Reducing Correctional Health Care Spending

Source: Laura Tobler and Kristine Goodwin, LegisBrief, Vol. 21 no. 12, March 2013
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State spending on corrections quadrupled during the last two decades, making it second only to Medicaid in budget growth, according to a Pew report. Aging inmates and the associated expenses for their health care services are among the factors driving costs. … This LegisBrief is based on a forthcoming report from the State Health Care Spending Project an initiative of Pew and the MacArthur Foundation that will outline state actions to contain correctional health care spending in more detail.

State Action
To stem the tide of correctional health care spending, states are adopting various policy reforms to both reduce costs and ensure quality.

Privatization.
A 2004 survey of state corrections departments found that 32 states had shifted all or part of their prison health care services to private firms. Rather than managing contracts with multiple health care providers, states are saving money by contracting with a private company that provides medical, dental and/or mental health services at a capped rate. To ensure high-quality health care, some states offer incentives and/or penalties if the provider fails to meet performance measures. After contracting with Health Net, California’s medical contracting costs dropped from $845 million in 2008-2009 to $380 million in 2011-2012. …