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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