The Private Option
One company has become the biggest provider of jail health care. Sheriffs are worried: “If you’re the only dance in town, you can pretty much call your own shots.”
Story by Marsha McLeod, The Atlantic
WINSTON-SALEM, N.C. – In the span of 24 days in May 2017, two men died in Forsyth County’s jail. Both were fathers. Both were black. The first man, Deshawn Lamont Coley, had written request after request begging for his asthma inhaler – accurately predicting that his sporadic access to it was putting his life at risk. The second, Stephen Antwan Patterson, was found without a pulse about a week after he was booked with a blood-pressure reading that would likely have led any free person to the emergency room. The deaths came at an uncomfortable time for Forsyth County: Patterson died just four weeks before the Board of Commissioners sat down to decide whether to renew a contract with the private health-care company that had cared for the two men, then called Correct Care Solutions and now Wellpath, or sign with someone else.
What might have been a routine board meeting turned tense. “Correct Care Solutions makes the sheriff’s office look bad, makes the county look bad, makes the Department of Health look bad, and makes us commissioners look bad,” Everette Witherspoon, then a commissioner, declared. “So many people have blown up my phone about some of these incidents that it doesn’t even make any sense.” The following week, a regional vice president from Correct Care Solutions, Bill Kissel, showed up to try to massage the situation. It didn’t go well. Commissioners posed a series of questions. Had the company lost any lawsuits? “I am not aware, Commissioner,” Kissel replied, adding that legal claims are often settled before a trial. When would the county see the company’s plan for resolving issues that may have contributed to the deaths? “[That] would not be made public,” Kissel said. “In those eight years [that Correct Care Solutions had the contract for Forsyth County], how many deaths have we had in the jail? Do you know?” Witherspoon asked. “I don’t know offhand, sir,” Kissel said.
In my review of Forsyth County’s videotaped meetings and in interviews with several commissioners, sheriff’s-office staff and community members, it was clear that few seemed totally comfortable continuing to work with Correct Care Solutions. People entering jails are not necessarily society’s healthiest, often detoxing from substances or dealing with mental illness; a death in custody may not imply wrongdoing. But Patterson’s and Coley’s deaths were not a first in the jail under the care of the contractor. Two legal settlements were reached – one for $180,000 and the other for an undisclosed amount, about six months earlier, according to the Triad City Beat – in the deaths of two other inmates, Dino Vann Nixon in 2013 and Jennifer McCormack Schuler in 2014. But Forsyth’s commissioners had exactly zero alternatives. After an exhaustive search for a contractor, starting almost an entire year earlier, the only entity that formally offered its services was Correct Care Solutions. So the board voted to award it an estimated $13.2 million contract for three more years. Only Witherspoon and one other commissioner voted against it.
When I asked Patterson’s mother, Deborah Miles, whether she thought the jail’s health care should be privately run, her reaction was immediate: “No! No! No, no, no. ‘Cause it just becomes a meat market, just a moneymaking thing.” Her son was in jail over a couple of hundred dollars in unpaid child support, she added. “The horrible reason people are there is because they don’t have money to bail themself out for simple stuff! And so you get stuck there,” she said. Patterson’s eldest son and Coley’s mother are separately suing the contractor. (The company declined to comment on ongoing litigation.) Most people held in jails haven’t been convicted, and as of the end of 2017, black people were jailed at a rate of more than three times that of white people. Their charges, too, are often minor: traffic offenses, marijuana possession, petty theft. Put another way, every day, thousands of legally innocent people are stopped, searched, cuffed, booked, examined, locked up and upended from their routines, families, homes and jobs – all without their own medical supplies and prescriptions – to endure a few days, or more, in a jail. Many will eventually see their charges dismissed or pleaded down, if they are charged at all. But the correctional health-care industry depends on them. In a financial disclosure to investors, one publicly traded company, later acquired by Correct Care Solutions, listed reduced sentences, decriminalization and relaxed enforcement among its top business risks.
In the months since Forsyth found itself with a single bidder for its inmate health-care contract, the range of possible providers has shrunk even further. Last fall, H.I.G. Capital, a private-equity firm with more than $34 billion in equity capital under management, acquired Correct Care Solutions and combined it with a smaller company, Correctional Medical Group Companies. They named the combined company Wellpath. Kip Hallman, Wellpath’s president, told me the firm currently serves about 10 percent of the counties in the nation. That number might not seem large, but without knowing which counties, exactly – a detail the company doesn’t disclose – it’s impossible to say how many inmates it serves. What I do know is that Wellpath is now estimated to be the country’s largest correctional health-care company. It works in about 550 jails, prisons and behavioral-health settings in 36 states across the United States and Australia, and cares for nearly 300,000 patients on a daily basis. There is no standard way to compare Wellpath’s performance with its competitors, firms such as Corizon Health and Armor Correctional Health Services. But Wellpath’s rapid ascent is emblematic of America’s booming $40 billion market for private correctional services of all kinds. Its predecessors, Correct Care Solutions and Correctional Medical Group Companies, are stark examples of the surging growth that’s possible with private-equity backing. In its newly grafted, sized-up form, Wellpath is at the beginning of another cycle, with bigger investors and bigger stakes than ever. To deliver returns to its investors, it must continue to grow.
There’s very little research on the country’s correctional health-care market. To gain an understanding of the significance of Wellpath’s rise, I reviewed the minutes and videotape of dozens of county board meetings, pored over hundreds of pages of contracts and proposals, and, with help from Atlantic researchers, contacted more than 150 sheriff’s offices nationwide. Hallman responded in writing to most of my questions and followed up with a phone interview. What I’ve found is striking. Just a handful of firms serve the nation’s largest jails. A contractor deemed problematic can’t always be replaced. And once jails go private, it’s not necessarily easy to go back. With health care, lack of choice isn’t just a market problem, but a factor in the quality of the care patients receive. The Sacramento Bee found that, over a 10-year period ending in 2014, people in custody at California county jails serviced by one private contractor died of suicide or drug overdose at a rate about 50 percent higher than at other county jails when adjusted for population. That contractor later became part of Wellpath, which disagrees with the Bee’s findings.
The H.I.G. fund that holds Wellpath plans to create value through “growth, performance improvement and synergistic add-on acquisitions,” according to the marketing jargon of a pitch to investors. The captain of one jail put it to me in more colorful terms: “The big dogs keep buying up the puppies.” Wellpath’s clients aren’t thrilled. “What if [Wellpath] walked away? Where would we be, right? So knowing that this is a symbiotic relationship: I need them – hopefully, they need me, right?” Bobby F. Kimbrough, Jr., the sheriff of Forsyth County, told me. But, he conceded, the balance of power isn’t exactly equal. “If you’re the only dance in town, you can pretty much call your own shots,” he said.
America’s roughly 3,200 jails held an average total of 731,300 people a day in 2016, and admitted more than 10 million people that year. The system is big and fragmented, and really, it’s not much of a system at all. Unlike prisons, which are run by state or federal agencies for people with longer sentences, jails are generally a local affair, often administered by sheriff’s offices. Since companies like Wellpath first started popping up in the late 1970s, they have figured out how to draw a profit from jails. They get involved when a jurisdiction issues a request for proposals (RFP), a standard government process for inviting contractors to bid on anything from construction projects to garbage pickup. Now more than half of Wellpath’s business comes from jails. Jails are an attractive sector, according to Moody’s Investors Service, because they involve higher margins compared with prisons.
One of the main services these companies provide is not medical care at all, but legal protection. The U.S. Supreme Court ruled in 1976 that “deliberate indifference to serious medical needs of prisoners” was a violation of their constitutional right to be free from cruel and unusual punishment. Private firms thus helpfully offer to take the legal risk off localities’ shoulders, offering, in one company’s words, “safe and defensible care” (though, as Forsyth and others have learned, the legal risk is not gone).
Correctional care is good business, especially as more counties have moved to privatize. In 1996, the industry’s largest company – which, after a merger in 2011, now goes by the name Corizon – was bringing in about $200 million in revenue, according to The New York Times.
Wellpath’s new owner, in a press release, said the combined company is expected to bring in about $1.5 billion annually. Corizon’s revenue was pegged at about $1 billion in 2017, after several years of decline, according to estimates by PrivCo, a research firm.
There is no systematic federal database of how jails provide health care – whether publicly, through a contract with a local hospital network, or with a for-profit correctional health-care company such as Wellpath. The National Commission on Correctional Health Care, an accrediting body for jails and prisons, told The New Yorker that about 70 percent of the jails it inspects contract for medical care. To get a sense of how much of the market Wellpath and its competitors control, I sent a list of questions to the nation’s 50 largest sheriff’s offices. Forty-six responded with answers. Together, they care for about 132,000 prisoners on a given day. Wellpath’s name stood out as by far the most common provider, contracting with 17 of the 27 offices that use a correctional health-care company for the bulk of their care. Several other companies came up once or twice each: Corizon, Armor, NaphCare and Centurion Managed Care. A few others worked with regional firms. (One office refused to answer my questions about inmate health care without a Freedom of Information request; a Wellpath employee subsequently denied it on the grounds that the appropriate department had no relevant records.) The largest jails, such as Cook County’s in Chicago, tended to provide care in partnership with a local hospital system or the county’s health department.
Atlantic researchers and I contacted every sheriff’s office in North Carolina – 100 in all. The companies that formed Wellpath had both held contracts in the state, and I wanted to get a sense of the combined company’s market share now. Thirty-seven offices spoke to us. Almost all contracted for their inmates’ care. A firm called Southern Health Partners held more contracts than Wellpath, though Wellpath works with many of the state’s most populous counties. A few local providers also cropped up. The industry’s consolidation is “scary,” said Major Shon Crisp, a jail administrator in Cherokee County, which used to work with a regional contractor before it was folded into Wellpath. He said he was unsure what he would do without his current contractor, Southern Health Partners.
Many states in the U.S. are without jail-inspection programs, and there is no national agency charged with systematically ensuring the quality of health care. The U.S. Department of Justice has the power to investigate possible civil rights violations of the nation’s inmates, but it’s very rarely exercised. In the past two fiscal years, the department’s Civil Rights Division has opened only two investigations in the nation’s several thousand jails and prisons related to health care. One alleged that a jail in Virginia, which contracts with Wellpath, was providing constitutionally deficient medical and mental health care. (Hallman wrote that the company was in compliance in “all areas” as of January 2019.) The other is ongoing. Because there are no mandatory national standards, jail administrators can decide what care they think is good enough to meet the Supreme Court’s standards, said Carolyn Sufrin, an ob-gyn at Johns Hopkins University and the author of Jailcare, a book based on her research and experience as a physician in a San Francisco county jail. “The only de facto oversight system we have is litigation,” she said. All told, for many inmates, the only means of recourse – after filing a grievance slip – is to sue.
Wellpath likely knows more about jail health care – and the changes prompted by its business model – than any government agency in the country. Yet it considers basic information, including health-care policies, training protocols and its client list, to be trade secrets. In a proposal sent to one county several months before Wellpath was unveiled, Correct Care Solutions asserted that its litigation history was a trade secret. The cases filed against it are a matter of public record, but “without exhaustive efforts,” the company pointed out, “it would be nearly impossible” to compile a complete list. To find out where it has been sued in state court, you would have to call every county clerk in the nation – more than 3,200 in all.
In considering Wellpath’s history, decision makers tend to look at federal lawsuits, which can be accessed online. There, information of a certain kind is plentiful. Wellpath’s predecessor, Correct Care Solutions, had been sued at least 1,395 times in federal courts over the past decade, according to a document published by the Project on Government Oversight. Some of the lawsuits are surely frivolous. “We are being sued right now by somebody who says that when they came to jail, they had a million dollars in a box, and that box is missing,” Dudley Watts, Forsyth County’s longtime manager, told me. But José Saldana, the director of Release Aging People in Prison, pointed out that it costs money to file a civil rights claim. In New York, where Saldana was incarcerated for 38 years, the price tag for prisoners to assert their right to adequate care is at least $350. “I don’t know of anybody who got $350 to throw away in the cage,” he said. Regardless, local governments are apparently disregarding whatever worries the lawsuits might raise, because they keep signing contracts with Wellpath – with seven local governments in 2019 so far, according to Hallman. Likewise, it does not seem to matter that “substandard care” on the part of the company has allegedly led to preventable deaths, according to a recent report by CNN. Wellpath “fundamentally disagree[s] with most of the assertions” in CNN’s reporting, Hallman wrote, disputing that there was any pattern of poor care. “While in the majority of these incidents, we believe our clinicians provided appropriate care, in some of them our clinicians used poor judgment or made mistakes, as all humans do,” he wrote.
In June, three days after the CNN report was published, the Westchester County, New York, Board of Legislators sat down to discuss a renewal of its contract with Wellpath. The board met just a day after a settlement was brokered with the family of Rashad McNulty, 36, who died of a heart attack in the county jail in 2013, after a Correct Care Solutions nurse accused him of faking his symptoms. In 2018, the county put out an RFP for the health-care contract at the Westchester County Jail, located about an hour’s drive from Midtown Manhattan. As The Journal News first reported, only Wellpath and a subsidiary of NaphCare, a firm based in Birmingham, Alabama, responded. At a hearing, Damon Maher, a county legislator, vigorously questioned the county’s head jailer about the CNN report and other news stories. (“I’m sorry if I get a little emotional about people dying in their puke and in their piss!” Maher huffed when chastised for speaking out of turn.) Joseph Spano, the county’s correction commissioner, acknowledged that the media reports were disturbing – but suggested the jail would do no better with its one alternative to Wellpath. “You go and Google NaphCare, and you are going to see similar and alike stories,” Spano said.
Westchester opted to renew its contract with Wellpath. “While we certainly do consider things like litigation histories and other national stories of interest, our main focus is our patients, [and] we know that we’re getting a good level of care,” Justin Pruyne, the deputy commissioner of correction, told me. But Maher told me he still has questions: What were the jail’s statistics on suicides and attempted suicides before and after Wellpath? What were the mortality rates? And what’s being done differently since “the McNulty disaster”?
At one point before it was rebranded as Wellpath, Correct Care Solutions put a human-resources employee in charge of supervising a nurse educator. By way of explanation for someone with no medical training taking on such a charge, she said in a deposition: “We were a small company that grew really fast.” That growth took off in 2010, when two private-equity firms invested in the company, and it proceeded to buy up several competitors. In 2018, H.I.G. Capital stepped in, buying Correct Care Solutions and combining it with another jail-health-care company in its portfolio. The fund in which H.I.G. holds Wellpath is expected to reap “attractive” returns for its investors, according to a heavily redacted pitch book I acquired through a public records request. The possible scale of those returns, however, is unclear. Several pages discussing the firm’s “investment performance” are covered by large black boxes. But generally, the goal for firms such as H.I.G. is to double or triple their money from the time of the initial investment to when an asset is sold. The company’s strategy for building value for its investors, Hallman said, is not to reduce spending at individual facilities, but rather to do good-quality work and keep signing new contracts. In his written responses, Hallman added that the company expects to grow with “very limited reliance” on future acquisitions, but didn’t rule them out. H.I.G. did not respond to multiple requests for comment over several weeks. Hallman pointed out that while members of H.I.G. serve on the parent entity’s board of managers, responsibility for the day-to-day operations is held by the Wellpath management team.
“I think [H.I.G.’s] entire strategy is probably to build a monopoly,” said Bianca Tylek, the executive director of Worth Rises, a nonprofit that advocates against the privatization of corrections. She also pointed out that the entire correctional health-care market has been consolidating for about 10 years. Not all insiders agree – a Moody’s report on Wellpath called the industry “very fragmented” – but none were keen to talk about the industry. More than a dozen financial analysts and investment bankers either did not return my calls or, like Moody’s, agreed to be interviewed and later declined. What matters, though, is that Wellpath is poised to continue growing its market share when some jails are already hurting for choice. “Consolidation begets further consolidation,” said Sally Hubbard, the director of enforcement strategy at the Open Markets Institute. “Private equity is known for rolling up entire industries. Their strategy is to make industries and companies ruthlessly efficient and to extract more revenue from the business than there was before they acquired it.... And that’s not really ideal when you’re talking about health care.”
“At a personal level,” Hallman told me, “we don’t want people to be incarcerated.” But as long as imprisonment is a fact of American life, inmates will need care. One shouldn’t read too much into the disclosure by a public correctional company that reduced incarceration counts as a business risk, he said. “Personally and for our team, I don’t think any of us worry about that.” Wellpath’s purpose, he told me, is to serve marginalized patients. Despite the mission, some of his clients don’t like that the company makes money off it, I pointed out. Hallman said he wouldn’t challenge their moral views, but stands for something else: “I think we do this work better than most counties who do it themselves.” As a private firm, Wellpath has no obligation to share with the public how much money it makes, and Hallman wouldn’t give me details on what he or the company’s CEO earns. But if clients asked, would he share the profit margins with them? “Typically not,” Hallman told me. Some do request detailed cost information, which would give a sense of the company’s takeaway, and “it’s never embarrassing,” he said. “We’re not Google; we’re not making crazy amounts of money. We make a little bit of money at every site.” In fact, the profit margin is less than what most people would expect, Hallman told me. When I pressed for details, Hallman turned the question around. “What would you expect somebody like us would earn?” he asked me. “Probably like 9, 10 percent,” I ventured. “Okay. Not far off,” he said. “Is that crazy?” I asked, trying to calibrate his response. “No, you’re not far off,” he said.
Some of Wellpath’s customers have noticed changes since private equity got involved, and not just in their contractor’s shifting name. Captain Sean Stewart, the corrections-bureau division commander with the Pima County Sheriff’s Department in Tucson, Arizona, told me that when his county worked with a firm called Conmed, there was a reliably personal touch. After the company was bought by Correct Care Solutions, that largely went away. “It feels to me like when they get bigger, it’s more about the money than the service. It seems like if I’m short five or six nurses, the larger the company, the less in a hurry they were to try and hire those nurses,” he told me. In a 2015 federal contract audit of the Reeves County Detention Center in Texas, where one of Wellpath’s predecessors was contracted, the DOJ found there may have been a “potential financial incentive” for the company to leave positions vacant – as it did in 34 months of a 37-month period – because it was paid more for the required positions than it was forced to pay back for each one it left unfilled. “We never intentionally understaff to improve our financial results,” wrote Hallman, pointing to market factors outside the company’s control.
The Federal Trade Commission and the DOJ, in their role as federal regulators, have not prevented Wellpath’s consolidation of the marketplace. Wellpath’s “combination was reviewed by the DOJ and the FTC through the Hart-Scott-Rodino process, and these agencies allowed the transaction to be completed,” Hallman wrote, referring to the federal requirement that large mergers and acquisitions be flagged for review by regulators before closing. (The DOJ told me that the FTC handled the deal; the FTC declined to comment.) That choice may have more to do with the government’s limited resources than with the company’s behavior, however. Regulators have to pick their battles, said Cory Capps, a partner with Bates White Economic Consulting who is focused on health care and who previously worked with the DOJ’s antitrust division. Capps told me that a strong antitrust case often features head-to-head competition between the merging firms, a limited number of other competitors, and high barriers for entering the market – exactly the circumstances when H.I.G. acquired Correct Care Solutions to create Wellpath. By then, H.I.G. was already the owner of Correctional Medical Group Companies, a firm offering similar services – so similar, in fact, that I found seven states in which the two firms directly competed for contracts before the acquisition. In at least two RFPs, the companies were the only two firms to bid. In writing and in our interview, Hallman rejected any characterization of Wellpath as a monopoly, and said the companies’ combination had no major impact on the market.
Wellpath’s corporate structure apparently tripped up its employees in one case. To one client, Wellpath’s accounts-receivable department wrote: “As you may be aware, Correct Care Solutions, LLC recently merged with Correctional Medical Group Companies, Inc. to create Wellpath LLC.” About a month later, the county received a strange follow-up. “Although the two companies share a common ultimate owner,” Omar Mossallati, Wellpath’s director of corporate counsel, wrote, “please be advised that Correct Care Solutions, LLC has not, at any time, merged with Correctional Medical Group Companies, Inc. to create Wellpath LLC.” Instead, he wrote, Correct Care Solutions opted to change its name to Wellpath, and Wellpath and Correctional Medical Group Companies operate separately. The term to use is combination, Hallman said; they are separate entities that share a management team. “We are one company,” he told me. “Or, how do I say this right – we don’t work for one company, but we work for one united purpose.” No formal merger is planned.
The legalistic message seems to contradict the company’s new branding. In a video on Wellpath’s website, Jorge Dominicis, the company’s CEO, formerly of Correct Care Solutions, sits with Hallman, who ran Correctional Medical Group Companies before the creation of Wellpath. Both are well dressed, but casual; in suit jackets, but with their top shirt button undone. It’s friendly, approachable. “Wellpath is a better organization than either of the two organizations were on their own,” says Hallman. “Absolutely,” says Dominicis, nodding. “The resources of both of these organizations complement each other, make us stronger as one organization – more expertise, more opportunity to cross-utilize best practices – and I think people who work and do what we do are passionate. This is, as I’ve said before, missionary work,” Dominicis says.
Forsyth County’s 1,016-bed jail is a ruddy, block-long building that matches the color of the red clay earth where it sits, surrounded by the government offices, courthouses, and fuchsia-bloomed crape myrtles of downtown Winston-Salem. From the jail, walk a few blocks northeast, and you’ll arrive at the Wake Forest Innovation Quarter, a mixed-use research center built in the old R. J. Reynolds Tobacco complex. The quarter is bordered with a cocktail bar, luxury loft apartments, a High Line look-alike, and the Wake Forest School of Medicine, the teaching branch of Wake Forest Baptist Medical Center, which provides the jail’s off-site, emergency care.
About a month after her son, Stephen Patterson, died in the county jail, Miles attended the meeting in which the commissioners debated the single bid for the inmates’ health care. Miles wanted to know how hard the county had worked to scout a local provider. With Wake Forest training doctors just a few minutes’ walk from the jail, why wouldn’t it take the contract? Watts, the county manager, told me the county tried to persuade local providers such as Wake Forest to bid on it. “We are a medical community, and we ought to be able to figure out how not to have to go to a big, multistate national provider,” he said. But there were no takers. Wake Forest did not respond to multiple requests for comment.
Like Miles, Fleming El-Amin, the other Forsyth County commissioner who voted no, wanted a local contractor. Not only was the company getting too big, he told me, but it’s easier to hold accountable someone who’s your neighbor. He dismissed the company’s altruistic arguments. “It was a sales pitch, you know. I said, ‘Y’all quit lying.’ It’s all profit motives, it’s not a goodwill mission, it’s not a community-development issue,” he told me. El-Amin said he didn’t know the county was contracting for inmates health care when he first took office in early 2017. He assumed the county did it. He set about researching Correct Care Solutions, starting with Google – many a local official’s best source on its bidders. “I was shocked they were such a large company,” he recalled. El-Amin felt the single response to the county’s RFP wasn’t accidental. “Something else is happening. This state is too big for one company to have that kind of domination,” he said.
Before Wellpath was created, Correct Care Solutions had been the sole bidder on at least five RFPs, according to media reports and county government records I found published online. That said, many RFPs are very competitive, especially because the opportunity to compete comes up only every few years. They often elicit four bidders. “Competition is alive and well,” the company wrote. “I can’t remember a single bid that I’ve been a part of where we were the only bidder,” Hallman later elaborated. Some lawyers I spoke with wondered whether this competition might be bad for the quality of prisoners’ health care, as the selection criteria of RFPs tend to focus on price, not quality. Or as Saldana, the nonprofit director, put it, “When they do a bidding, they get the lowest bidder, so that company has to keep the costs down. Just the way capitalism works alone would tell me that this might not be a good idea for us.”
Macomb County, Michigan, received one bid in response to its RFP in 2015. It was the year after David Stojcevski, jailed for failing to appear in court for a traffic infraction, died in the county jail. Over 17 days, Stojcevski, 32, lost close to 50 pounds during withdrawal from prescribed benzodiazepines and opiates under the care of Correct Care Solutions. And it was Correct Care Solutions that submitted the single bid, though four entities came to a pre-bid meeting and tour. Questioned by Detroit’s Local 4, Macomb County Sheriff Anthony Wickersham told a reporter: “We had one bid. This is the contract. This is the company. It’s within our budget.” Wickersham declined an interview request, but a staffer in the county’s purchasing department was willing to take a guess at why only one contractor followed through with a bid: “Maybe they saw they [Correct Care Solutions] were there, and got scared away. I don’t know.”
Wholesale prison privatization has become a national political issue. New York has divested nearly $10 million of state pension funds from GEO Group and CoreCivic, the country’s heavyweight private prison operators, and largely banned them from the state. Entities as disparate as the American Federation of Teachers and JPMorgan Chase have worked to lessen their financial involvement. But conversations have largely avoided the question of whether private companies should provide correctional services, whether health care, food or telephone calls. Companies like Wellpath are privatizing huge swaths of jail operations, but they are doing so quietly. Wellpath presents itself as a “healthcare company caring for under-served patients,” and writes on its website that it’s not in the “business of incarceration.” But is a jail still a public institution if key decision makers are employees of a private-equity-backed company beholden to its investors?
Some counties are beginning to question the move to go private, only to find it’s not so easy to go back. In 2013, after struggling for years to retain health-care staff at the downtown jail and the Milwaukee County House of Correction in Franklin, Wisconsin, a judge forced the county to privatize the inmates’ care. But 2016 was a jolt. Terrill Thomas, 38, died of dehydration in the jail after correctional staff had shut off the water in his cell. The county completed an audit in 2018 and found that Armor, the medical contractor for both facilities, had been routinely understaffing the jail and the House of Correction. (An Armor spokesperson said the company “held a difference of opinion” about its staffing levels.) “This is a core function. This is not laundry service,” Theodore Lipscomb Sr., chairman of the county Board of Supervisors, said at a finance-and-audit committee meeting in late 2018, as the county’s contract with Armor was set to end. “This is health care for thousands of people who are in your custody. You must get that right,” he added. On the table was a resolution he’d put forward to affirm the desire of the county board to return to publicly delivered care. The board voted in favor a week later. Lipscomb wanted the county to switch back immediately, he explained to me, but was told it would take two years to build the capacity. There are a few big hurdles, including the up-front investment needed to build an in-house program (and pay a contractor at the same time). The county will also have to pay for expensive legal insurance and figure out how to hire staff amid a shortage of nurses in the state. In the meantime, the county has switched to Wellpath.
Sheldon Wasserman, a county supervisor, is also a physician and member of the Wisconsin Medical Examining Board. He wants to return to publicly run care, but has doubts the county will be able to afford it. “Health care today is not like health care 20 years ago,” he told me. One particularly difficult hurdle for the county, he explained, would be getting its hands on an electronic medical-records system. That cost alone would be millions of dollars. Wellpath and other correctional companies tend to build their own, unlike many of the nation’s hospitals and clinics. “These companies do take advantage of governments that don’t understand [medicine],” Wasserman told me. (Wellpath believes this concern is unwarranted, because people with health-care experience serve on the selection committees of local governments.) “It’s tough for them to get to break into the industry, but once they’re in the industry, they’re gonna fly – they’re gonna make money,” he added. Asked whether he trusts Wellpath, Wasserman replied, “I trust them as far as I can throw ‘em, and I can’t throw that far.”
Milwaukee County’s administration is currently developing a possible model for self-operation. But if it wants to go back to publicly delivered care by 2021, when its initial contract with Wellpath is up, the county needs to allot the money for the 2020 budget cycle. That’s due to be hammered out this fall. In the meantime, the county is monitoring Wellpath’s operations, contracting with an external consulting organization for added muscle – something it never did with Armor.
When I met Kimbrough, the Forsyth County sheriff, he was only a few days out from major shoulder surgery. His right hand was bandaged around the thumb, where his surgeon had cut into it. To greet me, he outstretched his left hand to grasp the fingers of my right. He was technically off the clock, but was still getting in a few hours of work, dressed in a crisp white shirt, a dotted pink tie with a clip and silver cuff links.
Kimbrough was elected to his post for the first time in December 2018, after Coley’s and Patterson’s deaths, and the single bid. On the campaign trail, he kept hearing there was something seriously wrong with the health care at the jail. And so, after his swearing-in, ousting Wellpath was at the top of his to-do list. “I was ready to fire them,” Kimbrough told me. “I came in like, ‘Either y’all gonna fix this, or I’m gonna find somebody else,’ not knowing there’s nobody else to find. I looked around and came to my senses and realized, Let’s rethink this. This ain’t really as bad as they making it out to be,” he said.
When his efforts to work with the company’s regional representative stalled – “I grew up in the microwave era; I want it now,” Kimbrough said with a laugh – he took a new approach. He walked the half block from his office to the jail and asked a Wellpath employee for the telephone number for the company’s head office. To the person who picked up, he said, “I want to speak to the man that calls the shots.”
In March, Dominicis, the company’s CEO, and two other representatives came to Winston-Salem for a meeting. Kimbrough sat them down with about a dozen members of his command staff. “We’re an unhappy customer,” he recalled telling them. He reeled off complaints: Positions were going unfilled, and staff members were making errors distributing medications. “We just was throwing rocks at him. I actually felt bad,” Kimbrough said. But Dominicis “walked out like a champion,” Kimbrough said, and gave him his cell phone number. Kimbrough said he’s since seen a big improvement with the staffing issues and their relationship with Wellpath overall.
Also helping was a public-health nurse the county had installed to monitor Wellpath’s compliance with its contract. Previously, the sheriff’s office checked only whether the company was billing the correct amount, Major Robert Slater, the detention-bureau commander, told me, spotting errors such as a mistaken payment for a federal prisoner’s care or getting billed twice for an ER visit. Lindsay Novacek, the public-health nurse, who has a doctorate in nursing practice, now tracks 11 “key clinical indicators,” which were written into the contract in 2017. “She holds Wellpath to the fire,” the jail’s commander of operational services, Captain Charlene Warren, told me. (Novacek was more diplomatic.)
Few jail administrators seek independent monitoring, Marc Stern, a former medical director of the Washington State prison system and a faculty member at the University of Washington’s School of Public Health, told me. “They forget the private company doesn’t have a fiduciary responsibility to the sheriff – they have a fiduciary responsibility to their shareholders,” Stern said. And few can hold their contractor liable for lapses. In a study of 81 RFPs for jail health care, the Pew Charitable Trusts found that less than a third included any performance requirements or penalties for failing to meet them. Forsyth modeled its monitoring program on Shelby County in Tennessee, whose officials declined interview requests, but who also found themselves with Correct Care Solutions after receiving a single bid. Stewart, the Arizona jail captain and an instructor with the National Institute for Jail Operations, said he tells jail administrators that they can’t just shake hands with their contractor and expect the arrangement to work out. “No! You have to work the contract and demand you’re getting what’s in the contract,” he said.
Lieutenant Christopher Marshall was tasked with taking El-Amin and me on a tour of the jail on my visit in July. First, we went to the dedicated medical wing. Other than a sign reading INMATE BATHROOM and the fact that the chairs in the waiting area were a flimsy beige plastic, with no metal legs, it looked like an ordinary clinic. Through a door were an administrative area behind glass, a small pharmacy, and several offices. In each office was one or two tiny vertical windows. Pinned-up signs chirped Wellpath’s slogan (ALWAYS DO THE RIGHT THING!) and warned against LOOK-ALIKE AND SOUND-ALIKE MEDICATIONS. Another featured a bull’s-eye and read IN CASE OF EMERGENCY, BANG HEAD HERE.
In the pharmacy, medical technicians prepare medications for “med pass” – when a Wellpath employee takes medications from cell to cell on a cart. Novacek now tracks something to do with the “initiation of essential medication.” I don’t know exactly what she’s monitoring, because Wellpath considers its specific performance metrics proprietary, so the county couldn’t tell me.
On each housing floor is a sparse medical-exam room, which removes the need for patients to be marched to the medical unit in the south tower for routine appointments. It’s in the exam room that every inmate should be getting a health assessment within 14 days of booking, an indicator I do know Novacek tracks.
Our final stop was a housing unit for men. At the edge of the cells, Marshall turned to me. “You look at everyone, make sure they’re okay,” he said, and walked along the rows, taking a brief look inside each cell and pausing for a second or so. “We don’t ever come out,” someone called. “Sure am hungry,” said someone else. Waiting for lunch to be passed out, many men were sitting on the floor of their cell in front of the door’s meal slot.
Outside the jail, El-Amin and I stood for a moment on the steps. “Use your journalistic eye to evaluate what you’ve seen today,” he said, giving me a hard look.
The county’s initial three-year contract with Wellpath is up in August 2020. Kimbrough told me the county will be renewing. Considering how much the relationship has improved, it isn’t a difficult decision, he said.
The thing is, most jails don’t have a Kimbrough. Many sheriffs don’t have the time, the interest or the resources to compel a CEO to get on a plane when a contract goes bad. So what happens when jurisdictions need a strong, involved leader (and a compliance monitor) just to get what they paid for? It means Wellpath can take advantage of the reality that most counties won’t realize it if they’re being shorted. The counties take a reactionary position. They often find out something is wrong only after a critical system failure, which usually takes the form of a dead inmate and inquiring local reporters. But a lot can be seriously wrong before someone dies.
Wellpath’s leaders don’t see the firm as powerful. “We don’t feel like we drive anything other than our own business,” Hallman said. They’re just a health-care company that fills a need. If the public officials who oversee that need aren’t happy, they need merely say so. “They have the ability to fire us tomorrow,” Hallman said. But what will tomorrow bring? Will Wellpath’s success draw out new rivals to offer alternatives? Then firing Wellpath could be easy enough. Or will it be more like Forsyth County’s recent past, in which an active and empowered local government found it couldn’t fire the company even if it wanted to? Wellpath’s investors are betting that bigger means better. They’re betting that the country’s love affair with privatization won’t sour anytime soon. But if the hundreds of counties that have handed off their health services decide that privatization didn’t fulfill its promises, it’s going to be hard to wrest this care from corporate hands.
Madeleine Carlisle, Olivia Paschal and Karen Yuan contributed reporting.
About the author: Marsha McLeod is an investigative reporter covering inequality, law enforcement and courts.
This article is part of The Atlantic project “The Presence of Justice,” which is supported by a grant from the John D. and Catherine T. MacArthur Foundation’s Safety and Justice Challenge.
This article was originally published on the website TheAtlantic.com and is republished here with The Atlantic’s permission, with minor edits. Copyright, The Atlantic Monthly Group 2019.