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On January 1, 2017, the KHI News Service became part of KCUR public radio’s new initiative, the Kansas News Service. The Kansas News Service will continue to cover health policy news and broaden its scope to include education and politics. All stories produced by the former KHI News Service are archived here. Stories and photos may be republished at no cost with proper attribution and a link back to KHI.org.

Head of employees union says bill could open door to privatization of state hospitals

KDADS Secretary says he needs flexibility to fix problems at the hospitals

By Meg Wingerter | March 16, 2016

Head of employees union says bill could open door to privatization of state hospitals
Photo by KHI News Service File State officials are discussing privatization is one possible solution for staffing and other concerns at Osawatomie State Hospital.

A bill changing how state hospital superintendents can be appointed would open a back door to quietly privatizing state hospitals, according to the head of the state employees’ labor union.

Language approved by both the House and the Senate earlier in a budget bill passed earlier in the session prohibited the state agency that operates the hospitals from entering into privatization agreements without the approval of the legislature.

Photo by KHI News Service Rebecca Proctor, executive director of the Kansas Organization of State Employees labor union, says a Senate bill could open a back door to privatizing state hospitals.

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However, Rebecca Proctor, executive director of the Kansas Organization of State Employees, said a bill now under consideration could essentially provide that authorization. If the administration wants to privatize the state hospitals, it should hold Legislative hearings and public meetings first, she said.

“We think this process should be open, it should be public, it should be transparent,” she said. “This bill allows any privatization to happen very quietly, with only a few people involved and no public hearings.”

Tim Keck, interim secretary of the Kansas Department for Aging and Disability Services, said the measure in question – Senate Bill 460 – would simply allow the agency to explore privatization by issuing a request for proposals. The bill ensures legislative oversight, Keck said, by requiring the agency to get the approval of the State Finance Council before issuing the RFP. 

“We need this bill to have a legitimate review of the RFP process,” Keck said. “We want to take as many RFPs as possible so we can provide the best for patients.”

Photo by Andy Marso/KHI News Service Tim Keck, interim secretary of the Kansas Department for Aging and Disability Services, said the department needs flexibility to pursue options to improve care at Osawatomie State Hospital.

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The agency needs “flexibility” in order to receive serious offers from private groups to run Osawatomie State Hospital, Keck said, and needs to have all options on the table to improve care. Osawatomie is the state’s largest mental health hospital. It lost its Medicare payments in December after federal inspectors found the environment wasn’t safe for patients.

The bill would appear to at least take a step toward allowing privatization of the two state psychiatric hospitals and the two hospitals serving people with severe developmental disabilities. It states that if a hospital superintendent, physician or other staff member were appointed by a person or organization contracting with the Kansas Department for Aging and Disability Services, he or she wouldn’t be under the state’s civil service system.

Currently, superintendents and physicians are under the civil service, but the positions are unclassified, meaning they don’t have the same employment protections that classified workers do.

Sen. Caryn Tyson, a Parker Republican whose district includes Osawatomie State Hospital, said she thought the bill would run afoul of the Legislature’s requirement that it approve any attempt to privatize the hospitals. Placing the issue before the Finance Council would allow a “hand-picked” few to decide for the rest of the Legislature, she said.

“We need this bill to have a legitimate review of the RFP process.”

- Tim Keck, interim secretary of the Kansas Department for Aging and Disability Services

Recent events have made many legislators cautious about inadvertently handing over authority to the administration. At Wednesday’s committee meeting, some members referenced a controversial contract by the Department of Administration to build a new power plant to replace one under the Docking State Office Building, which the state intends to implode. They said the administration exceeded its authority by entering into a $20 million contract to build a new power plant.

The bill also would change how new employees are categorized even if the state doesn’t privatize the hospitals. Hospital staff and some KDADS administrative staff hired or appointed after July 1 would be automatically categorized as unclassified. Current workers would remain classified unless they change jobs.

That provision isn’t necessary, Proctor said, because state agencies already have the right to make open positions unclassified.

“The agency has authorization to do everything but privatize,” she said.