Can regional health providers replace UTMB prisoner healthcare?

If Mike Ward at the Austin Statesman ever retires or is laid off, there won't be a single professional journalist in the state closely monitoring the Texas Department of Criminal Justice. Most recently he reported on Saturday that:

In a surprise move, state prison officials revealed Friday that they are exploring a plan to run their convict health care program without any participation from the University of Texas Medical Branch at Galveston for the first time in 18 years.

Instead, officials said they are devising a network that would rely on regional hospitals across Texas to provide the care.

"We have very well-developed plans on what this new regional care network would look like and are moving forward to whatever transition may be necessary," said Brad Livingston, the prison system's executive director.

"We are working to finalize contracts containing the necessary provisions and prepare for a transition, if necessary, that ends UTMB's role in the delivery of offender health care."

Friday's development came after UTMB officials declared that talks to extend their managed care contract for prisons were at an impasse and proposed to stop providing care at prisons but continue operating the prison hospital in Galveston.

The hospital, and the specialty clinics associated with it, generally are considered the financial plums of prison health care, while the prison-based clinics are much less lucrative.

This news raises for Grits many related thoughts and unanswered questions:

First, this may be somewhat of a bluff, just like the suggestion that other university medical schools might be willing to do the job. UTMB and TDCJ are in the middle of negotiations, and UTMB thought they held all the cards, offering to bow out of the part of the program that's losing money but aiming to keep what Ward calls "the financial plums of prison healthcare." These are the portions that private providers hoped to cherrypick from the state earlier this year, though none were willing to take on the money-losing prison clinics in addition to the "plum" parts. So TDCJ appears to be calling UTMB's bluff, but it remains to be seen whether they could actually pull off the project by contracting with regional hospitals.

I also found it remarkable that "Prison officials said that in addition to the savings of cheaper rates they hope to negotiate with the regional hospitals, they could save transportation costs to Galveston. On an average day, about 2,000 convicts are being bused to Galveston for treatment." For many years we've been told by officials that prison healthcare in Texas is a "model" that's cheaper than in most other states primarily because of UTMB's "telemedicine" program, which supposedly cuts costs by letting providers in Galveston consult with patients over a videoconferencing system. But now, when UTMB threatens to pull out, there would be "savings" from "cheaper rates" and lower transportation costs from switching to regional providers? That may be true, but it makes one wonder if officials were misrepresenting the situation then, or now?

Third, I doubt regional hospitals are set up to handle inmates security-wise. The University Medical Center in Lubbock ended its contract with Texas Tech to handle prisoner care after an inmate took two nurses hostage and raped them. Most hospitals aren't prepared for the security measures required to replace UTMB services, and I suspect many won't be willing to enact them.

In addition, there's the issue of cost. The state auditor earlier this year found that "UTMB's prison health care division charges more for reimbursement for physician services, inpatient hospital services and outpatient services than it does for Medicare, Medicaid and at least one major private insurer's reimbursements." But will other hospitals be willing to take these patients at cheaper rates? I suspect their fees will be a major sticking point. It's unlikely prison healthcare will be cheaper under any alternative system.

Fifth, how does UTMB have the authority to end the contract when the Legislature basically ordered them to stay on during the legislative session? It strikes me as outright bizarre that one state agency is refusing to contract with another one when the Legislature explicitly told them to. What other agency gets to ignore legislative directives like that, and why does UTMB have so much autonomy that they can tell the state prison system to go take a hike? I don't get it. UTMB complains that they're being used as a bank to float interest-free loans to TDCJ, but in the big picture that's just the state loaning money to the state. When UTMB raised the issue of dropping out of the contract earlier this year, Senate Finance Chairman Steve Ogden dismissed their suggestion as "not helpful." One notices UTMB didn't follow through on their threat to end the contract until AFTER Ogden had secured a billion dollars in recovery money for them following Hurricane Ike and announced his retirement. I wish the Lege or the Governor had insisted on tying that recovery money to UTMB continuing to provide prisoner healthcare. Before they spent the recovery money, they had lots of leverage; now they appear to have little at all.

Sixth, this development re-raises the issue of privatization, and whether private prison health firms will be willing to perform Texas prison health services for the amount the Lege budgeted for UTMB and Texas Tech to do the job. Reading between the lines from news coverage (mostly from Ward) this spring, farming out the more lucrative parts of prison healthcare was really all private firms were interested in, but they only could do the job if prison health budgets stayed at last biennium's levels, not for nine-figures less. At current funding levels, I'm not sure who will be willing to do the job.

Finally, while most of the discussion presently seems to center around hospital care, the frontline work at the prison clinics still must get done, though nobody seems to be publicly suggesting a plan to accomplish that. Presumably TDCJ would resume direct employment of workers in prison clinics, but nobody's said so and I suspect an array of unresolved issues would accompany such a move. At a minimum, TDCJ isn't staffed up to provide supervision over prison health workers, and probably doesn't have the expertise on staff to do so. Further, I don't know if TDCJ employee benefit and retirement packages are comparable to UTMB's and suspect frontline employees may take a hit if that actually happens unless the Legislative Budget Board can somehow find more money. That's the part of the system that's actually bleeding red ink, but it appears from public discussions that the main focus of negotiations and TDCJ planning has been on provision of hospital care.

Maybe the threat of taking away the "plum" parts of prison healthcare will slow down UTMB's rush to get out of its contract with TDCJ, but it seems like they're dead set on leaving the deal one way or another. What a mess: An utterly predictable, and in fact predicted, management failure by the Lege and the governor's appointees on TDCJ's board. Thanks to the Statesman's Mike Ward, at least it's now a public failure instead of a secret, unacknowledged one.

RELATED: 'State funding doesn't cover costs of prison healthcare, officials say.'