Private companies enter prison health care

For three decades, private companies have stepped into the prison health care quagmire, helping states to control costs.

Fixed contracts for inmate medical care and prison management are a fiscal dream for state budget writers, and private companies can relieve states of liability in the event of inmate lawsuits.

As a result, the private medical correctional industry in the United States has grown into a $7.2 billion yearly enterprise, according to the U.S. Bureau of Justice Statistics. And the market is healthy, fueled by the nation’s growing number of inmates, 2.1 million in 2004.

Some state leaders maintain inmates are better off with medical experts working full time in health care instead of corrections.

The Council of State Governments, a national public policy group chaired by Delaware Gov. Ruth Ann Minner, published a favorable report last year on privatization titled “Containing Health Spending – Focus on Hospital Costs.”

Private prison health care is a sound option overall, the report suggests. “There have been several cases where courts found state corrections health care systems were providing poor care and needed to hire a private company until conditions improved.”

Corporations that provide an array of correctional services such as America Service Group, Inc., which manages inmate health care under its subsidiary, Prison Health Services of Tennessee, are closely monitored by investors.

To survive on government contracts, the companies have become politically savvy.

Prison Health Services, founded in Delaware by a nurse, gave $10,000 to the Republican National Committee during the 2000 election cycle. Correctional Corporation of America, which manages prisons and contracts for substance abuse services, contributes to Democrats and Republicans in several states.

Whether clout has anything to do with it or not, the prison medical industry is steadily growing, and companies like Prison Health Services, First Correctional Medical of Arizona and Correctional Medical Services of Missouri are becoming state prison staples.

Not everyone is convinced the shift is improving inmate health.

A 1994 study by the Virginia Department of Correction discovered problems when inmate health care was contracted out to private companies. Record-keeping, including medical records, sick-call logs and infectious disease documentation, was found to be poor.

Dr. Robert Cohen, who was director of Montefiore Rikers Island Health Services from 1982 to 1986, believes the care given by private vendors suffers because it is tied to the company’s bottom line.

“I have been in many settings where I have seen medical vendors rewarded for not providing care,” he said. “When care is tied directly to the profits of these companies, there will be serious problems on care in specific sensitive areas: specialty consultation and hospitalization. Delaying or denying services will make a lot of money for the company. When the state negotiates these contracts, that’s likely to happen.”

But as the cost of caring for inmates rises, states increasingly are turning to private industry.

In the executive summary of The Council of State Governments’ report, a policy analyst notes that while overall state budgets grew by 3.7 percent between 1998 and 2001, correctional health care costs grew by 10 percent.

The analyst wrote: “Unchecked these costs will surely plague cash-strapped states for years to come.”

THE PROVIDERS

Correctional Medical Services, of St. Louis

Founded in 1979.

Provides health care in 360 facilities with more than 285,000 inmates in 25 state, municipal and federal jails and prisons.

More than 6,000 employees and 450 independent contractors.

Working with Johns Hopkins University, created nonprofit Correctional Medical Institute to train and research prison health care.

Services: primary and specialty care, mental health, dental, optometry, substance abuse treatment, pharmacy, medical record-keeping, nursing, physician care, administration, utilization review and healthcare software.

Prison Health Services, of Brentwood, Tenn.

Founded in 1978 in Delaware.

Provides health care to approximately 247,000 inmates in 350 jails and prisons in 37 states.

More than 4,700 health care employees and support staff.

Public offering in 1991 as a subsidiary of America Service Group Inc., a corporation traded on NASDAQ. ASGR is the only publicly traded company in its field.

Services: primary and specialty care, telemedicine (directed by an off-site health professional) nursing, radiology, dental, mental health, substance abuse, recruitment, management and consulting, claims and pharmacy.

First Correctional Medical, of Tucson, Ariz.

Founded in 1995.

Provides health care to approximately 22,000 inmates.

Services: physician, nursing, mental health, dental.

(Information on company limited and officials declined to be interviewed.)