In 2015, approximately 2,220,300 people were in custody in Federal and state prisons and local jails. These people need medical care, dental care, eye care, and behavioral and mental health services. Like everyone, prisoners’ medical problems range from the flu to AIDS, hepatitis C, and cancer.
The main companies involved in this sector are:
Centene Corporation, of St. Louis, MO (NYSE: CNC)
MHM Services, of Vienna, Virginia (OTC: MHMI)
Wellpath, (formerly Correct Care Solutions LLC), owned by HIG Capital of Miami, FL (Private Equity)
Corizon Health Inc., owned by Valitas Health Services, Inc., of St. Louis, MO (Private)
Armor Correctional Health Services, Inc., of Miami, FL (Private)
Emerald Healthcare Systems LLC, a subsidiary of Emerald Companies, of Lafayette, LA (Private)
Wexford Health Sources, Inc., of Pittsburgh, PA (Private)
Naphcare, of Vestavia Hills, AL (Private)
California Forensic Medical Group Incorporated, of Monterey, CA (Private)
Today, all states and the Federal government are required by law to provide adequate health care to people in prison, but this was not always the case. In 1972, a study of American jails by the American Medical Association found that 25% had no medical facilities whatsoever, 65.5% had first aid as the only medical care available, 28% had no regular sick call, and 11.4% did not have a physician on call. Prisoners in many states filed lawsuits to demand that jails and prisons provide adequate medical care. The landmark Supreme Court decision Estelle v. Gamble 429 U.S. 97 (1976)(No. 75-929) established a standard of “deliberate indifference to serious medical needs,” to apply the Eighth Amendment prohibition against cruel and unusual punishment to government obligations to provide healthcare to people in prison.
By 1995, at least 40 states, plus the District of Columbia, Puerto Rico, and the Virgin Islands, were under court order or consent decree regarding conditions, including health care, in either their entire system or in major facilities. In an effort to resolve these lawsuits and obey court orders, state and local governments needed to improve health care within severe budget constraints and overcrowding. More and more facilities are contracting with private companies to provide prison and jail health care. Basic health care costs rose from an average of $880 per prisoner in 1982 to $2,308 in 1995, to 2015 levels ranging from $11,793 in California to $2,181 in Illinois.
In 2011, states spent a combined $7.7 billion on correctional health, about 16% of all corrections spending for that year. Only 14 states still have prison health systems operated by the state; the remaining 36 states contract out at least a portion of their correctional health services to outside vendors. Of these 36 states, 24 contract out all correctional health services to private companies. Six other states have contracted out some services, three have contracted out all correctional health care to private companies, and three others have mixed contracts with private companies and their universities’ health systems. Types of services performed by private vendors include comprehensive care such as medical and mental health care, dental care, and specialized services such as dialysis, pharmaceutical services, or other medical specialties. Private prisons run by corporations such as CoreCivic, Inc. and GEO group generally have in-house medical departments. Prisoners are captives, and have no choice in their care-givers, and cannot access alternatives.
Private companies compete to submit the lowest bid in response to a Request for Proposal (RFP) from government entities. The first priority of these companies will always be cost-cutting, both to ensure they win the initial contract and to maximize their profits. Cost-cutting does not lead to quality medical care, and the methods used to cut costs are antithetical to improvement. Common cost-cutting strategies negatively impact the quality of health care available to people in prison:
- Expand the use of telemedicine – Long-distance medicine by video cuts costs because transporting prisoners to specialists and outside hospitals is enormously expensive -- guards and security must accompany the person at all times, including for hospital stays. In a jail or prison setting, telemedicine means that prisoners aren’t seen or physically examined by a doctor so examination results are often woefully inadequate and inaccurate. Telemedicine is used to provide some health care services to prisoners in 26 of 44 states according to a recent report.
- Require co-payments for medical visits – Requiring prisoners to pay for medical care was instituted to deter people from seeking medical care, discouraging so-called “frivolous” sick call visits. Because prisoners’ income is extremely limited, requiring co-payments means that sick people will go untreated, “minor” medical problems will worsen, infectious diseases may spread, and serious diseases like cancer may not be diagnosed. The National Commission for Correctional Health Care (NCCHC) has officially opposed instituting co-pays since 1996.
- Substitute generic medicines – A very common cost-cutting strategy is to substitute generic medicines for more expensive, brand-name medications. Unfortunately, generic medicines do not automatically duplicate the medical effects of a similar but more expensive medication. Prisoners subjected to substitutions may not experience the same results from generic medicines, and their health often deteriorates. Also, medications for many serious illnesses (like HIV/AIDS and Hepatitis C) do not have effective generic counterparts.
- Eliminate 24-hour services – Many prisons and jails have cut back on staffing hours, resulting in an absence of medical staff and emergency medical services when needed. Emergency room services and ambulance costs are expensive and require guards to accompany prisoners, so they are rarely accessed.
- Charge prisoners for medications – Many prisons and jails now require prisoners to buy their own medicine, including over-the-counter meds like aspirin or allergy medication. Most people in prison simply do not have incomes that allow these purchases, so prisoners are going untreated for minor illnesses that nonetheless cause them unnecessary pain and suffering.
- Divert or release sick and elderly individuals – Aging prisoners are one of the main causes of increased prison health care costs. People with life-threatening or serious illnesses, including mental illness, should not be incarcerated in the first place, as the prison environment is not conducive to good physical or mental health. Although many states and the Federal government have compassionate release programs for terminally ill prisoners, these programs are generally ineffective. Their guidelines are difficult to meet, requiring medical opinions that a person has 6 months or less to live, and posing procedural hurdles that are difficult to overcome.
- Reduce the number of referrals to outside hospitals and specialists – Transportation is a large part of the cost of referrals to outside hospitals, averaging $2000 per 24-hour period per inmate. Reducing the number of visits to outside providers also means that people are being denied access to necessary specialists and medical procedures.
Most of the health care corporations contracting with prisons are privately-owned. Corizon, the largest with annualized revenues of $1.5 billion, has operations in over 29 states and is 3 times the size of its next largest competitor. Corizon also has contracts in the jails of major cities, including New York, Philadelphia, and Atlanta. Other sizable privately-held corporations include Wexford Health Sources, Correct Care Solutions, Corrections Health Care, NaphCare, Armor Correctional Health Services, and others.
Centurion Managed Care is a joint venture of MHM Services and Centene Corporation, both publicly-held. Centurion provides health care services to 5 state prison systems through subsidiaries in each state.