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Prostitutes and Pitbulls: A State-Run Hospital Scandal

Anthony Randazzo
September 9, 2009, 5:19pm

Privatization of state-run facilities—such as hospitals, prisons, or mental health facilities—often get critiqued as corner cutting, inhumane, profit seeking, or unsafe. Of course these criticisms often come from people who have never visited a private facility. Aside from profit seeking critique, these complains are almost always inaccurate. And its because of the profit seeking. Profit creates incentives for private firms to create safe, stable facilities that reduce recidivism, meet government standards, and fulfill contractual terms. Otherwise they’d go out of business.

Of course there are occasional examples of negligence. But the same issues occur at state run facilities, and more frequently. The recent scandal at Florida’s state-run TB hospital in Lantana good example:

A crack-binging prostitute, pampered pitbulls, an illegal RV hooked up to taxpayer-paid utilities - an inspector general's report released on Thursday found all of them at the state-run A.G. Holley tuberculosis hospital in Lantana during the tenure of recently ousted interim CEO, Jeffrey Voiles. […]

On Thursday, Florida Surgeon General Dr. Ana Viamonte Ros announced the firing of three hospital employees, including the hosptial's PR person, and the demotion of two, for a range of misdeeds under Voiles' tenure, including interfering with the inspector general's investigation and failing to act on employee complaints about Voiles.

"The actions of these few individuals diminish the hard work the staff of AG Holley does every day," Viamonte Ros said.

Does this happen at every state-run hospital? No. But something to this extent would likely never have happened at a private facility. If a private firm was operating Holley for the state there would be state monitors to ensure quality service from the vendor. The private company would have the incentive of keeping its current contracts and getting new ones to drive quality provision of services. Just imagine if a private company had been caught with prostitutes on campus! But the only the state can do is fire the current management in bring in more state employees.

Private firms have a much higher incentive to manage their liabilities than the state does, because we can’t fire the state from running Holley hospital. The same people who hired Jeffrey Voiles will now hire someone else, what are the odds they make a mistake again?

Read the whole article from the Sun-Sentinel about A.G. Holley hospital here.


Anthony Randazzo is Director of Economic Research


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