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Lawmakers Should Encourage Prison Health Competition, Not Ban It

Attempt to ban privatization of prison nurses is misguided

Leonard Gilroy and Harris Kenny
January 19, 2012

With Pennsylvania facing at least a $500 million budget deficit next year, the last thing fiscally responsible policymakers should be doing is protecting sacred cows in government. Unfortunately, those trying to advance legislation to protect the jobs of Commonwealth prison nurses are attempting just that.

The proposed House Bill 1985, referred to the House Appropriations Committee in November, would prevent state funds appropriated to the Department of Corrections from being used to privatize prison nursing services. For context, for several years the agency has contracted for a wide range of prison healthcare—including physicians, mid-level providers, and even nurses in some facilities (but not all)—and is currently evaluating bids from private correctional healthcare providers for a continuation of this approach.

What has public employee unions rattled is that the agency is asking vendors to provide two bids for comparative purposes—one that would maintain the current scope of outsourced services, and another that would expand the scope to include additional nursing positions. In essence, the corrections department is testing the market to see whether they should stay on their current path or if they can deliver more value to taxpayers by including more nurses.

HB 1985 proponents claim that there's no room for private competition within the walls of the correctional system. Yet, Pennsylvania's state prisons already rely extensively on contracted physicians and services, so extending the concept to additional nurses hardly seems like a stretch. Well over a dozen states have privatized their correctional healthcare delivery, and, like Pennsylvania, other states including Florida, North Carolina and Arizona are currently soliciting private bids of their own in an attempt to rein in their prison health spending.

The bill's proponents also claim privatization would risk safety and security on the presumption that private nurses haven't faced the challenges of working in a prison environment. This is wrong on several fronts. First, some prison nurses are already privatized in Pennsylvania, and the agency is simply testing the market to see if it could lower costs further by expanding that approach. Additionally, private providers are typically required by their agency clients to achieve or maintain third-party accreditation on their operations from organizations like the American Correctional Association and National Commission on Correctional Health Care, which provide widely used benchmarks on safety, quality and performance.

Next, private healthcare firms routinely hire former public sector staff in these sorts of contracts, generally with more competitive pay and less lavish benefits (e.g., 401-k plans versus unsustainable defined benefit pensions, etc.). Many companies even work with unionized workforces in various states, so a "win" for the private sector need not imply a "loss" for unions. Private firms also tend to be more nimble than states in reducing staff turnover through innovative recruiting, signing and retention bonuses, more flexible scheduling and other strategies difficult to implement in public bureaucracies.

The reality is that, for decades, private for-profit and nonprofit firms have played an increasingly important role in providing many correctional support functions in many states, including health care, mental health services, substance-abuse counseling, educational and vocational programming, transportation, food services and facility maintenance.

You would not see public agencies continue this expansion if their private sector partners were not delivering on costs and quality. For example, in recent years officials at the Indiana Department of Correction have reported saving tens of millions in correctional healthcare and 30% in food service costs since privatizing these services. Some states have even partnered with private firms to finance and deliver new mental health and other specialized correctional facilities faster, better and cheaper than the states could do themselves.

The Pennsylvania Department of Corrections is pursuing a sensible exploration of different privatization options and should be given the opportunity to complete its work without political interference. After all, the overarching goal is to seek ways to control corrections spending, get better value for taxpayer money and ensure the delivery of quality healthcare to the inmate population.

With many seemingly intractable and politically protected silos in state government already—think the Pennsylvania Turnpike and the state's wine and spirits monopoly, anachronisms that still exist despite a competitive marketplace in their respective arenas—policymakers and taxpayers should be asking a simple question: does the Commonwealth really need more sacred cows?

Leonard Gilroy is the director of government reform at Reason Foundation (reason.org), a Los Angeles-based think tank. Harris Kenny is a policy analyst at Reason Foundation.


Leonard Gilroy is Director of Government Reform

Harris Kenny is Policy Analyst


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