States often pay private health care providers on a
per-inmate, per-day basis. That creates an incentive to cut costs. The market
forces that discipline private providers on the outside, however, don’t apply
in prison. There is no consumer choice. An inmate who doesn’t think medical
treatment is up to par can’t switch to another prison, let alone a different
hospital. And if the state, not the prisoner, is the customer, state officials
don’t always know what they’re getting. Record-keeping is notoriously poor, and
in some states, the department of corrections doesn’t even receive annual
reports from its vendors.
When prison health care was first privatized in a major way,
there was little reliable actuarial data, so it wasn’t clear what a reasonable
price structure would look like. Over time, governments figured that
information out and started writing better contracts, but that led to shrinking
profit margins for vendors.
There have been other stresses on the business model. What
was a growth area a decade ago is now stagnant. The state systems and large
jails that are likely to privatize have already done so. With few new contracts
out for bidding, providers low-ball one another in order to get business. That
leaves yet less money available for care.
Some argue that prison health would improve if it were
treated as part of the local community health safety net system. Communities
are not immune to what happens inside their prisons, whether it’s opioid
addiction or infectious disease. But most taxpayers on the outside don’t see
prison health problems affecting their own well-being. The reality may be that
treatment for those people society wants to punish will never become a top
priority.
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