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Obamacare Expansion Pushes California Public College to Outsource IT

By Jim Swift

Normally, when one hears left-leaning members of Congress complain about outsourcing to save money, it usually is directed at a corporation.

Imagine the surprise that a public university in California is doing precisely the same thing. The Los Angeles Times’s Michael Hiltzik writes:

UC San Francisco, the system’s biggest medical center, announced in July that it would lay off 49 career IT staffers and eliminate 48 other IT jobs that were vacant or filled by contract employees. The workers are to be gone as of Feb. 28. In the meantime they’ve been ordered to train their own replacements, who are employees of the Indian outsourcing firm HCL Technologies.

The replacements, it seems, are visiting on an H1-B visa program, which “allow American technology companies to import uniquely talented individuals from abroad; visa holders can work in the U.S. for three years, with the goal of obtaining permanent residency and ultimately citizenship.”

Incidentally, the outsourcing appears to come as a result of state requirements, and Obamacare’s expansion of Medicaid:

UCSF officials say the decision to outsource 97 IT jobs, about 20% to the total IT headcount, was forced on it by daunting economic challenges. The state requires UCSF Health, which encompasses the university’s hospitals, to be fiscally self-sustaining, collecting its revenue entirely from patient fees, Chief Executive Mark R. Laret says. The hospitals recorded a $42-million deficit in the last fiscal year on $3.4 billion in revenue, he told me. The red ink was partially the result of an increased caseload from Medi-Cal, the state’s Medicaid program, which was expanded under the Affordable Care Act. Medi-Cal reimbursements are so low that UCSF loses 40 cents on every dollar it spends on those patients’ treatment, he says.

California’s federal lawmakers aren’t happy, and few have sent letters to former DHS secretary Janet Napolitano, who is president of the University of California system.

Sen. Dianne Feinstein (D-Calif.) pointedly reminded Napolitano that UC received about $8.5 billion in federal funding in 2014-15, and said she was unhappy to hear that the funds would be used “to replace Californian IT workers with foreign workers or labor performed abroad.” She added, “this is not the way” to cut costs.

As Hitzlik reports, UC says the $50 million contract with outsourcing firm HCL will save $30 million over the contract’s five year term.

For those keeping score at home: a state university system raking in nearly $9 billion in federal aid, with a money-losing hospital system losing even more money thanks to Medicaid expansion via Obamacare, is outsourcing roughly 100 jobs, and, apparently is going to save a lot of money. All of this in one of the costliest states in which to live.

But outsourcing, not Obamacare, is the problem? OK.

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