In Mississippi, "the state's corrections commissioner on Friday said that [the GEO Group] would no longer operate three [private prison] facilities in the state, which held 4,000 inmates," NPR reported recently. Regrettably, Mississippi is seeking another contractor instead of taking their management in-house or downsizing youth facilities, as Texas has done.
Now to be clear, a state that, in the 21st century, voted 2-1 to keep the Confederate battle logo as part of its state flag (you don't really see it flying much in any of the come-to-Mississippi tourism commercials, do you?) doesn't really care what us Texans, DOJ, or anybody else thinks about them. They ousted Geo out of their own self interest, so as another of GEO's customers, Texas should naturally consider why.
The decision comes in the wake of legal setbacks for the company in federal court involving abuse allegations at a juvenile facility, though GEO insisted their departure is unrelated and adamantly denied the charges. Even so, "the judge's [March settlement] order ... said an investigation by the plaintiff's counsel 'uncovered pervasive violations of state and federal civil and criminal law and a wholesale lack of accountability by prison officials. For example, staff of the [facility] and those responsible for overseeing and supervising the youth engaged in sexual relationships with the youth; they exploited them by selling drugs in the facility; and the youth, 'handcuffed and defenseless[,] have been kicked, punched, and beaten all over their bodies.''"
To make matters worse,"Staff at the center failed consistently to report and investigate claims about excessive use of force, even though they witnessed many of the acts, the judge wrote. 'Given that the facility employs correctional staffers affiliated with gangs, no more can be expected.'" Finally, "The judge also noted a Justice Department report, which confirmed many of the allegations and said the state of Mississippi was 'deliberately indifferent' to the constitutional rights of the young inmates."
Whatever proximate cause anyone wants to attribute it to, when federal judges start saying things like that about your government contract, it's understandable one might decide it's time to pack up and leave town!
Texas has closed many of its juvenile facilities and may soon end up closing the rest of them, shifting juvenile supervision wholly to the counties and more aggressive community-based programming. It's too bad Mississippi looks like it will continue contracting management of these facilities instead of taking the opportuntiy to pull them in-house or, better, downsize. I'm not sure just finding another profit-driven management contractor will solve the problems the judge chastised them over.
RELATED: From Texas Prison Bidness, "GEO Group subject of lawsuit in prison death at Central Texas detention center." Also, "GEO guard indicted for contraband at Val Verde Correctional Center."
Tampilkan postingan dengan label Private prisons. Tampilkan semua postingan
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Rabu, 02 Mei 2012
Minggu, 01 April 2012
Mass incarceration may end not with a bang but a whimper, and a lot of whining
Regular Grits readers know well that many Texas counties in the last decade have built speculative jails with capacity far beyond their own county's needs hoping to house extra prisoners for profit, only to see the incarceration bubble begin to burst in the last year or so just as the supply of jail beds maxxed out. Mike Ward has a story today in the Austin Statesman ("County, private lockups sit empty, drain money as Texas prisoners dwindle," April 1) developing those themes, which opens:
One sometimes hears candidates speak approvingly of "running government like a business," but businesses routinely accept a LOT more risk than county governments can or should ever consider when making decisions, say, about who to incarcerate or how much taxpayer-backed debt to take on. These counties described in Ward's story tried to run their jails like a business, and look what happened!
Ward identifies some of the trends frequently discussed on this this blog to explain the surfeit of county lockups.
See related Grits posts:
The dusty West Texas ranch town of Anson, once known for its no-dancing law made famous in the 1984 movie "Footloose," has a dubious new claim to fame: the Jail to Nowhere.
Completed almost two years ago to house 1,100 state convicts who never arrived, the $35 million lockup sits empty at the edge of the town of about 2,300 people. Its promise of creating 195 jobs and a $5 million annual boost to the local economy is just a distant, and bitter, memory for most folks.
"It's been a huge disappointment," said Jones County Judge Dale Spurgin, who has lobbied state officials for two years without success for help to avoid an approaching default on the bonds that were issued to build the lockup.
"We've been holding our breath for 22 months. ... It looks like we're going to have to keep on holding it."
Spurgin is not alone.Retiring House Corrections Chairman Jerry Madden said at the end of the story that counties couldn't count on state government to bail them out, even if they funded the speculative investment with taxpayer-backed bonds. "The state is not in a position to bail them out," said Madden. "Sad to say, but they made a business choice, and they're going to have to live with it at some point."
In fact, research by the Austin American-Statesman shows, the situation is increasingly common in Texas and across the country because of declining crime rates, government budget cuts and increased use of treatment programs that have deflated a 20-year boom in building jails and prisons.
Although having fewer people locked up should be good news for Texas taxpayers, as the associated costs of Lone Star justice go down, the trend is drawing few cheers in Jones County and other places where taxes are going up to pay for the empty lockups.
One sometimes hears candidates speak approvingly of "running government like a business," but businesses routinely accept a LOT more risk than county governments can or should ever consider when making decisions, say, about who to incarcerate or how much taxpayer-backed debt to take on. These counties described in Ward's story tried to run their jails like a business, and look what happened!
Ward identifies some of the trends frequently discussed on this this blog to explain the surfeit of county lockups.
For a time, Texas rode the wave with the largest number of privately financed or run prisons and jails of any state — 60 in all, by this year.Judging from this evolving grass roots narrative of sad, empty jails built on spec in rapidly depopulating rural areas, sometimes backed by bonds approaching junk status that could default at any time, mass incarceration may go out not with a bang but a whimper. And a lot of whining, if county pols quoted in the story are any indication.
Then, about five years ago, growth in the number of state prisoners nationally began to gradually level off, and states that had sent their overflow to the private Texas lockups started keeping them at home again. The private lockups looked to a booming new market: illegal immigrants.
"The feds are pulling back right now, as well, and that, plus fewer inmates here in Texas, is the reason a lot more beds are empty now," said Adan Munoz Jr., the Jail Standards Commission's executive director.
"The other reason is that a lot of counties are doing pre-trial diversion, so they don't keep as many people in jail, because it costs less money that way. ... Budgets are tight."
See related Grits posts:
- McLennan Commissioners may end speculative private prison partnership
- Opposing mass incarceration means opposing private prison growth opportunities
- Obama Administration hands lucrative, belated Christmas gift to private prison industry
- Bearish on private prison stocks if mass-incarceration bubble burst
- 'Texas prison boom going bust'
- 'Private prison promises leave Texas towns in trouble'
- Private prison bubble bursting? Empty, speculative jails in Texas
- Privatizing Harris County Jail would save money by cutting guard pay, benefits
- Jailing for profit spurs inmate releases in two Texas counties
- When fewer inmates is a big problem: Perverse incentives at the McLennan County Jail
- Jones County pays for empty jail as detention bubble bursts
Sabtu, 31 Maret 2012
McLennan Commissioners may end speculative private prison partnership
Bob Libal at Texas Prison Bidness pointed out a local TV news story out of Waco focused on the fallout from a debt-trap contract jail deal with private prison company Community Education Centers (CEC) that looms over the county budget like a financial Sword of Damocles. County commissioners are considering rescinding their contract with CEC - just as Liberty County is now contemplating after their jail population lowered substantially - because of a lack of available contracts to fill hundreds of unneeded jail beds built as part of an entrepreneurial partnership with the company.
Today Texas jails overall are experiencing substantial vacancy rates in part because of a wave of speculative building by counties since the turn of the century. Statewide, according to the Commission on Jail Standards, about a third of county jail beds were empty as of March 1. Jail populations are plummeting for reasons no one can entirely explain. So many Texas counties that bet on the come - overbuilding their jails hoping to cash in on contract incarceration through public-private partnerships like this one - now must eat their losses, or rather pass them on to taxpayers. And that's where McLennan County Commissioners find themselves today.
TPB adds that "Critiques of CEC's handling of immigration detainees continued [recently] as New York University and New Jersey immigrant rights groups issued a report claiming the company's Delaney Hall facility does not 'fully comply with ICE standards, the report documents problems with everything from access to legal assistance and worship services to adequate health care, food and other basic services for detainees.' (Washington Post, March 23)"
In other private prison news, reports Yahoo! Finance, "SunTrust downgraded Corrections Corp citing expectations for mixed news regarding state budgets and lower occupancy at some facilities." Apparently they don't expect states to take the company up on its recent buy-leaseback offer. Grits has argued that Corrections Corp and, even more so, its main competitor the GEO Group, are too overloaded with debt to justify rosy financial projections, particularly if the incarceration bubble continues to burst.
Today Texas jails overall are experiencing substantial vacancy rates in part because of a wave of speculative building by counties since the turn of the century. Statewide, according to the Commission on Jail Standards, about a third of county jail beds were empty as of March 1. Jail populations are plummeting for reasons no one can entirely explain. So many Texas counties that bet on the come - overbuilding their jails hoping to cash in on contract incarceration through public-private partnerships like this one - now must eat their losses, or rather pass them on to taxpayers. And that's where McLennan County Commissioners find themselves today.
TPB adds that "Critiques of CEC's handling of immigration detainees continued [recently] as New York University and New Jersey immigrant rights groups issued a report claiming the company's Delaney Hall facility does not 'fully comply with ICE standards, the report documents problems with everything from access to legal assistance and worship services to adequate health care, food and other basic services for detainees.' (Washington Post, March 23)"
In other private prison news, reports Yahoo! Finance, "SunTrust downgraded Corrections Corp citing expectations for mixed news regarding state budgets and lower occupancy at some facilities." Apparently they don't expect states to take the company up on its recent buy-leaseback offer. Grits has argued that Corrections Corp and, even more so, its main competitor the GEO Group, are too overloaded with debt to justify rosy financial projections, particularly if the incarceration bubble continues to burst.
Kamis, 15 Maret 2012
Opposing mass incarceration means opposing private prison growth opportunities
Several headlines about the private-prison industry caught Grits' eye and merit readers' attention. First, apparently most states, including Texas, are rejecting Correction Corporation of America's offer (see Grits' discussion) to purchase state-owned prisons if the states would guarantee 90% occupancy for 20 years. Let's hope that trend continues.
The blog Texas Prison Bidness points out that previous, similar deals between states and the company (ticker symbol: CXW) haven't panned out so well, quoting an ACLU-Ohio's assessment that, “While CCA claims it will save Ohioans $3 million per year, a recent report analyzing the state's contract shows that taxpayers will actually lose money over the next 20 years. Of course, this is not earth-shattering news, as other fiscal analyses in Ohio and Arizona have produced similar results.”
On the flip side, a new immigration detention center in Karnes County, TX supposedly is a kinder and gentler version of involuntary detention for economic immigrants and other low-risk detainees awaiting deportation. The facility is the first of what may be a new market for private prison companies in "softer" incarceration venues, though holding people against their will would remain at the heart of their business model. The changes come in response to complaints from advocates, and to a large extent outside this facility, those complaints still hold. “[L]ast fall, a report put out by an international human rights organization suggested that in spite of promises to make detention centers more liveable, 'the overwhelming majority of detainees are still held in jails or jail-like facilities.'”
For Grits' part, my primary concern with immigration detention doesn't just stem from treating civil detainees, including blameless children, like criminals, though that's a serious problem. My beef stems from the fact of their long-term incarceration in the first place, even if most of it is supposedly the equivalent of pretrial detention before their case is heard before backlogged federal judges. Grits believes that, at this historical juncture, it's time to scale back mass-incarceration in all its forms, and immigration detention has been the primary growth sector for new incarceration in the 21st Century, particularly under the Obama Administration, even as crime has declined and criminal incarceration rates have peaked and begun to drop.
To me, large-scale immigration detention is yet another example of using the mechanisms of the criminal justice system to confront social problems that are more readily resolved by other means. While recognizing that some incarceration is necessary and socially beneficial, IMO the United States - and Texas, even more so - have long past the point where the marginal costs of increased incarceration exceed the marginal benefit, and today we're throwing good money after bad, in part in deference to the influential private prison lobby.
Really, though, the debate shouldn't be over whether state-run beds are superior to private ones, but whether current incarceration levels are justified at all. The industry is a parasite, but it's also an expression in many ways of misguided public sentiment favoring mass incarceration that IMO is slowly but steadily eroding . Grover Norquist famously said he hoped to shrink the federal government until it was small enough to drown in a bath tub. Grits harbors similar, perhaps fantastic hopes for one day shrinking the overall market for private-prison beds.
The blog Texas Prison Bidness points out that previous, similar deals between states and the company (ticker symbol: CXW) haven't panned out so well, quoting an ACLU-Ohio's assessment that, “While CCA claims it will save Ohioans $3 million per year, a recent report analyzing the state's contract shows that taxpayers will actually lose money over the next 20 years. Of course, this is not earth-shattering news, as other fiscal analyses in Ohio and Arizona have produced similar results.”
On the flip side, a new immigration detention center in Karnes County, TX supposedly is a kinder and gentler version of involuntary detention for economic immigrants and other low-risk detainees awaiting deportation. The facility is the first of what may be a new market for private prison companies in "softer" incarceration venues, though holding people against their will would remain at the heart of their business model. The changes come in response to complaints from advocates, and to a large extent outside this facility, those complaints still hold. “[L]ast fall, a report put out by an international human rights organization suggested that in spite of promises to make detention centers more liveable, 'the overwhelming majority of detainees are still held in jails or jail-like facilities.'”
For Grits' part, my primary concern with immigration detention doesn't just stem from treating civil detainees, including blameless children, like criminals, though that's a serious problem. My beef stems from the fact of their long-term incarceration in the first place, even if most of it is supposedly the equivalent of pretrial detention before their case is heard before backlogged federal judges. Grits believes that, at this historical juncture, it's time to scale back mass-incarceration in all its forms, and immigration detention has been the primary growth sector for new incarceration in the 21st Century, particularly under the Obama Administration, even as crime has declined and criminal incarceration rates have peaked and begun to drop.
To me, large-scale immigration detention is yet another example of using the mechanisms of the criminal justice system to confront social problems that are more readily resolved by other means. While recognizing that some incarceration is necessary and socially beneficial, IMO the United States - and Texas, even more so - have long past the point where the marginal costs of increased incarceration exceed the marginal benefit, and today we're throwing good money after bad, in part in deference to the influential private prison lobby.
Really, though, the debate shouldn't be over whether state-run beds are superior to private ones, but whether current incarceration levels are justified at all. The industry is a parasite, but it's also an expression in many ways of misguided public sentiment favoring mass incarceration that IMO is slowly but steadily eroding . Grover Norquist famously said he hoped to shrink the federal government until it was small enough to drown in a bath tub. Grits harbors similar, perhaps fantastic hopes for one day shrinking the overall market for private-prison beds.
Jumat, 09 Maret 2012
Texas, other states should decline Corrections Corporation of America's offer to buy prisons
According to the Houston Chronicle's Patti Hart and other reports, the letter Corrections Corporation of America (CXW on the stock exchange) sent to 48 states last month offering to buy their old facilities included a perverse and unconscionable set of proposed conditions: CXW would only buy the prisons "if the selling state would guarantee to keep it filled [to] 90 percent capacity for 20 years."
With incarceration declining nationwide, I understand why CXW is seeking long-term stability. It's the same reason states should turn them down. It appears the incarceration bubble is bursting, with immigration detention the only near-term growth sector in private prisons' portfolio. Texas state prisons are full but incarceration rates are declining, with crime falling at an even steeper rate. Last year for the first time ever, Texas closed a prison unit instead of building or leasing more. In the past four years, the state has reduced the juvenile prison population by more than 2/3, including closing several facilities including a private one in Coke County.
At the county level, despite pockets of overcrowding (caused mostly by local elected officials' aberrant decision making), county jails statewide are terribly overbuilt, operating collectively at 68.4% capacity as of February 1, with 93,535 jail beds statewide and only 63,985 inmates to fill them. Imagine what a fix counties would be in if 5 years ago they'd sold their facilities to a private company and guaranteed them 90% capacity!
CXW and (even more so) its chief competitor the GEO Group are already overladen to the gills with debt, so the offer only makes sense if states agree to guarantee them a 90% occupancy rate two decades into the future, and any state pol who fell for that would be buying a pig in a poke. Conversely, if the company were to buy old prisons without such a guarantee, they'd be the suckers. State Senate Criminal Justice Committee Chairman John Whitmire has been quoted in press reports saying he disfavors the idea, and Grits hopes Texas officials as well as leaders in other states universally follow his lead.
With incarceration declining nationwide, I understand why CXW is seeking long-term stability. It's the same reason states should turn them down. It appears the incarceration bubble is bursting, with immigration detention the only near-term growth sector in private prisons' portfolio. Texas state prisons are full but incarceration rates are declining, with crime falling at an even steeper rate. Last year for the first time ever, Texas closed a prison unit instead of building or leasing more. In the past four years, the state has reduced the juvenile prison population by more than 2/3, including closing several facilities including a private one in Coke County.
At the county level, despite pockets of overcrowding (caused mostly by local elected officials' aberrant decision making), county jails statewide are terribly overbuilt, operating collectively at 68.4% capacity as of February 1, with 93,535 jail beds statewide and only 63,985 inmates to fill them. Imagine what a fix counties would be in if 5 years ago they'd sold their facilities to a private company and guaranteed them 90% capacity!
CXW and (even more so) its chief competitor the GEO Group are already overladen to the gills with debt, so the offer only makes sense if states agree to guarantee them a 90% occupancy rate two decades into the future, and any state pol who fell for that would be buying a pig in a poke. Conversely, if the company were to buy old prisons without such a guarantee, they'd be the suckers. State Senate Criminal Justice Committee Chairman John Whitmire has been quoted in press reports saying he disfavors the idea, and Grits hopes Texas officials as well as leaders in other states universally follow his lead.
Rabu, 18 Januari 2012
Obama Administration hands lucrative, belated Christmas gift to private prison industry
In a major victory for private prison lobbyists, the Obama Administration has announced a dramatic change in incarceration policy regarding economic migrants, aiming to incarcerate pre-trial and adjudicate a much larger percentage of non-criminal immigration cases instead of using "voluntary returns," or just shipping economic immigrants back to Mexico, typically without processing through the court system. Illegal immigration has plummeted since the onset of high unemployment in the United States, so this policy props up a massive federal immigration bureaucracy built up during the last two presidential administrations with a new, enhanced raisson d'etre. Reported the El Paso Times ("US will toughen voluntary returns," Jan. 18):
As a byproduct of that electoral political agenda, private prison companies and potentially even counties that built speculative prisons might see a wave of new, taxpayer-funded contracts. That's a disappointment for anyone who hoped federal expenses might fall after the rate of growth in immigration detention finally seemed to be receding with the deflated economy. As usual, though, incarceration rates are driven mostly by policy decisions as opposed to the actual scope of the problem the state is trying to solve. That's why immigration detention may increase while illegal immigration drops, just as incarceration rates may rise even while crime is dramatically falling.
A US Attorney in California explained the fundamental difference in the new approach to CBS News: "It has not been the practice ... to target and prosecute economic migrants who have no criminal histories, who are coming in to the United States to work or to be with their families. ... We do target the individuals who are smuggling those individuals." Now in many cases that could change, if the Border Patrol gets their way. Prosecuting non-criminal migrants themselves opens up such a vast new pool of incarceration possibilities that I won't be surprised to see stocks at Geo Group (GEO) and Corrections Corporation of America (CXW) jump in response.
As a middle-aged man, from a purely selfish perspective, I want as many immigrants as possible here, low-waged and high, all legal, amnestied, documented, and paying into social security and Medicare, preferably, if only so there will be enough workers footing the bill when it's my turn to benefit from those programs. Immigration benefits the economy, just as a large proportion of Texas' much-admired economic miracle may be attributed to large-scale migration to the state (including illegal immigration, most of which IMO should have been formally allowed), but that's a different polemic for another day. Setting aside one's big-picture stance on immigration, this particular policy is a solution quite literally searching for a problem (except, I suppose, for the problems of the punishment-for-profit crowd), providing little additional deterrent or benefit, but with a large price tag attached and lucrative new contracts handed out like candy to private-prison interests. Pointless policy, dumb idea.
El Paso lawyer Carlos Spector, who specializes in immigration and asylum issues, said he does not believe there are enough federal prosecutors and judges to handle all the potential cases that could be referred to the U.S. Attorney's Office. "We have about 5,000 cases on the docket of the Downtown courthouse," Spector said. "We are waiting two to three years to get a hearing for some cases.Not only are there dangers from cartels (busloads of economic migrants have been massacred as part of the savage violence in northern Mexico), but "Officials of Mexico's National Commission for Human Rights, a government agency, said that 3,000 Mexican migrants died while crossing the border between 2000 and 2010, many of whom got lost without food and water in the desert." So incredibly desperate people are already willing to risk their lives from cartels and the elements - the death penalty, if you will - to get into the United States. That's far more people than have been executed over the same period for capital murder! Think about it: As a practical matter, will the possibility of a year or two in a Geo-Group run prison and formal deportation really be a big deterrent for such folk? This policy is much more about Democratic positioning among independents and conservative Dems before a presidential election than addressing dysfunctionality in the immigration system.
"With the apprehensions being down so much, the Border Patrol really needs to justify all the money it's been getting for its budget," Spector said. "It's like bringing the soldiers back from Afghanistan, and then once they're here, what do you do with them?"
Spector said Mexico's drug cartel wars also have created new dangers for immigrants seeking to cross the border illegally. Mexican authorities have implicated violent cartels in the kidnappings and murders of hundreds of immigrants, usually stemming from disputes between rival human smugglers associated with the drug cartels.
As a byproduct of that electoral political agenda, private prison companies and potentially even counties that built speculative prisons might see a wave of new, taxpayer-funded contracts. That's a disappointment for anyone who hoped federal expenses might fall after the rate of growth in immigration detention finally seemed to be receding with the deflated economy. As usual, though, incarceration rates are driven mostly by policy decisions as opposed to the actual scope of the problem the state is trying to solve. That's why immigration detention may increase while illegal immigration drops, just as incarceration rates may rise even while crime is dramatically falling.
A US Attorney in California explained the fundamental difference in the new approach to CBS News: "It has not been the practice ... to target and prosecute economic migrants who have no criminal histories, who are coming in to the United States to work or to be with their families. ... We do target the individuals who are smuggling those individuals." Now in many cases that could change, if the Border Patrol gets their way. Prosecuting non-criminal migrants themselves opens up such a vast new pool of incarceration possibilities that I won't be surprised to see stocks at Geo Group (GEO) and Corrections Corporation of America (CXW) jump in response.
As a middle-aged man, from a purely selfish perspective, I want as many immigrants as possible here, low-waged and high, all legal, amnestied, documented, and paying into social security and Medicare, preferably, if only so there will be enough workers footing the bill when it's my turn to benefit from those programs. Immigration benefits the economy, just as a large proportion of Texas' much-admired economic miracle may be attributed to large-scale migration to the state (including illegal immigration, most of which IMO should have been formally allowed), but that's a different polemic for another day. Setting aside one's big-picture stance on immigration, this particular policy is a solution quite literally searching for a problem (except, I suppose, for the problems of the punishment-for-profit crowd), providing little additional deterrent or benefit, but with a large price tag attached and lucrative new contracts handed out like candy to private-prison interests. Pointless policy, dumb idea.
Senin, 02 Januari 2012
Private Prison Foibles
Last week the blog Texas Prison Bidness gave us their list of the top 5 private prison stories in 2011:
1. CCA takeover would make Harris County Jail largest private prisonIn related news, at this point the McLennan County Jail in Waco appears cursed by the foolish management decision to build excess capacity and let a private company manage the facility. Now they're stuck with an empty, money-losing jail and a management contractor accused of abuse that recently cost them an immigration contract with the feds. Reported KXXV-TV (Dec. 27):
2. Resistance to private immigrant detention centers grows
3. ALEC and private prison lobbying exposed
4. ICE's 'detention reforms' benefit private prison contractors
5. Lawmakers attempt to privatize state jails
The ICE investigation must have come up with something if they transferred all their inmates as a result, so I suspect there's more than "rumors" behind the decision to remove them. It's difficult to feel sorry for McLennan County commissioners, who brought this on themselves, but of course it's taxpayers who bear the true burden. This star-crossed project was ill-conceived from the beginning, with today's financial woes mere recompense for commissioners' decision to gamble with taxpayer money on unneeded, speculative jail construction.The McLennan County Commissioners Court is giving Community Education Centers (CEC), a third party management company, more time to generate revenue at one local jail, despite their company being accused of abuse at another area facility.County commissioners decided to renew a contract with the CEC for the downtown McLennan County jail Tuesday morning. The jail is currently empty while improvements are being made to bring the facility to state guidelines.The court agreed to extend the CEC's operation of the downtown jail just days after the county had learned about abuse claims from the McLennan County Jack Harwell Jail (another facility ran by the CEC)."I really don't know what is involved till we get the facts in," said Kelly Snell, McLennan County Commissioner. "I can't speculate on rumors."The rumors include complaints filed by inmates about not receiving medical treatment and proper care while in the Harwell facility.Immigration and Customs Enforcement (ICE) recently moved all 80 of their existing inmates out of that facility after it investigated those complaints.
See prior Grits posts:
- When fewer inmates is a big problem: Perverse incentives and the McLennan County Jail
- McLennan County cuts jail pharmacy spending as doomsday deal devolves
- Will county cost cutting doom speculative jail in Waco?
- McLennan County on the hook for bonds on privatized jail
- Waco taxpayers likely on the hook for jail they were promised would pay for itself
- 'Doomsday Deal': Prison for profit scheme in Waco going bust for lack of inmates
- McLennan County private jail deal creates perverse incentives
Selasa, 20 Desember 2011
Privatization push confirmed at Harris County jail
On Sunday, Grits broke the news that Corrections Corporation of America had submitted a bid to manage the Harris County Jail, citing information given to investors about a county-issued RFP which hadn't been reported in the local media. Last night, the local Fox TV affiliate confirmed it:
FOX 26 News obtained this news letter from Corrections Corporation of America, a private prison operation firm:
"We are also very excited about the opportunities that are before the industry and for which we feel well positioned. We're awaiting a decision from Arizona on its 5,000 bed request for proposal as well as a managed-only opportunity for approximately 9,000 beds in Harris County, Texas.”
County officials confirm private talks are underway to consider privatizing the county jail.
Minggu, 18 Desember 2011
Will Harris County soon privatize jail, let Corrections Corporation of America manage it?
Grits had noticed last month that the two largest private prison companies - the Geo Group and Corrections Corporation of America (CXW) - had been said to have "bearish technicals" by analysts at Market Investment Watch, which jibed with Grits' past assessments that both firms (but especially Geo) were excessively laden with debt. So I was surprised to see that a Zacks.com analyst had recently rated Corrections Corporation of America a "buy" stock. Since Grits mentioned the recent negative assessment, I decided I should report this positive one, as well.
Quite remarkably, an accompanying article from Zacks said part of the company's optimism stemmed from the fact that they're currently "awaiting the decision" on a "managed-only opportunity for about 9,000 beds in [the] Harris County, Texas" jail. I knew Harris County had agreed to "study" privatization, but "awaiting the decision"? Does Corrections Corporation of America really believe they may soon manage the Harris County Jail under contract? Is that delusional, or do they know something the rest of us don't?
Perhaps they do. According to a knowledgeable source in Harris County, the Office of Purchasing and Management Services told county commissioners they couldn't assess potential savings without doing an actual request for proposals (RFP), so they did one. Bids are sealed, said my source, and nobody is supposed to know who submitted one. But clearly from the Zacks report, Corrections Corporation of America put in a bid and is telling investment analysts the contract might boost their bottom line in the near term. That seems a tad presumptuous.
Grits still thinks the two largest private-prison firms are risky investment bets for two reasons: Both are too overloaded with debt, and I think (perhaps wishfully) we may be on the cusp of seeing the "incarceration bubble" burst. That's particularly true in the industry's main growth area - immigration detention - so I wouldn't endorse a long-term favorable assessment for these stocks.
Certainly, of the two, CXW's situation appears far preferable to Geo's, which really is operating on an extremely over-leveraged basis (i.e., they issued way too much debt to gobble up competitors instead of winning new contracts through competitive bidding). If Geo didn't look like such a dog, I doubt CXW would look nearly as good to Zack's analysts except by comparison. But I question their long-term growth potential when crime rates are declining, states are de-incarcerating, both companies have spotty health and safety records, and folks like Newt Gingrich and Rick Perry are out on the campaign trail touting comprehensive immigration reform.
Even more specifically, I don't think Harris County is likely to privatize its jail anytime soon, to the extent that was cause for extra optimism by analysts. When it was discussed last, the votes didn't seem to be there. Plus any savings would come from cutting guard pay and benefits, and that won't happen without some sort of political rebellion/retaliation from the folks who currently staff the facility. I know Grits won't be the only one caught by surprise if Santa brings CXW a new contract anytime soon to run the jail in Harris County.
Quite remarkably, an accompanying article from Zacks said part of the company's optimism stemmed from the fact that they're currently "awaiting the decision" on a "managed-only opportunity for about 9,000 beds in [the] Harris County, Texas" jail. I knew Harris County had agreed to "study" privatization, but "awaiting the decision"? Does Corrections Corporation of America really believe they may soon manage the Harris County Jail under contract? Is that delusional, or do they know something the rest of us don't?
Perhaps they do. According to a knowledgeable source in Harris County, the Office of Purchasing and Management Services told county commissioners they couldn't assess potential savings without doing an actual request for proposals (RFP), so they did one. Bids are sealed, said my source, and nobody is supposed to know who submitted one. But clearly from the Zacks report, Corrections Corporation of America put in a bid and is telling investment analysts the contract might boost their bottom line in the near term. That seems a tad presumptuous.
Grits still thinks the two largest private-prison firms are risky investment bets for two reasons: Both are too overloaded with debt, and I think (perhaps wishfully) we may be on the cusp of seeing the "incarceration bubble" burst. That's particularly true in the industry's main growth area - immigration detention - so I wouldn't endorse a long-term favorable assessment for these stocks.
Certainly, of the two, CXW's situation appears far preferable to Geo's, which really is operating on an extremely over-leveraged basis (i.e., they issued way too much debt to gobble up competitors instead of winning new contracts through competitive bidding). If Geo didn't look like such a dog, I doubt CXW would look nearly as good to Zack's analysts except by comparison. But I question their long-term growth potential when crime rates are declining, states are de-incarcerating, both companies have spotty health and safety records, and folks like Newt Gingrich and Rick Perry are out on the campaign trail touting comprehensive immigration reform.
Even more specifically, I don't think Harris County is likely to privatize its jail anytime soon, to the extent that was cause for extra optimism by analysts. When it was discussed last, the votes didn't seem to be there. Plus any savings would come from cutting guard pay and benefits, and that won't happen without some sort of political rebellion/retaliation from the folks who currently staff the facility. I know Grits won't be the only one caught by surprise if Santa brings CXW a new contract anytime soon to run the jail in Harris County.
Selasa, 22 November 2011
Bearish on private prison stocks if mass-incarceration bubble bursts
Over the past several years Wall-Street analyst types have been touting private prisons as a wise long-term investment, primarily for three reasons:
For several years now, Grits has believed that, examining the underlying fundamentals, both firms (particularly GEO) are far too laden with debt to justify bullish advice to investors. GEO has warned in corporate filings that its debt load could soon require them to divert money from operations to pay for debt amassed to gobble up competitors. Similarly, CCA's latest 10-K report on file with the SEC says its large debt could "require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness."
Even more than their massive debt loads, though, a bigger potential problem for these companies may be the possibility that we're nearing the end of the largest incarceration boom (read: bubble) in the history of the planet. The three bulleted factors above all could easily reverse in the next few years. More states are contemplating de-incarceration measures because of budget shortfalls, for example, and states like Texas have seen their incarceration rates decline. If states implement such policy changes on a wider scale, it could reverse the upward trend mentioned in the first bullet and debunk the premise of the second - that incarceration rates will continue to increase even if states can't afford new prison construction.
Meanwhile, the boom in immigration detention is a short to medium-term phenomenon at best, driven largely by nativist sentiments that will not prevail long-term in political circles because of their radical impracticality. Even Rick Perry has suggested a program to let the 12-14 million undocumented immigrants get visas to stay here legally, while bipartisan proposals for comprehensive immigration reform, like the bygone McCain-Kennedy legislation, would likely go even farther. Immigration detention on its present scale is at best a short-term fix that will decline dramatically whenever a long-term political solution, of any sort, is finally reached. The companies' long-term debt, however, won't go away just because their number of contract beds decline.
If Grits is right that we're nearing the end of America's mass-incarceration bubble - and admittedly that may be wishful thinking, though I believe there are signs of a sea change in both elite and public opinion on the topic - then in coming years these companies' high debt loads will become entirely untenable. As CCA put it in their 10-K:
- The rise of mass incarceration over the last three decades, assuming the trend will continue
- State budget cuts reducing the likelihood that state governments will spend to build more prisons, and
- A massive increase in immigration detention policies that began under Bush II and escalated dramatically under Obama.
For several years now, Grits has believed that, examining the underlying fundamentals, both firms (particularly GEO) are far too laden with debt to justify bullish advice to investors. GEO has warned in corporate filings that its debt load could soon require them to divert money from operations to pay for debt amassed to gobble up competitors. Similarly, CCA's latest 10-K report on file with the SEC says its large debt could "require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness."
Even more than their massive debt loads, though, a bigger potential problem for these companies may be the possibility that we're nearing the end of the largest incarceration boom (read: bubble) in the history of the planet. The three bulleted factors above all could easily reverse in the next few years. More states are contemplating de-incarceration measures because of budget shortfalls, for example, and states like Texas have seen their incarceration rates decline. If states implement such policy changes on a wider scale, it could reverse the upward trend mentioned in the first bullet and debunk the premise of the second - that incarceration rates will continue to increase even if states can't afford new prison construction.
Meanwhile, the boom in immigration detention is a short to medium-term phenomenon at best, driven largely by nativist sentiments that will not prevail long-term in political circles because of their radical impracticality. Even Rick Perry has suggested a program to let the 12-14 million undocumented immigrants get visas to stay here legally, while bipartisan proposals for comprehensive immigration reform, like the bygone McCain-Kennedy legislation, would likely go even farther. Immigration detention on its present scale is at best a short-term fix that will decline dramatically whenever a long-term political solution, of any sort, is finally reached. The companies' long-term debt, however, won't go away just because their number of contract beds decline.
If Grits is right that we're nearing the end of America's mass-incarceration bubble - and admittedly that may be wishful thinking, though I believe there are signs of a sea change in both elite and public opinion on the topic - then in coming years these companies' high debt loads will become entirely untenable. As CCA put it in their 10-K:
A decrease in occupancy levels could cause a decrease in revenues and profitability. While a substantial portion of our cost structure is generally fixed, a significant portion of our revenues are generated under facility management contracts which provide for per diem payments based upon daily occupancy. We are dependent upon the governmental agencies with which we have contracts to provide inmates for our managed facilities. We cannot control occupancy levels at our managed facilities. Under a per diem rate structure, a decrease in our occupancy rates could cause a decrease in revenues and profitability. When combined with relatively fixed costs for operating each facility, regardless of the occupancy level, a decrease in occupancy levels could have a material adverse effect on our profitability.These companies' biggest nightmare would be a combination of drug legalization and comprehensive immigration reform. Again from CCA's 10-K:
The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them.Investing in private prisons basically is a wager that the United States has such a dysfunctional political system that we can't solve the immigration question or scale back the drug war, ever, and for many years that's seemed like a prescient gamble. Betting on the intelligence and competence of government officials will always get you poor odds. But if that longshot comes in and America's mass-incarceration bubble finally bursts, investors in both these companies will take a huge hit. The "bearish technicals" identified at CCA and the GEO Group may just indicate that, at this particular point in history, those long odds could be getting shorter. I certainly hope so.
Rabu, 16 November 2011
A glimpse at private prison propaganda
Using the Public Information Act, the blog Texas Prison Bidness got hold of a lobby packet (pdf) sent by Corrections Corporation of America to the Governor urging him to support federal legislation to block cell phones at prisons. It also includes fact sheets about each of CCA's Texas facilities. Scroll toward the end for some of the more propagandistic pieces reacting to criticisms of the industry.
Minggu, 13 November 2011
Now-defunct TYC-Geo contract cited as example of revolving-door oversight
Grits hadn't had a chance until this morning to take a look at the new report on private prisons out of ACLU national that's been getting lots of press: "Banking on bondage: Private prisons and mass incarceration" (pdf). Here are a few notable quotes:
The report also documents the impact of expanded federal immigration detention practices which has been a hobby horse of this blog for many years. "The past decade has borne out the prediction that 9/11 would be good business for private prisons. By 2010, the average daily population of immigration detainees stood at 31,020, more than a 50% increase over the 2001 level (and an increase of roughly 450% over the 1994 level)."
One notable critique held that "Many in the private prison industry, however, once served in state corrections departments, and numerous state corrections officials formerly worked for private prison companies. In some cases, this revolving door between public corrections and private prisons may contribute to the ability of some companies to win contracts or to avoid sufficient scrutiny from the corrections departments charged with overseeing their operations." Moreover, the main case study used to support this contention (p. 38 of the pdf) was a Texas case: A disastrous private contract between the GEO Group and the soon-to-be-defunct Texas Youth Commission, which had hired former Geo employees to monitor their contract to manage the since-closed Coke County facility.
In both juvenile and adult settings, the "revolving door" phenomenon is something about which one hears numerous back-room whispers, but seldom fact-based documentation. It happens, but how commonly? I've never seen hard data, but could cite many anecdotes. Most blatantly, federal Bureau of Prisons chief Harvey Lappin this year left federal employment to become an executive at Corrections Corporation of America. Adds the report, "The company’s payroll also includes a second former BOP Director: J. Michael Quinlan serves as a Senior Vice President of CCA." In 2010, President Obama named a high-dollar Geo Group consultant the head of the US Marshals service. And I know there's at least some cross-pollination between TDCJ and private contractors.
Grits wonders what a more comprehensive review would reveal about this "revolving door" pheomenon between the leadership of private and state-run prison systems? Anecdotally it seems common, particularly among top decisionmakers who might have sway influencing government contracts. But the Coke County example involved lower-level employees migrating back and forth from state to private employment being hired to provide oversight to their former (and potentially future) employer. That situation strikes me as potentially fairly common and makes me wonder precisely how deep that particular rabbit hole goes?
MORE: From Texas Prison Bidness, Sentencing Law & Policy, CNBC, and NPR.
the crippling cost of imprisoning increasing numbers of Americans saddles government budgets with rising debt and exacerbates the current fiscal crises confronting states across the nation.Further:
Leading private prison companies essentially admit that their business model depends on high rates of incarceration. For example, in a 2010 Annual Report filed with the Securities and Exchange Commission, Corrections Corporation of America (CCA), the largest private prison company, stated: “The demand for our facilities and services could be adversely affected by . . . leniency in conviction or parole standards and sentencing practices . . . .”
As incarceration rates skyrocket, the private prison industry expands at exponential rates, holding ever more people in its prisons and jails, and generating massive profits. Private prisons for adults were virtually non-existent until the early 1980s, but the number of prisoners in private prisons increased by approximately 1600% between 1990 and 2009. Today, for-profit companies are responsible for approximately 6% of state prisoners, 16% of federal prisoners, and, according to one report, nearly half of all immigrants detained by the federal government. In 2010, the two largest private prison companies alone received nearly $3 billion dollars in revenue, and their top executives, according to one source, each received annual compensation packages worth well over $3 million.Another section of the report critiques the corporate-friendly American Legislative Exchange Council, declaring that "ALEC has not only done work that helped increase the amount of taxpayer money spent on corrections generally but has also supported policies likely to increase the proportion of corrections spending funneled to private corporations."
The report also documents the impact of expanded federal immigration detention practices which has been a hobby horse of this blog for many years. "The past decade has borne out the prediction that 9/11 would be good business for private prisons. By 2010, the average daily population of immigration detainees stood at 31,020, more than a 50% increase over the 2001 level (and an increase of roughly 450% over the 1994 level)."
In both juvenile and adult settings, the "revolving door" phenomenon is something about which one hears numerous back-room whispers, but seldom fact-based documentation. It happens, but how commonly? I've never seen hard data, but could cite many anecdotes. Most blatantly, federal Bureau of Prisons chief Harvey Lappin this year left federal employment to become an executive at Corrections Corporation of America. Adds the report, "The company’s payroll also includes a second former BOP Director: J. Michael Quinlan serves as a Senior Vice President of CCA." In 2010, President Obama named a high-dollar Geo Group consultant the head of the US Marshals service. And I know there's at least some cross-pollination between TDCJ and private contractors.
Grits wonders what a more comprehensive review would reveal about this "revolving door" pheomenon between the leadership of private and state-run prison systems? Anecdotally it seems common, particularly among top decisionmakers who might have sway influencing government contracts. But the Coke County example involved lower-level employees migrating back and forth from state to private employment being hired to provide oversight to their former (and potentially future) employer. That situation strikes me as potentially fairly common and makes me wonder precisely how deep that particular rabbit hole goes?
MORE: From Texas Prison Bidness, Sentencing Law & Policy, CNBC, and NPR.
Minggu, 23 Oktober 2011
Chronicling compliance, oversight cuts at TDCJ
Eric Dexheimer at the Austin Statesman today has an interesting story on how budget cuts will affect compliance/enforcement positions at Texas state agencies. He included this tidbit about TDCJ:
The Texas Department of Criminal Justice, too, said the loss of compliance-related jobs won't affect its operations.Grits hadn't realized the Lege had reduced the number of OIG staff nor compliance/enforcement officers related to private prisons, which on its face seems problematic when in the same budget the Lege opened the door to wider private prison contracting.
The agency shrunk by 760 positions as the result of budget cuts since 2009. Seventeen of those losses could be considered oversight or compliance positions, agency spokeswoman Michelle Lyons said.
Among them: two prison health services employees who audited vendor contract compliance, three internal auditors and three roving compliance officers from the Private Facility Contract Monitoring/Oversight Division. The division keeps an eye on private prisons to make sure the facilities follow Texas corrections rules.
The state prison agency also lost five investigators and supervisors from the Office of Inspector General, "which, as the law enforcement arm of the prison system, ensures that employees and inmates are compliant in following state and federal laws," Lyons explained.
Senin, 17 Oktober 2011
Can regional health providers replace UTMB prisoner healthcare?
If Mike Ward at the Austin Statesman ever retires or is laid off, there won't be a single professional journalist in the state closely monitoring the Texas Department of Criminal Justice. Most recently he reported on Saturday that:
First, this may be somewhat of a bluff, just like the suggestion that other university medical schools might be willing to do the job. UTMB and TDCJ are in the middle of negotiations, and UTMB thought they held all the cards, offering to bow out of the part of the program that's losing money but aiming to keep what Ward calls "the financial plums of prison healthcare." These are the portions that private providers hoped to cherrypick from the state earlier this year, though none were willing to take on the money-losing prison clinics in addition to the "plum" parts. So TDCJ appears to be calling UTMB's bluff, but it remains to be seen whether they could actually pull off the project by contracting with regional hospitals.
I also found it remarkable that "Prison officials said that in addition to the savings of cheaper rates they hope to negotiate with the regional hospitals, they could save transportation costs to Galveston. On an average day, about 2,000 convicts are being bused to Galveston for treatment." For many years we've been told by officials that prison healthcare in Texas is a "model" that's cheaper than in most other states primarily because of UTMB's "telemedicine" program, which supposedly cuts costs by letting providers in Galveston consult with patients over a videoconferencing system. But now, when UTMB threatens to pull out, there would be "savings" from "cheaper rates" and lower transportation costs from switching to regional providers? That may be true, but it makes one wonder if officials were misrepresenting the situation then, or now?
Third, I doubt regional hospitals are set up to handle inmates security-wise. The University Medical Center in Lubbock ended its contract with Texas Tech to handle prisoner care after an inmate took two nurses hostage and raped them. Most hospitals aren't prepared for the security measures required to replace UTMB services, and I suspect many won't be willing to enact them.
In addition, there's the issue of cost. The state auditor earlier this year found that "UTMB's prison health care division charges more for reimbursement for physician services, inpatient hospital services and outpatient services than it does for Medicare, Medicaid and at least one major private insurer's reimbursements." But will other hospitals be willing to take these patients at cheaper rates? I suspect their fees will be a major sticking point. It's unlikely prison healthcare will be cheaper under any alternative system.
Fifth, how does UTMB have the authority to end the contract when the Legislature basically ordered them to stay on during the legislative session? It strikes me as outright bizarre that one state agency is refusing to contract with another one when the Legislature explicitly told them to. What other agency gets to ignore legislative directives like that, and why does UTMB have so much autonomy that they can tell the state prison system to go take a hike? I don't get it. UTMB complains that they're being used as a bank to float interest-free loans to TDCJ, but in the big picture that's just the state loaning money to the state. When UTMB raised the issue of dropping out of the contract earlier this year, Senate Finance Chairman Steve Ogden dismissed their suggestion as "not helpful." One notices UTMB didn't follow through on their threat to end the contract until AFTER Ogden had secured a billion dollars in recovery money for them following Hurricane Ike and announced his retirement. I wish the Lege or the Governor had insisted on tying that recovery money to UTMB continuing to provide prisoner healthcare. Before they spent the recovery money, they had lots of leverage; now they appear to have little at all.
Sixth, this development re-raises the issue of privatization, and whether private prison health firms will be willing to perform Texas prison health services for the amount the Lege budgeted for UTMB and Texas Tech to do the job. Reading between the lines from news coverage (mostly from Ward) this spring, farming out the more lucrative parts of prison healthcare was really all private firms were interested in, but they only could do the job if prison health budgets stayed at last biennium's levels, not for nine-figures less. At current funding levels, I'm not sure who will be willing to do the job.
Finally, while most of the discussion presently seems to center around hospital care, the frontline work at the prison clinics still must get done, though nobody seems to be publicly suggesting a plan to accomplish that. Presumably TDCJ would resume direct employment of workers in prison clinics, but nobody's said so and I suspect an array of unresolved issues would accompany such a move. At a minimum, TDCJ isn't staffed up to provide supervision over prison health workers, and probably doesn't have the expertise on staff to do so. Further, I don't know if TDCJ employee benefit and retirement packages are comparable to UTMB's and suspect frontline employees may take a hit if that actually happens unless the Legislative Budget Board can somehow find more money. That's the part of the system that's actually bleeding red ink, but it appears from public discussions that the main focus of negotiations and TDCJ planning has been on provision of hospital care.
Maybe the threat of taking away the "plum" parts of prison healthcare will slow down UTMB's rush to get out of its contract with TDCJ, but it seems like they're dead set on leaving the deal one way or another. What a mess: An utterly predictable, and in fact predicted, management failure by the Lege and the governor's appointees on TDCJ's board. Thanks to the Statesman's Mike Ward, at least it's now a public failure instead of a secret, unacknowledged one.
RELATED: 'State funding doesn't cover costs of prison healthcare, officials say.'
In a surprise move, state prison officials revealed Friday that they are exploring a plan to run their convict health care program without any participation from the University of Texas Medical Branch at Galveston for the first time in 18 years.This news raises for Grits many related thoughts and unanswered questions:
Instead, officials said they are devising a network that would rely on regional hospitals across Texas to provide the care.
"We have very well-developed plans on what this new regional care network would look like and are moving forward to whatever transition may be necessary," said Brad Livingston, the prison system's executive director.
"We are working to finalize contracts containing the necessary provisions and prepare for a transition, if necessary, that ends UTMB's role in the delivery of offender health care."
Friday's development came after UTMB officials declared that talks to extend their managed care contract for prisons were at an impasse and proposed to stop providing care at prisons but continue operating the prison hospital in Galveston.
The hospital, and the specialty clinics associated with it, generally are considered the financial plums of prison health care, while the prison-based clinics are much less lucrative.
First, this may be somewhat of a bluff, just like the suggestion that other university medical schools might be willing to do the job. UTMB and TDCJ are in the middle of negotiations, and UTMB thought they held all the cards, offering to bow out of the part of the program that's losing money but aiming to keep what Ward calls "the financial plums of prison healthcare." These are the portions that private providers hoped to cherrypick from the state earlier this year, though none were willing to take on the money-losing prison clinics in addition to the "plum" parts. So TDCJ appears to be calling UTMB's bluff, but it remains to be seen whether they could actually pull off the project by contracting with regional hospitals.
I also found it remarkable that "Prison officials said that in addition to the savings of cheaper rates they hope to negotiate with the regional hospitals, they could save transportation costs to Galveston. On an average day, about 2,000 convicts are being bused to Galveston for treatment." For many years we've been told by officials that prison healthcare in Texas is a "model" that's cheaper than in most other states primarily because of UTMB's "telemedicine" program, which supposedly cuts costs by letting providers in Galveston consult with patients over a videoconferencing system. But now, when UTMB threatens to pull out, there would be "savings" from "cheaper rates" and lower transportation costs from switching to regional providers? That may be true, but it makes one wonder if officials were misrepresenting the situation then, or now?
Third, I doubt regional hospitals are set up to handle inmates security-wise. The University Medical Center in Lubbock ended its contract with Texas Tech to handle prisoner care after an inmate took two nurses hostage and raped them. Most hospitals aren't prepared for the security measures required to replace UTMB services, and I suspect many won't be willing to enact them.
In addition, there's the issue of cost. The state auditor earlier this year found that "UTMB's prison health care division charges more for reimbursement for physician services, inpatient hospital services and outpatient services than it does for Medicare, Medicaid and at least one major private insurer's reimbursements." But will other hospitals be willing to take these patients at cheaper rates? I suspect their fees will be a major sticking point. It's unlikely prison healthcare will be cheaper under any alternative system.
Fifth, how does UTMB have the authority to end the contract when the Legislature basically ordered them to stay on during the legislative session? It strikes me as outright bizarre that one state agency is refusing to contract with another one when the Legislature explicitly told them to. What other agency gets to ignore legislative directives like that, and why does UTMB have so much autonomy that they can tell the state prison system to go take a hike? I don't get it. UTMB complains that they're being used as a bank to float interest-free loans to TDCJ, but in the big picture that's just the state loaning money to the state. When UTMB raised the issue of dropping out of the contract earlier this year, Senate Finance Chairman Steve Ogden dismissed their suggestion as "not helpful." One notices UTMB didn't follow through on their threat to end the contract until AFTER Ogden had secured a billion dollars in recovery money for them following Hurricane Ike and announced his retirement. I wish the Lege or the Governor had insisted on tying that recovery money to UTMB continuing to provide prisoner healthcare. Before they spent the recovery money, they had lots of leverage; now they appear to have little at all.
Sixth, this development re-raises the issue of privatization, and whether private prison health firms will be willing to perform Texas prison health services for the amount the Lege budgeted for UTMB and Texas Tech to do the job. Reading between the lines from news coverage (mostly from Ward) this spring, farming out the more lucrative parts of prison healthcare was really all private firms were interested in, but they only could do the job if prison health budgets stayed at last biennium's levels, not for nine-figures less. At current funding levels, I'm not sure who will be willing to do the job.
Finally, while most of the discussion presently seems to center around hospital care, the frontline work at the prison clinics still must get done, though nobody seems to be publicly suggesting a plan to accomplish that. Presumably TDCJ would resume direct employment of workers in prison clinics, but nobody's said so and I suspect an array of unresolved issues would accompany such a move. At a minimum, TDCJ isn't staffed up to provide supervision over prison health workers, and probably doesn't have the expertise on staff to do so. Further, I don't know if TDCJ employee benefit and retirement packages are comparable to UTMB's and suspect frontline employees may take a hit if that actually happens unless the Legislative Budget Board can somehow find more money. That's the part of the system that's actually bleeding red ink, but it appears from public discussions that the main focus of negotiations and TDCJ planning has been on provision of hospital care.
Maybe the threat of taking away the "plum" parts of prison healthcare will slow down UTMB's rush to get out of its contract with TDCJ, but it seems like they're dead set on leaving the deal one way or another. What a mess: An utterly predictable, and in fact predicted, management failure by the Lege and the governor's appointees on TDCJ's board. Thanks to the Statesman's Mike Ward, at least it's now a public failure instead of a secret, unacknowledged one.
RELATED: 'State funding doesn't cover costs of prison healthcare, officials say.'
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