When selecting a healthcare delivery model, facilities should weigh factors such as facility size, specific population, staffing needs, and budget. Consider different models such as in-house care, contracted services, or hybrid approaches. The Correctional Healthcare RFP Toolkit presents key considerations, including medical care standards, legal obligations, and cost-effectiveness.

Should you outsource healthcare services?

There is wide variation in the ways that correctional facilities arrange to provide health care. These generally fall into four broad categories (Pew Charitable Trusts, 2018):

  1. Direct model (insourcing): Government-employed corrections department clinicians provide all or most on-site care. Most Federal Bureau of Prisons facilities operate under this model.
  2. Contracted model: Clinicians employed by one or more private companies deliver all or most on-site care. This is the most common model among jails and is the model in about 40% of prison systems.
  3. State university model: The state’s public medical school or affiliated organization is responsible for all or most on-site care.
  4. Hybrid model: On-site care is delivered by some combination of the other models.

Reasons for Outsourcing

The last three models involve some level of outsourcing. There are four common reasons that facilities outsource their healthcare services: to control costs, increase patient safety, avoid salary caps, and shift litigation risk and cost:

Outsourcing correctional facility healthcare services is complex. If your facility is currently operating inefficiently—such as by ordering excessive tests or purchasing medications at high rates—outsourcing to a vendor with cost-management systems may reduce expenses. However, if your facility has already optimized its operations with cost-saving tools, outsourcing could increase your overall costs. This is because the base costs may remain the same, but you will need to cover the vendor’s profit margin, which can range from 6% to 9% for prison contracts and 12% to 15% for jail contracts. The profitability varies based on the vendor and the market, making it difficult to predict the precise impact on your specific situation.

Will the quality of care improve if you outsource? The answer parallels the answer above: It depends on your facility’s current circumstances. If patient care has been negligent up to now, as often evidenced by an excessive number of deaths, suicide attempts, and/or litigation, then outsourcing to an experienced and competent vendor that institutes patient safety practices (e.g., robust error reporting systems, error and mortality reviews, root cause analyses, oversight by a senior physician), then the quality of care will likely improve. On the other hand, outsourcing is less likely to result in sizeable improvements if you are already attending to patient safety.

One clear reason to outsource is that the government or bargaining unit-negotiated salary structure under which you operate limits your ability to attract and retain competent healthcare professionals, who are in extremely high demand. Government employment models are generally very rigid, and they may have limited recruiting resources or sophistication to attract healthcare professionals. A private company has much more flexibility regarding compensation plans, enhancements to compensation, flexible benefits, retirement plans, and the like. In such cases, outsourcing provides a mechanism for offering higher salaries than you could otherwise.

Note, though, that if you will be replacing union jobs with non-unionized vendor jobs, there are potential legal and political implications that you should explore fully with your legal counsel.

Many correctional administrators believe that outsourcing protects them from litigation and/or shifts the cost of litigation to the vendor. This is not correct. Outsourcing by itself does not relieve correctional administrators and governmental entities from their obligations under the U.S. Constitution and statutes that protect incarcerated people. Although outsourcing may spread the litigation risk, it does not preclude lawsuits related to providing constitutional and/or statutorily required care (such as violations of the Americans with Disabilities Act of 1990 for not providing medication for opioid use disorder to those who need it) or from other legal exposure (such as malpractice or deliberate indifference) related to the operation of correctional facilities. Providing adequate and required care, however, does protect against many of those risks, and this Toolkit is intended to help the Users ensure that the care provided meets these requirements.

Alternatives to outsourcing the entire contract to a single for-profit company via the RFP process

In U.S. correctional facilities, outsourcing to a single for-profit company is a popular model, employed in 20 states. It is estimated that 60% of jails outsource to a for-profit company.

Other models for outsourcing include the following:

  1. State and local departments of health. Healthcare services at the King County jail in Seattle, Washington, are provided by the Seattle-King County public health department.
  2. Public or private university. Healthcare services in the Texas prison system are provided by the University of Texas Medical Branch and Texas Tech University Health Sciences Center.
  3. Public or private hospital. Health services at the Miami-Dade County, Florida, jail are provided by Jackson Memorial Hospital.
  4. Federally Qualified Health Center
  5. Mobile van. Some correctional facilities provide dental services via a traveling dentist.
  6. Other (noncorrectional) state or county agencies. In many counties, mental health services are provided by the county’s mental health system.
  7. Another correctional agency
  8. Staffing agency. In this model, the facility contracts for one or more employees or professional categories (e.g., nurses), but other employees (e.g., physician, health services administrator) might be facility employees.

Outsourcing to another correctional facility

Outsourcing to another correctional facility is a model used mostly by small jails. There are two variations on the model: complete and partial.

The complete model means closing your jail and contracting with a nearby (larger) city, county, or regional jail to accept all admissions that would have come to you. This may seem drastic, but multiple trends over the past decades support this step. Many jail administrators report an increase in resident clinical complexity and prevalence of serious mental illness and substance use disorder, including polysubstance use disorder. The medical community is also recognizing the importance of diseases and conditions that are overrepresented in correctional populations and were previously under-addressed, such as opioid use disorder and traumatic brain injury. In addition, the types of breaches for which correctional facilities are being sued have also expanded.

Emerging evidence is showing that the effect of these trends is that small jails have difficulty safely managing their residents. According to data from the Bureau of Justice Statistics (Carson, 2021), individuals in small jails have approximately 60% higher chances of dying during their incarceration than individuals in large jails. Completely outsourcing jail health services to a sister agency may be safer and reduce liability.

In the partial model, you continue to operate a local jail. Your custody staff carefully screen newly admitted individuals for active or potential health problems to identify those who are to be immediately transferred to a larger nearby or regional jail (or a hospital). The jail sets a very low threshold for such transfer based on positive screening results.

If outsourcing to another public entity (e.g., health department, hospital, university, correctional facility), local regulations may allow you to do so without competitive bidding. Nonetheless, this RFP Template may still provide a useful framework for an intergovernmental agreement.

Finally, in some jurisdictions you may be able to wholly avoid the competitive RFP process through a process known as “piggybacking.” In piggybacking, your (public) facility uses the existing contract between another public entity and their vendor as the basis for a fresh contract directly between you and the same vendor on the same or similar terms. The rules regarding piggybacking vary by jurisdiction, so check with your procurement advisor on whether this is a good route for your facility.

Outsourcing with another correctional facility

To benefit from economies of scale, it may be beneficial to partner with nearby facilities in the RFP process. The economies might manifest in one of two ways. First, an RFP from a larger conglomerate of facilities may be able to negotiate better pricing than any of the component facilities alone. Second, the costs of the RFP process itself can be shared. Another advantage of issuing an RFP for a larger total operation is that it may increase the number of vendors interested in bidding on the contract. While this is not as true for all vendors, especially smaller regional or local ones, some of the larger national vendors are only interested in bidding on larger contracts.