Providing quality healthcare and lowering costs are challenges that drive many corrections agencies towards private companies.  But once the contract is signed and the deal is done, departments can't turn a blind eye to what's going on in their facilities; they need to manage those contracts with private service providers to ensure that they are getting what they bargained for.

Vermont learned this lesson the hard way when seven inmate deaths in a year's time prompted the DOC and the State Auditor's Office to take a closer look at healthcare, among other things, at the state's correctional facilities.  Both the Auditor's Report and the report ordered by the Vermont Agency of Human Services found that the DOC needed to step up its contract oversight.

Chief among those contracts that required better monitoring was the department's arrangement with Correctional Medical Services (CMS), the state's inmate healthcare provider.  According to the Auditor's Report, the state suffered financially from ineffective monitoring of the CMS contract and had no real way to evaluate the quality of the services the company was providing to inmates.

"We didn't belly up to the bar to monitor them," said Andrew Pallito, Management Executive for the DOC.  "[But] I think we have made some improvements."

Since the reports were released last year, the Vermont DOC has committed to improving the way it does business with private contractors.  The agency believes it took a step in the right direction in early 2005 when it entered into a contractual agreement with a new healthcare provider, Prison Health Services (PHS). 

"We learned a lot from the Auditor's Report and our own investigation into the contracts," said John Perry, Director of Planning for the DOC.  "One of the results was that we rebid [the healthcare contract] and now have a new provider."

Perry said that, with PHS, the agency is getting a higher quality of healthcare at a better price.  The new contract is also far more restrictive towards the provider, with controls built into it to help the DOC keep a better handle on the medical services being provided to it inmates, he said.

According to Michael LaFaive, Director of Fiscal Policy for the Mackinac Center for Public Policy in Michigan, it is essential for agencies that are working with private companies to design contracts that detail exactly what is expected from those providers.

"I must caution that privatization should be done right or not at all," said LaFaive.  "It requires an open bidding process and careful review of the duties to be performed by both parties and, in instances where human health is involved, careful monitoring of the contract to ensure that each party is living up to its responsibilities, not only to each other, but to the patients in their care."

LaFaive said that there should be a system of checks and balances set up so that the public corrections agency is able to keep close watch over the private entity that is providing its healthcare services.  He recommended that one person in the state agency be responsible for monitoring the contract, rather than spreading that job over the entire operation.

In Vermont, the DOC has taken that approach and is in the process of hiring a contract monitor, who will be dedicated to overseeing the department's largest contracts: its medical and mental health services.

According to Pallito, that is just one of the changes the DOC is making to ensure that it works more in unison with PHS than it did with CMS.  The department also added a full-time medical director, who is an MD and is responsible for overseeing the medical and mental health contracts and the delivery of those services from an administrative and clinical point-of-view, he said. 

Additionally, Perry explained, the DOC and the state Health Department have joined forces.  While the details of the agreement between the agencies are still being worked out, the goal is for a quality assurance team from the health department to monitor the quality of healthcare services inmates are receiving in Vermont's prisons, he said.

"[The medical director's] team and the team from the health department will provide external and internal oversight over the whole health and mental health contract process," Perry said.

Pallito added that the healthcare team will likely be charged with reviewing patient charts and waiting lists, determining if care is timely and appropriate and assessing whether or not patients' conditions are improving over time.

"The team's job is to really focus on the offender's health from the offender's point-of-view," he said.

While some positions are being added to ensure that the contract with PHS is being monitored appropriately, new procedures are also being put into place to ensure that the DOC does not have the same issues it did with CMS.

According to the Auditor's Report, one problem the DOC ran into with CMS was when the company billed the state for full healthcare staff coverage when the staffing was not always sufficient at all correctional facilities.  To avoid this from happening with PHS, Pallito said that the DOC has implemented a dual identification system to determine when healthcare employees are actually at work inside correctional facilities.

According to Pallito, staff members must sign in when they enter a facility and PHS has also installed an electronic record system, which requires that employees also swipe an ID card when they walk in.

The goal of all of these new mechanisms is to ensure that the PHS is lives up to its contractual obligations and that the inmates are getting the care they need.

"The importance of monitoring this contract and all of our contracts is to make sure that the offenders are getting the services that we are purchasing," said Pallito.  "Paramount in this whole thing is offender health."