Big Business
Private HMOs tap a new niche: prisons
By Rachel Maddow

Over this period, prison spending has also skyrocketed, becoming the fastest-growing major component of state budgets. But instead of better care, the bulk of the money has been spent on building new prisons and on guards' salaries. Even though a new state or federal prison opened every week between 1985 and 1995, most prison systems are still overcrowded and conditions remain, in Amnesty International's words, "dangerous, inhumane, and appalling." A decade ago, following a string of prisoner complaints and lawsuits, a majority of state prison health systems were operating under court orders, meaning they had failed to provide even a baseline standard of care, one legally defined as not "deliberately indifferent" to prisoners' "serious medical needs."

Desperate to reduce their costs and liability, prison administrators did like the rest of the country and turned to private health maintenance organizations (HMOs) for help. The privatization of prison health care, including HIV care, began with single facilities and has spread to entire state prison systems. At least 43 states now contract some or all of their medical services, and roughly a quarter of the money spent on correctional health care goes to these private companies, which are eager to provide services and drugs to what they view as a fast-growing, untapped niche in the market: prisoners. As they tell it, factors such as aging and high rates of HIV among prisoners "mean more opportunities" for HMOs. As the industry sees it, "The market is just taking off."

To harried prison officials, the arrival of HMOs must seem like a dream come true. Read their spiels: "We take full responsibility for all operational, financial, and legal responsibilities, so you can concentrate on the important duties of running a first-rate facility," coos Prison Health Services Inc. of Brentwood, Tennessee. Not to be outdone, Correctional Medical Services of St. Louis promises: "Contracting means you relinquish the hassles of managing your health care unit... when it comes time to pay for inmate health care services, you'll receive only one bill."

On paper, they sound great, but who really benefits? Are managed care companies providing better care to prisoners? Do they save money for prisons-and by extension-U.S. taxpayers? How well is anyone monitoring the quality of services prison HMOs provide? What if they prove, as the government has, to show "deliberate indifference" to the medical needs of inmates? What then? Who do outside advocates call when things go wrong with someone on the inside?

For now, the list of questions outweighs the answers. But one thing is clear: Things are changing fast in the prison world, and privatization may well be the future of prison HIV care.

Robert Greifinger, M.D., former chief medical officer of New York State's prisons, says that the HMOs' siren call has produced an almost "knee-jerk" reaction among prison officials who love the idea. But he argues it's a "myth" to believe that contracting out will somehow give prison officials more control over problematic issues like costs, organization, operations, quality, and staffing. "What makes them think that if they can't control it themselves that they can control the vendor?" asks Greifinger, adding that "very few have effective contract monitoring."

Not true, argues Lester Lewis, M.D., a former medical director of the Pennsylvania Department of Corrections, who now works for Prison Health Services, another HMO. He argues that "The private sector is as highly scrutinized as the public sector. Market forces...require us to do our best so that we can retain contracts and win new ones."

But critics aren't buying Lewis' arguments. Thomas Conklin, M.D., medical director for the Hampden County Correctional Center, a facility with a model HIV program (see "Fire In the Belly") says that a well-recognized problem of managed care in the free world can be magnified by the "veil of secrecy" that prevails in prisons and jails. "We all have our complaints with managed health care. You think the HMOs cut in the public [sector]? Go into the jails and see what they cut. They can be brutal."

Underneath the fine print, then, the bottom line for prison HMOs remains profit. The burgeoning prison market is business -- potentially good business -- but like most companies, they need to minimize costs to maximize profits. In a nutshell, what's very good for business may be very bad for prisoners, especially those with HIV who need specialized care and expensive medication.

The principle behind managed care is to save money by working cost considerations into all aspects of health care delivery. The aim is to limit access to expensive kinds of care to the patients who really need it. When it comes to HIV care, advocates worry that managed care will weed out patients who can't raise enough hell to get quality care.

In a discussion paper on HIV and managed care, San Francisco's Project Inform, an advocacy group, advises, "If you have the energy to fight for what you need and supportive friends, family, social workers, and physicians, you can squeeze quality out of an HMO but not easily. If you can't or won't fight, you may have to settle for what you get."

When it comes to prisoners with HIV, the deck is especially stacked against them. A 1995 National Institute of Justice report says that the prison setting may offer companies particularly profitable advantages because of "limited patient choice." In the outside world, competition for enrollees encourages HMOs to enrich their benefit packages, but the NIJ report notes, "Prison administrators have at least the potential to regulate prisoners' utilization of services very tightly." One way they do this is by controlling medical decisions made by prison physicians.

When profit is the bottom line, the strategy is simple: Every dollar not spent on health care is a dollar taken in profit. "It just makes sense," says Conklin. "There's not enough money in the [prison] system to give good health care and to make the kind of profit they [HMOs] want to make. So what comes first? What comes first is the profit. And what comes second is the health care."

Today there is no national data source for prison health care. No one regularly collates and compares statistics on quality of care or other health indicators. (The NIJ does track deaths in custody, and many prisons keep tabs on rates of HIV and tuberculosis in their facilities.) It's therefore not possible to generalize about whether private companies provide an overall better or worse standard of care than state-run programs. Ted Hammett, Ph.D., a researcher for Abt Associates and a leading authority on HIV in prisons, says, "Anecdotally, there's a range of quality and quantity in services by contracted providers just as there is for public providers." He singles out the Massachusetts state prisons -- contracted to Correctional Medical Services -- as one example of good practice by a private provider. For its part, Ken Fields of CMS says that its Massachusetts operation has "some of our best people and a particular focus on HIV care."

But praise for some state programs hasn't shaken the persistent shadow that looms over the for-profit prison health industry. Just in the past three years, several companies have been stung by allegations of suspicious deaths in custody, complaints from former employees who claim that companies doctored medical records, and cover-ups and revelations that prison HMOs employ physicians who have had their licenses revoked for misconduct (in one case, sexual abuse; in another, for patient manslaughter).

At the Fulton County jail in Atlanta, lawyers investigating prisoners' complaints about HIV care found that even though prisoners could get good outpatient care at the local hospital, they faced four-to-six-week appointment delays. Since the jail didn't stock most HIV meds, that meant long interruptions in treatment. When lawyers for the Southern Center for Human Rights brought a class-action suit on behalf of HIV-positive prisoners against the Atlanta jail, the private company responsible for overseeing its health care, Correctional HealthCare Solutions, quickly settled on the first round. It agreed to allow every prisoner who tested HIV positive to see a specialist within two weeks of being diagnosed, and to provide HIV treatment regimens consistent with national or community standards.

Although the Fulton County case shows that the courts can still provide some muscle for prisoners with complaints, managed care companies also bill themselves as experts in heading off legal challenges. One group, PHP Correctional Managed Care of Reston, Virginia, told potential customers that it would handle all claims and lawsuits and provide lawyers for medical litigation. Another, a dental managed care company called Dentrust Dental of Richboro, Pennsylvania, noted in a 1996 pitch that "Inmates are well known for continuously filing law suites [sic] with or without merit. Nevertheless, in the five years Dentrust has been working within correctional facilities, it has never been sued."

In Missouri, five years after the state awarded Correctional Medical Services the prison health care contract, the number of health-related lawsuits pending against Missouri dropped from 308 to 77. A lawyer for the company told the St. Louis Post-Dispatch that this reduction in lawsuits implied that "the inmates have a lot less to complain about."

To prison officials, promises of fewer lawsuits are especially attractive. The important question is, are there fewer prison lawsuits because better care is being provided, as private companies claim, or are these outside companies better equipped to squelch complaints before they reach the courtroom? No one can say for sure. "Most of the positive change that has occurred in correctional health care has come from litigation," explains Greifinger. He's not alone in wondering what means are left for prisoners to press for improvements now that the courts have become less accessible. Meanwhile, the private companies are getting help from states and from the federal government, which severely curtailed prisoners' access to the courts through the 1996 Prison Litigation Reform Act.

The nonprofit National Commission on Correctional Health Care is the closest thing there is to a prison health monitoring group. But NCCHC President Edward Harrison says he doesn't consider his a watchdog group. "What we watch over is compliance with our standards in facilities that ask us to accredit them," he says. Many prison HMOs are required by their contracts to achieve and maintain NCCHC accreditation, but the group hasn't updated its position statement on HIV since 1994. It doesn't even note that there are published federal guidelines for HIV treatment. Since these facilities, or the companies that operate them, pay NCCHC for accreditation, Harrison's group is unlikely to raise its standards high enough to force real improvements in prison care. Harrison could only say that providers "that don't do a good job may be sued, or there will be some other event that takes place that will require them to improve." Another organization, the Joint Commission on the Accreditation of Health Care Organizations, also accredits some correctional health care systems.

In 1995, Native American political prisoner Little Rock Reed, now released from prison, called on advocates to report prisons when they fell out of compliance with accreditation standards, which may open a new avenue for advocates. If private companies are required to maintain accreditation to keep their contracts, any complaint that could interfere with accreditation might get a company's attention. "We're not in a position to take on individual cases, but if a complaint concerns standards in a facility being evaluated [by NCCHC], then we're very interested in hearing that," says NCCHC's Harrison.

Another approach is to use the contracting process itself to secure accountability for better care. When the activist group ACT UP-Philadelphia wanted to respond to HIV-related complaints from New Jersey prisoners, including those of political prisoner Greg Smith (see "The Good Fight"), the group found that New Jersey's contract with Correctional Medical Services was up for renewal. ACT UP demanded that New Jersey "open the contract to public comment before it is released for bidding" and demanded the state include a contract provision for "quality assurance by an independent oversight committee whose findings are made public."

But getting access to the contracts proved tough. For starters, it meant delving into the legal world. At the start of the New Jersey campaign, ACT UP member Susan Whitaker complained, "Our challenge is that none of us know how to write legalese RFPs [Request for Proposals], so we must look for a lawyer to help us learn it." RFPs are documents that explain what the state wants private companies to bid for.

For AIDS activists, this foray into legal minutiae may seem far removed from direct protest. But with the battle shifting away from the courts, so must the tactics, they say. Today groups like ACT UP, with help from journalists, are getting state corrections departments and HMOs around the country to open prison health care to public scrutiny. And that hasn't made the HMOs happy. Correctional Medical Services, for example, has become extremely aggressive toward journalists who have criticized their company. After the St. Louis Post-Dispatch published a special report on CMS, the company bombarded the paper with calls and letters to the editor. Although CMS hasn't filed a lawsuit against the paper, it won't rule out the possibility. "We did and will continue to evaluate all our legal options, says CMS spokesman Fields, who claims the series was "full of misleading statements and factual inaccuracies."

Because of this type of aggressive response, many notable authorities in the prison health world are reluctant to go on record saying anything critical about individual HMOs or privatization in general. National health agencies such as NIJ and the Centers for Disease Control and Prevention, have also been very quiet about privatization.

The challenge for prisoners and advocates, say seasoned veterans, is not be intimidated by the HMOs' bombast. Although the prison world seems unassailable and intimidating, it is still susceptible to outside pressure, as are private companies. Julia Clements, for example, has waged a one-woman crusade against a prison HMO in West Virginia in an effort to get medical care for her brother-in-law. "I was in the same boat with most people, not knowing anything about penitentiaries," she says. "But now I've got a relative inside and I'm ashamed that this is the way our country treats people in 1999." Although Clements has maxed out her credit cards fighting her battle, and her brother has faced retailiation inside, she says she's doing the right thing. "My father told me that when good people sit back doing nothing, evil people flourish. I feel like I'm fighting the beast."

Rachel Maddow is a longtime activist completing her doctorate on HIV and prison issues at Oxford University.

Photograph by Andrew Lichtenstein/Sygma