but Jindal for rising health care costs, the Legislative Fiscal Office was dropping a bombshell in announcing dramatic increases in health care insurance premiums for state employees coupled with benefits that will be undergoing deep cuts.

OGB Report_July 2014 FOR JLCB

Blaming the Affordable Care Act (Obamacare) and an aging population for rising health care costs, Nichols said “financially responsible practices” are necessary to continue providing benefits. She conveniently neglected to mention that it was the Jindal administration’s decision a year ago to lower premiums as a means of lowering the state’s 75 percent match, thereby freeing up money to plug gaping holes in Jindal’s makeshift budget.

That move, of course, help decimate OGB’s reserve fund. What started out as a $540 million surplus a year ago now stands at less than half that.

“At first glance it may seem like having a fund that large is a great thing,” she wrote. “But in reality, keeping hundreds of millions unnecessarily locked up in a reserve fund was not the best use of taxpayer money.

“Considering that the state funds 75 percent of member premiums through taxpayer dollars, letting that large of a balance sit unused meant that those funds weren’t being used for other important projects,” she said.

Nichols, of course, overlooks the fact that successful insurance companies keep health reserve funds in cases of a natural disaster or major epidemic. Companies who only manage to pay claims out of premiums on the other hand, traditionally don’t survive.

Her entire 800-word piece never once mentioned that state employees and retirees would soon be asked to pay significantly higher premiums for equally significantly reduced benefits. Instead, she parsed words, saying, “Plan changes for fiscal year 2015 are estimated to lower expected claims costs by $131.8 million…”

That sounds pretty good until you read the first page of the nine-page report released Monday by Legislative Fiscal Officer John Carpenter and Legislative Fiscal Office Section Director J. Travis McIlwain.

State employee health plan changes, according to the report, include, among other things:

  • An increase in premiums state employees and retirees pay for health coverage;
  • Significantly increase the out-of-pocket maximum for all health plan options;
  • Increasing deductibles for all health plan options;
  • Increasing co-pays 100 percent for those proposed health plans with co-pays;
  • Increasing the out-of-pocket maximum for the prescription drug benefit by $300 from $1,200 to $1,500 per year, a 20 percent increase;
  • Requiring prior authorizations for certain medical procedures;
  • Eliminating the out-of-network benefit for some health plan options;
  • Removing all vision coverage from the health plan options.

The latest premium increase of 6 percent will go into effect on Jan. 1 is on top of a 5 percent increase implemented on July 1 of this year.

Of course, the revamp of OGB premiums and benefits was the result of the infamous Alvarez & Marsal (A&M) study.

The really amazing thing about that is Jindal rushed into the OGB privatization convinced he could do no wrong and that his was the only way and that the state was going to save millions. Yet, when things started going south, he calls in the big A&M guns.

Not only that, he forked over $199,752 to A&M to learn the best way to screw state employees.

Speaking of A&M, the contract with the firm was originally for a little more than $4.2 million but was promptly amended by $794,678, bumping the amount up to a cool $5 million. The problem with that is state law allows only a one-time contract amendment of no more than 10 percent without legislative concurrence. The amendment was for 18.9 percent.

As if that were not egregious enough, the Division of Administration subsequently amended the contract by yet another $2.4 million in May—again without bothering to obtain the legally mandated concurrence from the legislature.

Nothing, it seems, is beneath this administration.

Well, don’t say you weren’t warned. LouisianaVoice said before the OGB privatization ever took place that it would be necessary to raise premiums or lower benefits.

But Jindal, wunderkind that he is, insisted his privatization plan, ripped straight from the pages of the handbook of his only private sector employer, McKinsey & Co., would be more cost efficient than having those lazy state workers process claims and that the state would save money.

And lest you forget, McKinsey advised AT&T in 1980 there was no future in cell phones.

And of course, McKinsey developed the flawless business plan for Enron.

To a degree Jindal is correct; the state will now save money—on the backs of state employees.

State Rep. John Bel Edwards (D-Amite), who is an announced candidate for governor in the 2015 election agrees.

“The OGB fiasco is proof positive that privatization for the sake of privatization is foolish,” he said. “A reserve balance that recently exceeded $500 million is half that now and  bleeding $16M per month due to mismanagement and budget chicanery, and the ultimate price will be paid by state retirees and employees through higher premiums, higher co-pays, higher deductibles, and higher co-insurance in exchange for fewer benefits, more forced generic drugs, and more preclearance of needed treatments and other changes that make crystal clear that the OGB beneficiaries will pay more for less.”

Bingo! And right on cue, Carpenter’s report echoed Edwards:

“The health plan and prescription drug plan policy changes…will shift more of the costs from the state to the OGB plan member,” it said.

That shift will save the state a minimum of $44.7 million for health plan changes and at least $69 million for prescription drug plan changes in fiscal year 2015, the report said.

“Along with premiums, the major costs incurred for medical services by an OGB plan member will be deductibles, co-payments and coinsurance,” it said. “The new health plan offerings will significantly reduce the cost to OGB, while the OGB members pay more for their medical services.”

Of the total OGB population, 75 percent are currently enrolled in the HMO plan which presently has no deductible for the employee but those members will, effective January 1, be subject to both a deductible and coinsurance whereas most are currently subject only to fixed co-pays.

 

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When the Department of Health and Hospitals released its “Public-Private Partnership” financial report on nine state hospitals last month, it was pretty much assumed that the state media would accept the glowing report at face value and trumpet the Jindal administration’s brilliance in the privatization plan.

To no one’s surprise, Jindal cheerleader Scott McKay, curiously writing under the pseudonym “MacAoidh,” which he explained was the Gaelic spelling of his name, jumped out in front of the parade. Close behind were Lauren Guillot of the LSU Reveille and Chris LeBlanc of the Thibodaux Daily Comet.

http://www.lsureveille.com/news/hospital-privatization-cost-million-less-than-budget/article_aba78c98-12c6-11e4-9da3-0017a43b2370.html

http://www.dailycomet.com/article/20140724/ARTICLES/140729784

The latest to chime in is Quin Hillyer, an unsuccessful Alabama-congressional-candidate (he finished fourth in the Republican primary)-turned-columnist for the Baton Rouge Advocate who somehow purports to be an expert on Louisiana politics but who continues to live in Mobile.

The DHH report attempted to show that Jindal’s privatization plan—a plan, by the way, that has yet to be approved by the Center for Medicare and Medicaid Services(CMS)—has cost the state $51.8 million less than expected during the fiscal year ended June 30.

STATE HOSPITAL FINANCIAL REPORT

But those numbers are disingenuous at best.

The first column of the DHH spreadsheet contains the amounts budgeted for each of the nine hospitals for the fiscal year that ended on June 30.

That’s simple enough to comprehend but the second column is the key. That column lists the amounts actually spent as of June 30 while the third column reports the difference between the amounts appropriated and the amounts spent. That’s where DHH came up with the aggregate savings of $51.8 million.

But what the report neglects to say is that the books on those fiscal year 2013-2014 expenditures will not be closed until later this month, so any reported costs (Column 2) will necessarily increase, thereby negatively impacting Column 3. (Column 4 simply gives the appropriations for each hospital for the current (2014-2015) fiscal year.)

By way of explanation, “Public Claims” is the traditional Medicaid payments the state made to the public hospitals. “Public UCC” is the uncompensated care, or DSH payments the state made to the LSU hospitals. “Private Claims” are the Medicaid payments made to the new private hospital partners. These are the same payments as the “Public UCC” payments, only larger and fueled by the lease payments used by the state for match, thereby cutting state funds and giving the illusion of shrinking government.

“Private UPL” stands for “upper payment limit,” which is a supplemental Medicaid payment which the state must match—which is now done from the lease payments that CMS has yet to approve. “Private UCC” is DSH payments the state is also allowed to make to private hospitals.

It is not unusual for individual hospitals to vary from their original budgets because they have the flexibility to move money around, using savings in one area to cover expenditures in others. The bottom line is what is significant.

Even with that Enron-esque method of bookkeeping, several hospitals have already overspent their budgets even before the final numbers are in, the report shows. Those include Earl K. Long Medical Center in Baton Rouge ($12.2 million over budget), Interim LSU Hospital in New Orleans ($5.9 million), University Medical Center in Lafayette ($8.8 million) and W.O. Moss in Lake Charles ($1.2 million).

Others that were close to spending all of their appropriations included Chabert Medical Center in Houma and E.A. Conway in Monroe.

The total appropriations for all nine hospitals for the 2013-2014 fiscal year is $1.111 billion against $1.058 billion spent, a difference of $51.8 million, according to the report which again, does not reflect the final numbers.

The 2014-2015 appropriation for the nine facilities is $1.15 billion which means if nothing changes in expenditures for the current budget (a highly unlikely, almost impossible scenario), the state will still spend $91.5 million more on the hospitals in 2014-2015 than in the previous fiscal year.

And should the final numbers for 2013-2014 show that the hospitals spent the entire $1.111 billion appropriated, the state still will spend $39.7 million more this year than last.

Somehow, that just doesn’t support the $51.8 million “savings.”

Moreover, the report conveniently does not provide us with the means of finance so we have no concept of how much is state funding and how much is federal. No matter; the cold hard facts are that the partnerships between the state and private hospitals were supposed to save money and they clearly have not.

The 2013-2014 fiscal year was a hybrid between the old public model and the new private model in which the private hospitals lease the state hospitals and use those lease payments for matching funds that the state puts up to receive federal dollars to make “private” payments.

It is that arrangement that CMS has yet to approve because they involve largely inflated lease payments. While the arrangement may be counterintuitive, the private hospitals are more than happy to agree to the inflated lease payments because the state plans to use those payments as match and promptly draw down big federal matching dollars to then pay back to the private hospitals—if, that is, CMS approval is forthcoming.

None of this matters to Hillyer and McKay, though. Eager to thumb their noses at the skeptics and while taking a deliberate shot at “liberal” gubernatorial candidate State Rep. John Bel Edwards, Hillyer called the hospital privatization plan “good medicine,” adding that early critics “should be pulling out the salt and pepper” in preparation to “eat their earlier words.”

http://theadvocate.com/news/opinion/9878018-123/quin-hillyer-jindals-privatization-was

But even more egregious on Hillyer’s part, he claims (erroneously, it should be noted) that CMS “has not sent an official ‘disallowance’ notice” on the advance lease payments when in fact those have already been disallowed outright as being illegal. That, says Edwards, will likely result in future clawbacks of $507 million that the state will owe Medicaid.

He also quoted DHH Secretary Kathy Kliebert as saying negotiations with CMS have put the feds “in a position where, fairly shortly, they can approve our State Plan Amendments.”

Perhaps so, but we’ve heard that song and dance before so we’re going to withhold judgment on that optimistic report.

At least McKay (or MacAoidh if you will) had the good sense not to accept the DHH spreadsheet as the final numbers and at acknowledged a “fuller accounting” would be forthcoming. “And we’ll know next year, after the first full year of the implementation of Jindal’s idea to privatize the charity hospitals, exactly how much money is saved,” he added, making an apparent assumption there would be a savings despite the increased budget for the current fiscal year. http://thehayride.com/2014/07/surprise-the-privatized-charity-hospitals-come-in-52-million-under-budget/

But then McKay, as is his wont, became a bit melodramatic by pointing out observers “might be at a loss to summon up memories of dead bodies due to neglect as a result of the privatization. If there are oodles of corpses littering the roadsides outside of hospitals throughout Louisiana for lack of admittance, they’ve gone strangely unreported.”

We honestly don’t know where he came up with that wild scenario that he somehow implies was the claim of privatization opponents. “Nobody suffered from the leases of those hospitals,” he continued. “And the state is going to save a lot of money as a result, while likely delivering better services to the public.”

That, of course, remains to be seen. If he is right, he’s right. But it’s difficult to arrive at that conclusion when you look at the numbers on the DHH spreadsheet.

If, that is, you bothered to study the numbers closely which some obviously did not—just as the administration counted on.

(With appreciation to two regular readers who helped us interpret the numbers and their meaning.)

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The Jindal administration has announced plans to jettison 24 more positions at the Office of Group Benefits (OGB) as a cost cutting measure for the cash-strapped agency but is retaining the top two positions and an administrator hired only a month ago.

The effective date of the layoffs is Aug. 15.

The latest cuts will leave only 47 employees when the agency is relocated to the Claiborne Building basement to share office space with the Office of Risk Management. The Claiborne Building also houses the Civil Service Department, the Board of Regents, the Department of Education, the State Land Office and the Division of Administration.

The layoff plan submitted to the Department of Civil Service on June 14, said there was insufficient work to justify all 71 positions.

Affected by layoffs are eight Benefits Analyst positions, three Group Benefits Supervisory spots, one Group Benefits Administrator, seven Administrative Coordinators, an Administrative Assist, two Administrative Supervisors, one IT Application Programmer/Analyst and one Training Development Specialist.

OBG Chief Executive Officer Susan West, one of those being retained, will be making a physical move back into her old offices. She previously worked for ORM before that agency was gutted by Jindal’s grand privatization scheme and she moved over to OGB.

West, who makes $170,000, and Interim Chief Operating Officer Charles Guerra ($107,000) are not affected by the layoff nor is Elis Williams Cazes ($106,000)) was appointed as Group Benefits Administrator on June 23.

Cazes was previously employed by Blue Cross/Blue Shield of Louisiana which serves as the third party administrator of the OGB Preferred Provider Operation at a cost to the state of $5.50 per month per enrollee, which computes to an amount a little north of $70 million per year.

Her position was created—and the requirements reportedly written especially to her qualifications—as the Medical/Pharmacy Administrator responsible for benefit plan management and vendor performance with the primary responsibility to “continuously monitor medical and pharmacy benefit plans to seek out modification of plans or implementation of new plans that reduce claims costs and provide efficiencies for the state and plan participants,” according to the justification given for retaining her position.

Well, we can certainly see where her position is as indispensable as West’s and Guerra’s.

All this takes place at a time whe OGB’s reserve fund has dwindled from $500 million at the time of the agency’s privatization in January 2013 to about half that amount today. Even more significant, the reserve fund is expected to dip as low as $5 million by 2016, just about the time Jindal leaves town for good.

Completing the trifecta of good news, we also have learned that health benefits for some 200,000 state employees, retirees and dependents will be slashed this year even as premiums increase.

In June, West broke the news to the OGB employees. She erroneously said the 47 remaining employees would be reassigned other duties and some might see pay reductions and that those with seniority could bump junior employees in desired positions. The Civil Service Department, however, said salaries could not be cut and bumping is no longer allowed.

Isn’t it nice to know your agency director knows the procedures?

Employees were told that letters would go out between July 1 and July 15 to those who were being laid off. On July 7, they were told the letters would be delivered by hand on Friday, July 11. None came. On the following Monday (July 14) confusion of the order of the day as Deputy Commissioner of Administration Ruth Johnson sent emails to those affected and instructed them to attend a noon meeting in the OGB board room. Upon entering the board room, each person was handed a packet that informed them that Civil Service had not approved the layoffs.

During the meeting, according to one who was there, West kept repeating, “I get this. I’ve been where you are. I get this. However, there are worse things. It’s not like losing a child. I get this.”

Way to soften the blow, Susan. You might have reminded them that the fighting between Israel and Palestine isn’t so bad because there’s also an Ebola outbreak in Africa or that while you’re losing your home to a hurricane storm surge, some people are having to endure heavy wind damage. Or better yet, take them all to a showing of The Fault in Our Stars. That’ll cheer them up.

“It was the ‘I get this’ and comparison of losing a job to losing a child that infuriated the OGB state employees,” the employee said. “This is the worst thing in their lives right  now, some are battling cancer and working; some have children and grandchildren to feed; some live paycheck to paycheck; some are taking care of the elderly and family; all have bills, rents/mortgages, school tuition, etc.”

But you really can’t blame Susan. She previously worked for ORM and was among those present when ORM Director Bud Thompson broke the privatization news to his employees by standing before them, grinning, as he said, “I still have my job.”

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Anyone who still wonders why Gov. Bobby Jindal trots around the country uttering his venom-laced attacks on Washington in general and the Obama administration in particular should understand something. It’s all about politics; he is simply pandering to what he perceives as his base which is, at best, an illusion.

His foaming at the mouth courtship with his invisible support group is something like playing with an imaginary friend. In Jindal’s case, we have it on pretty good authority that he had two imaginary friends as a child but they would go to the other end of the playground and never let him join them. You will notice he never shows up in any of the lists of potential major GOP presidential candidates. That’s because the Republican Party just doesn’t want to play with him.

We have to give Jindal credit for one thing, however; he backs his rhetoric with action.

In his steadfast resistance to anything Washington, we have seen him:

  • Reject $300 million in federal funding for a Baton Rouge to New Orleans high speed passenger rail connection because he doesn’t want federal control;
  • Pretend to reject $98 million in federal stimulus funds for recovery from the 2008 recession while quietly taking the funds and handing out checks to municipalities during his highly-publicized visits to Protestant churches in north Louisiana;
  • Reject $80 million in federal funding to expand broadband internet service into rural areas of the state, primarily in north Louisiana;
  • Reject $15.7 billion in federal Medicaid expansion funds because he incorrectly claimed it would cost Louisiana taxpayers up to $1.7 billion over 10 years. He provided no figures to back that claim but did defiantly say Obama “won’t bully Louisiana.” Meanwhile, more than 200,000 low-income Louisiana residents are still without medical insurance.
  • Reject the Common Core State Standards Initiative after previously voicing his wholehearted support for the standards, again saying, “We won’t let the federal government take over Louisiana’s education standards.”
  • Prevail upon the legislature to reject an increase in the minimum wage, to reject tightening regulation of payday loan companies, to ban discrimination against gays, and to reject support of equal pay for women—most probably because all such proposals have the ugly thumbprints of Washington all over them.

So, taking into account his polarizing negativity against Washington, it’s pretty easy to see that things might have been different if we’d never had this little demagogue as governor.

But then we got to wondering how Louisiana might have fared down through the years if we had always been saddled with a Jindal on the fourth floor of the State Capitol. We would probably have beaten South Carolina in being the first state to secede from the Union.

But for the sake of simplicity, let’s just go back to Franklin Roosevelt’s administration. That’s pretty fair because U.S. Sen. Huey Long (whom Jindal often seems to be trying to emulate) was about as anti-New Deal then as Jindal is anti-everything federal is today. Moreover, the nation was reeling from the Great Depression, thanks to Wall Street’s greed, just as America was suffering from the Recession of 2008, thanks in large part to Wall Street again gone amok.

Works Progress Administration projects:

  • Big Charity Hospital in New Orleans where many Louisiana physicians received their training for decades (including Congressmen Bill Cassidy and Charles Boustany, Jr.);
  • Tennessee Valley Authority (TVA) which brought electric power to Louisiana’s most rural farm communities (and without which, to paraphrase the late comic Brother Dave Gardner, they’d all be watching TV by candlelight);
  • State Capitol Annex across Third Street from the State Capitol;
  • More courthouses were constructed under the program from 1936 to 1940 than in any other period in state history. They include courthouses in the parishes of St. Bernard, Natchitoches, Iberia Parish, Caldwell, Cameron, East Carroll, Jackson, Madison, Rapides, St. Landry and Terrebonne.
  • Mumford Stadium, Bradford Hall and Grandison Hall at Southern University;
  • Himes Hall, the faculty club, and the geology building at LSU;
  • Two buildings at what is now the University of Louisiana Monroe, three on the McNeese campus, seven each at Southeastern Louisiana University and Louisiana Tech, a water tower at Grambling State University, eight additions at Northwestern State University and 12 at the University of Louisiana Lafayette, all of which significantly extended the reach of higher education in the state.
  • Scores of new elementary and high schools (including this writer’s Alma Mater, Ruston High School), as well as high school science labs, gymnasium-auditoriums, home economics cottages, athletic fields, music rooms and vocational education shops;
  • New buildings for the Hansen’s Disease Center at Carville;
  • The Huey P. Long Bridge in New Orleans;
  • Extensive improvements and updates to the French Market in New Orleans;
  • Expansion of the Audubon Zoo in New Orleans;
  • Paving of 40 miles of roadway on Barksdale Air Force Base in Bossier City as well as the clearing of 15 miles of bayous and drainage canals and the rehabilitation of 43 wooden bridges on the base;
  • Improvements to the 1,300-acre City Park in New Orleans;
  • The Louisiana State Museum in Shreveport;
  • Tad Gormley Stadium in New Orleans;
  • The old City Hall in Denham Springs;
  • Construction of the Louisiana State School for the Deaf (now housing an administration building for the Baton Rouge Police Department);
  • Post offices in Hammond, Plaquemine, Arabi; Arcadia, Bunkie, Donaldsonville, Eunice, Haynesville, Jeanerette, Leesville, Oakdale, Rayville, and Monroe;
  • Conversion of a Baton Rouge swamp into the University Lakes around which many LSU professors, former U.S. Congressman Henson Moore and current Congressman Bill Cassidy now reside;
  • Eradication program to kill malaria-carrying mosquitoes near the New Orleans lakefront.

Huey Long did everything in his power to throw up roadblocks to FDR. His reasons? He planned to run for President in 1936 and he needed to incite opposition to Roosevelt and Washington in order to build a national political base. In fact, before his death in September of 1935, Long was quite effective as fewer than three dozen PWA projects were fully authorized for the state.

Sound familiar?

Following Long’s death and with his obstructionist policy abandoned by his successors, FDR funneled $80 million into Louisiana for roads, bridges, water and sewerage systems, parks, playgrounds, public housing, library and bookmobile programs and literacy drives. That’s $80 million in 1930s dollars. About what it would take to fund that proposed broadband internet expansion for rural north Louisiana today.

So, let’s ask Jindal to hop into our time machine and travel back to September 1935 where he will run and be elected governor just in time to revive the Kingfish’s anti-Roosevelt rhetoric.

Big Charity Hospital? Who needs it? But wait. Jindal wouldn’t have that facility today to give away in his privatization plan yet to be approved by the Centers for Medicare and Medicaid Services (CMS). And without Big Charity, there probably never would have been similar state hospitals in Houma, Baton Rouge, Lafayette, Lake Charles, Alexandria, Shreveport or Monroe to close or privatize.

All those courthouses? Shoot, just drop them in the Capital Outlay bill and sell some more state bonds. We can always raise the state’s debt ceiling.

As for all those buildings on the university campuses across the state, hasn’t anyone been paying attention? We’re cutting funding for all that. Who needs public colleges anyway? Let the students get a student loan and go to ITI Technical College.

And Ruston High School? We’ll just turn that into a charter and issue vouchers to the white kids—the smart rich ones.

All those New Deal programs created jobs for Louisianians? Well, so what? There probably wouldn’t have been an unemployment problem in the first place if the workers weren’t so greedy back then and would’ve agreed to work for 15 cents an hour. That’s what happens when you raise the minimum wage.

Fast Forward 30 years

And lest we forget, we probably need to include a couple of programs President Lyndon B. Johnson rammed through Congress.

The Civil Rights Bill opened the door of opportunity for African Americans as nothing since the Emancipation Proclamation had done. And of course there was bitter opposition right down to passage—and beyond. There are those, some in elective office, who would repeal the act today, given the opportunity. The irony is that LBJ had opposed every Civil Rights measure in Congress when he was a senator but when he ascended to the presidency upon JFK’s assassination, he told one supporter, “I’m everybody’s president now.”

And, of course, there is the precursor to the Affordable Care Act, aka ObamaCare.

Of course, that would be that radical Social Security Amendment of 1965 which created Medicare and Medicaid.

There was rabid opposition to Medicare by Republicans and the American Medical Association which insisted there was no need for the federal government to intervene in the relationship between patient and physician. Today, if any politician ever tried to terminate Medicare services, he would have a blue-haired riot on his hands and rightly so.

Medicare now provides medical insurance to 50 million elderly Americans and Medicaid does the same for another 51 million low-income or disabled Americans.

Perhaps someone should ask Republican Congressmen Bill Cassidy of Baton Rouge (6th District and a candidate for U.S. Senate against incumbent Mary Landrieu) and John Fleming of Minden (4th District), and Charles Boustany, Jr. (3rd District) each of whom is a physician and each of whom opposes Obamacare, what percentage of their income as practicing physicians walked in the door as Medicare or Medicaid patients?

Then check with Jindal to see how that squares with his opposition to the welfare state and such socialistic practices.

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To probably no one’s surprise except a clueless Gov. Bobby Jindal, the takeover of the Louisiana Office of Group Benefits (OGB) by Blue Cross Blue Shield of Louisiana 18 months ago has failed to produce the $20 million per year in savings to the state.

Quite the contrary, in fact. The OGB fund balance, which was a robust $500 million when BCBS took over as third party administrators (TPA) of the Preferred Provider Organization (PPO) in January of 2013, only 18 months later stands at slightly less than half that amount and could plummet as low as an anemic $5 million a year from now, according to figures provided by the Legislative Fiscal Office.

OGB is one of the main topics to be taken up at today’s meeting of the Joint Legislative Committee on the Budget (JLCB) when it convenes at 9 a.m. at the State Capitol.

OGB is currently spending about $16 million per month more than it is collecting in revenue, said Legislative Fiscal Officer John Carpenter.

The drastic turnaround is predicated on two factors which LouisianaVoice warned about two years ago when the privatization plan was being considered by the administration:

  • Jindal lowered premiums for state employees and retirees. That move was nothing more than a smokescreen, we said at the time, to ease the state’s share of the premium burden as a method to help Jindal balance the state budget. Because the state pays a percentage of the employee/retiree premiums, a rate reduction would also reduce the amount owed by the state, thus freeing up the savings to patch gaping holes in the budget.
  • Because BCBS is a private company, it must return a profit whereas when OGB claims were processed by state employees, profits were not a factor. To realize that profit, premiums must increase or benefits decrease. Since Jindal had already decreased premiums, BCBS necessarily found it necessary to reduce benefits.

That, however, still was not enough and the negative income eroded the fund balance to its present level and now legislators are facing a severe fiscal crisis at OGB.

And make no mistake: this is a man-made crisis and the man is Bobby Jindal.

In a span of only 18 months we have watched his grandiose plans for OGB and the agency’s fund balance dissolve into a sea of red ink like those $250 million sand berms washing away in the Gulf of Mexico in the wake of the disastrous BP spill.

There is no tactful way to say it. This Jindal’s baby; he’s married to it. He was hell bent on privatizing OGB and putting 144 employees on the street for the sake of some hair-brained scheme that managed to go south before he could leave town for whatever future he has planned for himself that almost surely does not, thank goodness, include Louisiana.

So ill-advised and so uninformed was Jindal that he rushed into his privatization plan and now has found it necessary to have the consulting firm Alvarez and Marcel, as part of their $5 million contract to find state savings, to poke around OGB to try and pull the governor’s hand out of the fiscal fire. We can only speculate as to why that was necessary; Jindal, after all, had assured us up front that the privatization would save $20 million a year but now cannot make good on that promise.

In the real world, the elected officials are supposed to be the pros who know that they’re talking about while those of us on the sidelines are mere amateurs who can only complain and criticize. Well, we may be the political novices here, but the results at OGB pretty much speak for themselves and we can rightfully say, “We told you so.”

Are we happy or smug? Hell, no. We have to continue to live here and raise our children here while Jindal will be taking a job with some conservative think tank somewhere inside the D.C. Beltway (he certainly will not be the Republican candidate for president; he isn’t even a blip on the radar and one former state official now residing in Colorado recently said, “No one out here has ever even heard of him.”)

In a five-page letter to JLCB Chairman Rep. Jim Fannin (R-Jonesboro), Carpenter illustrated the rate history of OGB going back to Fiscal Year 2008 when premiums were increased by 6 percent. The increase the following year was 3.7 percent and the remained flat in FY-10. In FY-11, premiums increased 5.6 percent, then 8.1 percent in FY-12 when the system switched from a fiscal year to calendar year. but in FY-13, the year BCBS assumed administrative duties, premiums dropped 7 percent as Jindal attempted to save money from the state’s contributions to plug budget holes. For the current year, premiums decreased 1.8 percent and in FY-15 are scheduled to increase by 5 percent.

OGB Report_July 2014 FOR JLCB

Carpenter said that since FY 13, when BCBS took over the administration of OGB PPO claims, OGB’s administrative costs began to shift to more third party administrator (TPA) costs as the state began paying BCBS $23.50 per OGB member per month. That rate today is $24.50 and will increase to $25.50 in January of 2015, the last year of the BCBS contract.

That computes to more than $60 million per year that the state is paying BCBS to run the agency more efficiently than state employees who were largely responsible for the half-billion-dollar fund balance.

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Did the Jindal administration get the cart ahead of the horse when it announced the layoff of more than 100 state employees at a state hospital in central Louisiana?

As if Gov. Bobby Jindal did not have enough on his plate with his attempts to gain approval form the Center for Medicare & Medicaid Services (CMS) for his hospital privatization plan, now the battle over the closure of one hospital has moved into the courts.

Brad Ott of New Orleans and Ed Parker of East Feliciana Parish have named the Louisiana State Senate, the State of Louisiana and the LSU Board of Supervisors in their lawsuit filed in 19th Judicial Court in Baton Rouge.

Their petition claims that the Senate Committee on Health and Welfare violated the state’s open meetings law in approving the closure of Huey P. Long Medical Center in Pineville.

Moreover, the petition says that while more than 100 classified employees are due to receive layoff notices effective June 30, the State Civil Service Commission is not scheduled to consider the LSU layoff plan until early July.

Wait. What?

Did the LSU Board of Stuporvisors really notify 100-plus employees that they no longer had jobs—before getting formal approval of the layoff plan from Civil Service?

Surely not.

The Rules of Order of the Senate, Rule 13.73, entitled “Notice of committee meetings during session,” provides in part: “Such notices shall be posted for each meeting as soon as practicable, but not later than 1 p.m. of the day preceding the meeting day.”

Rule 13.75, entitled “Meetings prohibited without notice,” provides in part: “No meeting of a committee, regularly scheduled or otherwise, shall be held unless there is full compliance with the requirements of Louisiana Senate Rule 13.73…”

The lawsuit says the notice for the April 2, 2014, meeting of the Senate Committee on Health and Welfare was revised on April 1 at 4:04 p.m. to add the consideration of SCR 48 by Sen. Gerald Long (R-Natchitoches).

SCR 48 was the Senate Concurrent Resolution that called for the closure of Huey P. Long. The resolution passed in the House Health and Welfare Committee by a 10-8 vote after nearly three hours of debate. By contrast, the Senate Health and Welfare Committee took only 10 minutes for unanimous passage.

Both petitioners say they had planned to testify in opposition to the resolution before the committee but that they were not notified that the committee would be taking up SCR 48 on April 2 because of the last minute revision to the notice of the meeting. “Consequently, both of the petitioners were effectively prevented from observing the deliberations…and expressing their concerns,” the petition said.

Wait. What?

Would a Louisiana Senate committee really do an end run around opponents to a controversial resolution in violation of the open meetings law in order to slip the resolution through?

Surely not.

But with the administration desperate to ram its hospital privatization through despite questionable funding methods, anything is possible. Jindal, in fact, has clearly demonstrated that he will go to any length to move his agenda along.

Plaintiffs’ attorneys J. Arthur Smith and Adrienne Rachel are seeking a declaratory judgment and injunctive relief subject to the state’s open meetings law, an injunction prohibiting the state from implementing provision of SCR 48, monetary damages for violations of the state’s open meetings law, and attorney’s fees.

Smith is a relative newcomer in litigation against the state but he has sent out notice that the old ways of doing business may be changing. He has already won one battle with the Department of Education over the department’s reluctance to comply with the state’s public records laws and currently has other suits pending against the Department of Agriculture and the Office of Alcohol and Tobacco Control.

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“…My purpose is to dismantle the dismantlers. As such, my words are not kind. My words expose, and that exposure is harsh. The individuals and organizations profiled in this book have declared war on my profession, and I take that personally.”

 

—Mercedes Schneider, writing in the introduction to her book A Chronicle of Echoes: Who’s Who in the Implosion of American Public Education.

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A Chronicle of Echoes: Who’s Who in the Implosion of America’s Public Education (Information Age Publishing, 404 pages) is a new book by St. Tammany Parish high school English teacher Mercedes Schneider that should be required reading by both proponents and opponents of the current drift in education from public to private, from non-profit availability to all students to for-profit institutions available to the select few.

Before we get too far into our review of this book, there are two things you should know about Mercedes Schneider:

  • The emphasis is on the first syllable of Mer’ Ce-deez; she’s not a car, nor was she named for one.
  • Don’t ever make the mistake of trying to schmooze her with B.S., especially when it comes to issues involving public education. She will call you out the same way she called out an ill-prepared Board of Elementary and Secondary Education President (BESE) Chas Roemer following his debate with Diane Ravitch in March of 2013. Ravitch had already run circles around Roemer in their debate and he was simply no match for Schneider in the question-and-answer session that followed. It would have been comical had it not been for the position of such serious responsibility conferred upon Roemer by voters in his BESE district.

And when she does call you out, that caustic and at the same time, delightful St. Bernard Parish accent comes shining through like a lighthouse beacon slicing through a foggy night.

The publisher of an education online blog called At the Chalk Fence, She has moved her debate from her ongoing fight with Gov. Bobby Jindal and Superintendent of Education John White to a national forum and is now calling out such self-proclaimed education experts as former New York City School Chancellor Joel Klein, whom she calls “the viral host of the corporate reform agenda,” Teach for America (TFA) founder Wendy Kopp, disgraced Washington, D.C. school chancellor and later founder of StudentsFirst Michelle Rhee, vagabond school reformer and former Superintendent of Louisiana’s Recovery School District (RSD) Paul Vallas, the American Legislative Exchange Council (ALEC) and the “Big Three Foundations: Gates, Walton and Broad.”

A thorn in the side of Jindal, White, and Roemer of long-standing, she turns her attention to the national educational debate in Chronicle. With an appropriate nod to Ravitch as her mentor and the one who was always available when needed for advice, Schneider peppers her targets with a barrage of statistics that refute the unrealistic theories advanced by the Waltons, Bill Gates, Eli Broad, and TFA who insist meaningful education reform can be accomplished with inexperienced teachers and administrators, for-profit charters, vouchers, and the idea that throwing money at a problem is not the answer (despite their propensity to pour billions of dollars into their own idealistic agendas—at best, a philosophical oxymoron).

A product of the St. Bernard Parish public schools (P.G.T. Beauregard High School), Schneider’s attempt to drop out of school at age 15 somehow morphed into a B.S. in secondary education (English and German), a master’s degree in guidance and counseling from the State University of West Georgia, and a Ph.D. from the University of Northern Colorado.

She taught graduate-level statistics and research courses at Ball State University. It was at Ball State that she first took on the task of challenging the issues related to No Child Left Behind, teaching students “how bad an idea it was to attempt to measure teacher performance using student standardized test scores.”

In July 2007, only months before the election of Jindal as governor, she returned home and began a new job teaching high school English in St. Tammany parish.

Her introduction contains a brilliant metaphor for the corporate destruction of public education: she describes what she calls a “detailed image” of an abandoned building being imploded and collapsing upon itself. She envisions the building (public education), “not ornate, not without need for repairs, but sturdy,” as men in yellow hard hats (corporate reformers, we are told) watch, knowing what is about to transpire “because they have orchestrated it from the inside.” She describes the men as “responsible for the impending structural failure” and “who have planned the failure but are removed from its consequences.”

In her blog, she recently launched a withering attack on White’s embargo of the LEAP summary public report, saying the state superintendent had “apparently found himself in an unfamiliar fix regarding his characteristic ‘water muddying.’” She accused White of “collapsing” categories within the LEAP grading system in order to conceal variation through report “groupings” that she said concealed the precision of the standard five levels of LEAP achievement (unsatisfactory, approaching basic, basic, mastery, and advanced).

“Collapsing ‘basic,’ ‘mastery,’ and ‘advanced’ into a single, generic ‘passed’ serves to conceal achievement nuances that might make Louisiana Miracle RSD appear to be ‘less than’ locally-run districts—the ones operated by those pesky, traditional local school boards,” she said.

“After all, a test-score-deficient ‘miracle’ is harder to sell,” she said. “If the data reflect poorly on privatization, then the troubled corporate reformer could alter the data, or alter the reporting, or alter access to the reporting, or employ some combination of the three. Gotta love corporate reform ‘transparency.’”

Jindal, White and Roemer may heave a collective sigh of relief that they have been spared the glare of the spotlight in Chronicle as she concentrates her argument on the glaring weaknesses of the major education reform movers and shakers at the national level.

But perhaps they should not be too comfortable at being spared just yet.

After all, certain matter, they say, flows downhill.

A Chronicle of Echoes is a must read for anyone who is or ever claimed to be concerned about the perpetual political tampering with public education in America—by those least qualified to do so.

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That citation of Dual Trucking Co. by the Montana Department of Environmental Equality for dumping oilfield radioactive waste from the nearby Bakken Oilfield, it turns out, is not the only problem State Rep. Gordon Dove (R-Houma) has experienced with environmental authorities, LouisianaVoice has learned.

Vacco Marine, Inc., a company owned by Dove, who chairs the House Committee on Natural Resources and Environment, has been the subject of several investigations, negative reports, citations, and compliance orders by and from the Louisiana Department of Environmental Quality (DEQ) over a period of several years, records show.

Last week, while presiding over a meeting of the Natural Resources Committee, he joined 12 other members in passing an amendment to SB 469 that made the prohibition against suing oil companies for damages to the state’s wetlands and marshes retroactive. The amended version of the bill has since been approved by both the full House and Senate and awaits the signature of Gov. Bobby Jindal.

Dove also serves as a member of the Louisiana Coastal Protection and Restoration Authority.

Following are a few of the issues in which Dove and his company, Vacco Marine, have been involved:

  • May 12, 1989: DEQ, Office of Water Resources, Water Pollution Control Division inspection found evidence that various substances, including diesel and sludge, were being buried and that the practice had been ongoing “for a while.”

 

  • April 28, 1994: Same office found “several areas of limestone and ground contaminated with oil” and that a ditch which drained into Bayou Grand Caillou was “contaminated with hydrocarbons.” Dove was ordered to remove contaminated sediment, remove all contaminated ground in proximity of spills and to prevent future spillage.

 

  • Sept. 12, 1996: Vacco Marine was issued a compliance order by DEQ’s Hazardous Waste Division after an inspection in December of 1995 resulted in three separate violations relating to solid waste.

 

  • Oct. 6, 2004: U.S. Environmental Protection Agency (EPA) issued a complaint and consent agreement pursuant to the EPA’s compliance evaluation inspection of Sept. 23, 2003. Vacco Marine paid $6,593 in civil penalties to EPA on Jan. 14, 2005, for unspecified violations. The agreement also noted that Vacco would be subject to further enforcement action and additional penalties of up to $32,500 per day for continued noncompliance. The agreement also stipulated that Vacco could be enjoined from further generation, transportation, storage of disposal of hazardous waste if violations persisted.

 

  • Feb. 24, 2010: A DEQ inspection found 10 separate violations including incorrect logging of mercury, cut electrical and air lines, failure to log wastes received at the facility, and a lack of a Stormwater Water Pollution Prevention plan, among others. The 177-page inspection report included numerous photographs of conditions at Vacco Marine. Those included photos of open ditches that contained effluent and which drained into the Houma Navigational Canal.

 

  • April 11, 2012: DEQ compliance order and notice of potential penalty issued on the basis of DEQ finding that Vacco Marine had failed to develop and implement a Storm Water Pollution Prevention Plan as ordered in 2010. The DEQ order further noted that Vacco Marine had neglected to comply with other requirements, including the filing of required reports and permit applications. Vacco Marine also was found in violation of the requirement to record flow from its facility and, in fact, the flow meter was inoperable. Even when in service, the flow meter was found to have been installed incorrectly so that it could not accurate record flow rates. Other violations noted included failure to submit a noncompliance report, exceeding effluent limitations, incorrect reporting of Butyl Benzyl Phthalate outfall.

 

Even though Dove’s company was ordered to come into compliance with DEQ regulations, no penalties were imposed on Vacco Marine.

Could this have been because of his powerful position as chairman of the House Natural Resources and Environment?

Could it be that he received special consideration because of his position as a legislator?

That, of course, is difficult to say. But it certainly should not be hard to see the potential danger of placing an individual as chairman of a legislative committee that oversees the very agency that regulates his business—especially when that individual has such a spotted record of compliance as Rep. Gordon Dove.

That makes about as much sense as allowing him to chair that same committee and allowing him to vote on SB 469 after he received nearly $29,000 in campaign contributions from the oil and gas industry.

It makes about as much sense as Gov. Jindal’s apparent belief that the state ethics laws are meant to apply to some but not others as he signed into law a bill to allow former State Sen. Francis Heitmeier to lobby the Legislature despite the fact that his brother, David Heitmeier, is currently a state senator—in open violation of the state ethics law that prohibits members of lawmakers’ families from lobbying the legislature.

It makes about as much sense as allowing the LSU Board of Stuporvisors to enter into a contract with a company run by an LSU Board member to operate two LSU hospitals in north Louisiana.

It makes about as much sense as allowing Board of Elementary and Secondary Education (BESE) President Chas Roemer to vote on charter school issues despite the fact that his sister is executive director of the Louisiana Association of Public Charter Schools.

It makes about as much sense as allowing BESE and the Louisiana Department of Education to enter into multi-million contracts with Teach For America (TFA) even as Kira Orange Jones sits as a member of BESE and serves as executive director of TFA Greater New Orleans-Louisiana Delta.

Where I grew up in north Louisiana, we called that letting the fox guard the henhouse.

In Baton Rouge, apparently it’s just called Jindaltics.

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Bobby Jindal the Petulant Paranoid has teagued yet another high-ranking state official, LouisianaVoice has learned.

This time the victim is said to have been only a few months from retirement.

The governor who publicly advocates openness, accountability and transparency everywhere in the U.S. except Louisiana, has shown on repeated occasions that he cannot stomach any difference of opinion among state employees at any level, classified or unclassified—or even from legislators.

His paranoia rose (or sank, depending upon one’s preferred descriptive verb) to a new level on Thursday, however, when he fired Gary Crockett, former administrator at Huey P. Long Medical Center in Pineville just two days after the House Health and Welfare Committee voted 10-8 to close the facility.

Crockett last year tried to keep administration-ordered layoffs at the hospital to a minimum but was forced to make deep cuts in personnel.

The irony of Jindal’s ongoing purge, aka dissident cleansing is that Crockett had already left his $144,650-a-year position at Huey P. Long because of his differences with the administration. He took a position at another state medical facility where he thought—incorrectly, it turns out—he could ride out the rest of his career..

Word out of the State Capitol is that Jindal felt that Crockett may have been providing information to legislators opposed to the closure of the hospital as part of Jindal’s flawed state hospital privatization plan that less than a week ago was shot down by the Centers for Medicare and Medicaid Services because of the creative but prohibited method of financing the privatization plans.

The federal action threw the state budget into chaos literally only days before the budget was to go to the House for debate on Thursday (today, May 8) because of a $400 million hole it blew in the state spending document.

Without going into specific names, suffice it to say that heads roll whenever a discouraging word is heard in Jindal’s presence and now the latest is what is becoming a very long line of teagueites, so named in honor of former Office of Group Benefits Director Tommy Teague, fired on April 15, 2011, and his wife Melody, fired about six months earlier as a grants reviewer but later reinstated.

One recent Teagueite, a friend of Crockett who must remain nameless, said of Jindal’s latest action, “There’s no other way to say it except to say the man is evil.”

Attempts by LouisianaVoice to reach Crockett Thursday for comment were unsuccessful.

 

 

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