“We're definitely growing here,” said Rich Hallworth, CEO of Brentwood, Tenn.-based Corizon and former chief operating officer of Tufts Health Plan in Boston.
The company's expansion in Florida is part of the broader, and controversial, movement by state and local governments to outsource prison healthcare to private contractors. About 20 states reportedly have outsourced all or part of their prison healthcare to vendors to cut costs. While hard data are not available on the prevalence of privatization, Dr. Marc Stern of the University of Washington, who formerly served as medical director of that state's corrections department, estimated that half of all state and local prisons and jails have outsourced healthcare services, and that these contracts are worth roughly $3 billion a year.
These contracts give financially strapped state and local governments a way to establish fixed, predictable costs for healthcare services through contracts based on a global, capitated rate per inmate. The deals allow state and local governments to avoid what they see as the higher costs associated with providing healthcare through public employees who often are unionized and receive benefits and pensions.
There is debate, however, about whether outsourcing actually saves money for corrections agencies. And the growth of private prison healthcare providers has fueled sharp criticism from prisoner advocates and legal aid groups that warn of a negative effect on quality of care, and from labor unions that see union jobs going to nonunionized private-sector contractors.
Powerful political and ideological pressures drive decisions about the provision of healthcare to prisoners. For one thing, it's hard for governors and state legislatures to support higher spending and better quality for inmates' care because of the punitive public attitudes toward prisoners. Some question why prisoners should receive healthcare at all.
Brenda Smith, a professor at the Washington College of Law at American University, described that attitude as: “We don't want you to be in better shape here than you would be in the community.”
As a result of those attitudes, Stern said that “whoever delivers prison healthcare is doing it on less than adequate funding because that's how much municipalities, state legislatures and county commissions are allocating.”
Hallworth estimated his privately held company, which has operations in 29 states, is three times the size of its next largest competitor. He said it provides healthcare services to 410,000 inmates at more than 400 correctional facilities across the country. Other sizable national players include Pittsburgh-based Wexford Health Sources, Nashville-based Correct Care Solutions, and St. Louis-based Centurion Managed Care, a joint venture between Centene Corp. and MHM Services, all of which are also privately held. In addition, there are smaller, regional operators.
Healthcare takes a big chunk of correctional budgets, so the market is potentially lucrative. For example, according to 2011-12 statistics from the Florida Department of Corrections, healthcare represented 19%, or $408.6 million, of its $2.1 billion budget—the largest line item after security and institutional operations.