Private prison health-care industry grows as states cut costs, bringing in millions of dollars

Posted on: October 19th, 2011 by Yana Kunichoff 4 Comments

Aleshia Napier was 18 years old in 2006 when she hung herself with a bed sheet at the Broward Correctional Institution in Fort Lauderdale, Fla., after being placed in solitary confinement despite her diagnosis of clinical depression and bipolar disorder.

The attorney hired by the young woman’s devastated family, Randall Berg Jr., the executive director of the Florida Justice Institute, points to two culprits for ignoring the medical and mental health needs of Napier: the private prison health-care companies PHS Correctional Healthcare and MHM Services.

Napier’s family recently settled with the companies for $500,000, but Berg said this case is part of a larger trend.

“My main concern is the profit motive taking precedence over patient care,” said Berg, who has taken out more than ten lawsuits against private health care companies. “The second one is that once the government entity contracts with the private provider, the government entity doesn’t provide any oversight.”

The outsourcing of health care in prisons to private companies is just one multi-billion dollar industry that has grown up around incarceration in the U.S. With that expansion has come mounting evidence of injury or death from improper medical care, or under-qualified or understaffed medical teams at prisons.

Mel Wilson, assistant director of Officer Workforce Studies at the National Association of Social Workers, says he is aware of “a lot of gaps in services” in for-profit private health care in prisons, especially for inmates with chronic conditions like HIV. Prisoners with HIV were found to die of the disease at twice the rate than that of the general population, according to HIV Symptoms, an information site on HIV.

The federal government outsources at least some aspects of their health-care operations, according to a spokesperson from the Bureau of Prisons, but they don’t completely hand over entire health-care operations in any of their facilities.

On the state level, however, the outsourcing of all health-care needs in a facility is more widespread. Those states include: Alabama, Connecticut, Delaware, Georgia, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Mexico, New York, Pennsylvania, Tennessee, Texas, Utah, Ohio, Louisiana, Colorado, Indiana, Florida, Illinois, Alaska, Mississippi, Kansas Nevada and Virginia.

The models of companies big and small

The companies that take these contracts are diverse in size, including small contractors, subsidiaries of larger private-prison firms and products of large-scale mergers. They include Corizon Healthcare, the result of combining PHS Corrections and Correctional Medical Services; MHM Services Inc.; Armor Correctional Health Services Inc.; Correct Care Solutions; the Birmingham, Ala.-based NaphCare and GEO Group’s GEO Care.

The recent merger that created Corizon Healthcare shows the scope of the industry. Prior to the merger, PHS Corrections had 57 contracts in 150 jails across 19 states, serving about 165,000 inmates, and Correctional Medical Services served 250,000 inmates in 19 states. Since the two companies merged, Corizon Healthcare has become the largest prison health-care provider in the country. It “provides quality healthcare services at over 400 correctional facilities across the country serving approximately 400,000 inmates in 31 states.”

The smaller private health-care companies also have no shortage of clients. MHM Services provides care for over 280,000 individuals in 14 states; GEO Care is in more than 60 facilities in more than 20 states and Correctional Care Solutions “cares for more than 57,000 lives” in 17 states.

Alex Friedmann, associate editor at the anti-privatization Prison Legal News, said there are two funding models for privatized health care in prisons. There is the cost-plus model, in which a vendor is reimbursed at a specific rate that includes actual costs and profit, and the flat-fee model, under which a company is given a flat-rate amount of money and everything they don’t use is profit, giving them the most incentive to cut costs.

“Medical care in public prisons isn’t great either,” said Friedmann. “Prison medical care in general is pretty abysmal, just even more abysmal in the private sector.”

Martin Ricketts, deputy director of Rehabilitation Programs at the New York City Department of Health and Mental Hygiene and a contracted clinical social worker with a New York-based private prison health-care firm, said many of the people entering prison have had little or no health care throughout their lives.

Though privatized health care is not a new concept for American society -– 70 percent of Americans get their health coverage through some form of private insurer — what makes the risks of privatized health care in prisons particularly worrisome is that prisoners have no other options.

“If you take all the bad parts of the HMO [Health Maintenance Organization] and put it in a monopoly situation, then you have the private prison medical-care industry,” said Friedmann. “But prisoners can’t go to another clinic, can’t pick a plan.”

Though Ricketts said the profit motive in private prison health care does disturb him, he sees the move to private care happening now because “the system is in transition anyhow.”

“Our whole system is more profit-driven than it used to be,” said Ricketts, who has been with the New York City Department of Health and Mental Hygiene for 25 years. “And health provides are being squeezed especially hard by the government as there are cuts in programs like Medicare and Medicaid.”

Garnering contracts in an age of cost-cutting

According to the ACLU Prison Project, it cost some states up to $47,000 to house a prisoner, and in a time of budget crisis, some legislators argue that outsourcing health-care services is cost efficient. Most recently, the Michigan Department of Corrections floated a proposal to privatize its entire prison health-care services, hoping to save up to $20 million.

“As a result of the economic downturn, states are taking steps to reduce their expenditures,” said Friedmann, though he doesn’t think it’s ever been proven or shown that costs are reduced by privatizing health care.

The New York Department of Corrections, for example, signed a 6-year contract with Correctional Medical Services in 2005 for $5,419,000, and then extended the contract for six months in February 2011 for $2,910,480, according to its contracts site. Not long after the CMS contract, NYDC also signed two contracts with NapCare Inc. in 2006 for more than $1 million each, and extended them at the start of 2011 for more than $1 million each.

The Correctional Medical Services contract was signed in 2005, only a year after a New York Times exposed widespread abuses and deaths of prisoners at Rikers Island under the care of Prison Health Service.

In Texas, the state is looking for a cheaper alternative to contracting prison healthcare with the University of Texas, the Texas Independent reported, but “the idea didn’t get too far with the Texas Legislature, in part because state Rep. Jerry Madden (R-Plano) kept reminding everyone there was no evidence privatization would save any money at all.”

Because there are “very few companies in competition,” said Friedmann, “they just gain other contracts” when one state kicks them out.

Prison Health Service (PHS) got its largest contract ever in 2000, $253 million for three years, from New York City after both Florida and Pennsylvania began official investigations of PHS into treatment of those states’ inmates. At the same time it received the contract, PHS was paying millions in legal fees.

Expansion

The range of health-care services provided by private companies has continued to broaden. PHS and Corizon also run nationwide pharmacies to supply their respective operations.

This makes cases like that of Ashley Ellis, who died in a PHS-run facility in Vermont from a lack of a vitamin that could be bought over the counter, all the more sad. Ellis, 23, died three days into her 30-day sentence. PHS did not have potassium in stock at the prison, and during Ellis’ stay, there was no doctor on staff and only one registered nurse, during just one shift.

Prison Legal News is currently involved in a lawsuit with PHS to release details of any lawsuits PHS has settled in Vermont, including the case of Ashley Ellis. PHS left the state the following January. The Northfield News reported Vermont was then off to look for its fifth private company in 14 years to run its prison health-care system.

“It’s tragic,” Friedmann said of Ellis’ death, “but illustrates that these companies are interested in only one thing.”

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