Use competitive bids on health care contracts in prisons
Competitively bid prison health-care contracts.
2011-12 budget includes language privatizing state prison health care services
Updated: Wednesday, June 1st, 2011 | By Aaron Sharockman
Florida Gov. Rick Scott's plan to reduce the size, scope and expense of state government included a campaign promise to privatize health care provided by the state's 100,000-inmate prison system.
"Competitively bidding health care contracts" for Florida's prison population would reduce government costs, Scott said.
Florida taxpayers will get a chance to see if Scott's right.
The 400-page state budget Scott signed into law on May 26, 2011, includes requirements that the Department of Corrections privatize health care services throughout the state.
Budget language requires the Department of Corrections to issue requests for proposals to private companies to provide health care services for all public prison facilities in three of the state's four prison "regions." The fourth region -- in South Florida -- is being required to go one step further and privatize all of its facilities, including health care services.
The northernmost counties included in the fourth region include Manatee, Hardee, Highlands, Okeechobee, and Indian River. Prisons to the north of those counties will remain publicly run with outsourced health care services. The rest, from those counties south, are slated to become privately run.
The private health care contracts are required to take effect between July 1, 2011, and June 30, 2012, and must result in a savings of at least 7 percent when compared to the state prison health care expenditures from the 2009-10 fiscal year, according to the budget language. The department spent around $400 million for health services in 2008-09, meaning a 7 percent cut would save taxpayers about $28 million.
The state has tried privatizing prison health care services before, with less than stellar results, according to a Florida Senate analysis.
In 2000, the Legislature directed the Department of Corrections to privatize health care services in South Florida facilities in an attempt to reduce health care costs. But the state ran into a slew of problems and eventually abandoned the idea.
Initially, the state experienced staffing shortfalls before it could execute a contract with a private vendor. State prison health care workers either transferred to facilities where they could keep their positions as state workers, or left altogether because their government jobs were being eliminated.
And once a deal was crafted -- with Wexford Health Sources in July 2001 -- other problems arose.
According to the Senate analysis, "there did not appear to be a system of internal controls," and there were "poor or nonexistent tracking mechanisms," and "unacceptable pharmacy systems." By 2003, the state Correctional Medical Authority -- which was set up to monitor health services provided to inmates -- encouraged the Department of Corrections to try to terminate the contract with Wexford for non-performance.
Costs also became an issue.
Wexford, in 2003, asked for a 10 percent per prisoner increase in the rates the state was paying for health services. The state said no, and the Legislature failed to approve any increase at all. Wexford sued. Eventually, the contract was terminated.
The state then tried to ink a deal in 2006 with a new vendor, Prison Health Services. But Prison Health Services complained about unexpected off-site hospitalization costs and the deal ultimately deteroriated.
Since then, the department has been using a hybrid model in South Florida where the state performs some services with state workers, and others through private contractors.
Now the state will try to take the privatization plan further, extending it to all prisons. Whether or not it's successful remains to be seen, but Scott has delivered on his promise to open prison health care to competitive bidding. We rate this Promise Kept.
(UPDATE: We failed to note that the privatization of health care services was not included in Scott's original budget request. It was included in the Senate proposal, and then agreed to by the House in conference committee).
Rick Scott, 7-7-7 plan, accessed June 1, 2011
SB 2000 (budget bill), accessed June 1, 2011
E-mail interview with DOC spokeswoman Gretl Plessinger, June 1, 2011
Correctional Medical Authority website, accessed June 1, 2011
OPPAGA, "Steps to Control Prison Inmate Health Care Costs Have Begun to Show Savings," January 2009
Florida Senate, "Privatization of Prison Health Care Services," October 2010
Orlando Sentinel, "Budget will package health-care, prison privatization in South Florida," May 3, 2011