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Florida Legislature Chooses Unions Over Patients

Anthony Randazzo
May 8, 2009, 10:59am

The Florida legislature last week shut down an attempt to bring privatization to Northeast Florida State Hospital, a psychiatric care facility. This is a blow not only for taxpayers, who could have saved money through a managed competition, but more significantly for the patients at NEFSH and their families. Over the past 10 years, private firms in Florida have proven that they can lower cost, yes, but provide equal, and often times better, care for persons served. In contrast, the forces fighting privatization care more about state jobs, then about those individuals.

In an April 23 letter to the editor of the Florida Times-Union, my Reason colleague Len Gilroy wrote: "State psychiatric hospitals shouldn't be a government jobs program. They exist to treat and improve the lives of the most vulnerable people in society."

In contrast, privatization opponents have been making arguments along the lines of Pattie Hunt, who also wrote to the Florida Times-Union to say, "Have any studies been done that prove a private company will save the state money, or is this just a way for this company to profit from tax dollars?" 

Look no further than South Florida State Hospital (SFSH)—the first state psychiatric hospital privatized in Florida in the late 1990s. The aging Pembroke Pines facility had never been accredited in its 50-year history, despite the fact that 90% of similar hospitals around the country are. SFSH was facing a major class action lawsuit regarding facility patient abuse and abysmal conditions when the state decided to try privatization. Within 10 months of receiving the contract, the private operator was able to get the existing facility accredited and the lawsuit dismissed, while at the same time financing and building a new, modern facility to replace it. No state capital dollars were involved in this new building--which also happened to reduce the campus size from 200 plus acres the 40 acres while providing the same number of beds and leaving the rest of the property to be developed into community housing. Top it all off the state will own the new facility when the debt is retired.

Today the hospital has reduced average patient stays from eight years to less than one years, virtually eliminated the use of seclusion and restraint for managing patient behavior, has developed cost cutting methods that double as quality checks (such as tracking the use of medication), and has recently rolled out the first electronic health records system in a Florida psychiatric hospital—at its own expense. The system increases the accuracy of treatment at the hospital, has created a benchmark for every other hospital in the state to aspire to, and under the terms of the privatization contract, is immediately property of the state as a part of the SFSH facilities.

One only has to go visit South Florida State Hospital (as I have) to see what incredible work they are doing there, to talk with the doctors and nurses who have the patient as their number one concern (not legacy state union jobs), to see the individuals who are getting better. 

How is this miracle possible? That increased quality of care can be coupled with decreased costs? Simply because throwing money at problems does not always make them better. When incentives for care and profit are aligned, the private sector is capable of doing both. The Florida state legislature should look carefully at its decision to see if it really has the hospital resident's best interests at heart, or if it has bowed to political pressure driven by unfounded arguments designed to protect legacy employees.


Anthony Randazzo is Director of Economic Research


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