BILL ANALYSIS
AB 2233
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Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2233 (Nielsen) - As Amended: April 6, 2010
Policy Committee: Public
SafetyVote: 7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the California Department of Corrections and
Rehabilitation (CDCR) to create a new system of inmate health
care delivery and work with the University of California (UC)
and the Federal Receiver to assess the concept of turning inmate
health care over to the UC system. Specifically, this bill:
1)Creates the Academic Correctional Health Care Act, which
requires CDCR to create a preferred provider organization
(PPO) or health management organization (HMO) system of inmate
health care delivery to reduce costs to a level similar to
other large states, while providing a constitutional level of
care to inmates. Implementation of the PPO/HMO shall begin
within one year of the effective date of this bill, with
complete implementation within four years of the effective
date.
2)Requires CDCR in cooperation with UC and the Federal Receiver
for prison health care, to conduct a study to assess the
feasibility of UC taking over responsibility for providing
inmate health care. The bill requires the study to include a
review of similar reorganizations in Texas, New Jersey, and
Georgia, as well as the findings contained in the March 2010
NuPhysicia study, "Assessment and Evaluation: California's
Opportunities for Improved Inmate Health Care Quality and Cost
Controls" (March 17, 2010).
Requires the study be provided to the Legislature by September
1, 2011.
FISCAL EFFECT
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1)One-time costs to CDCR in the range of $150,000 for the study.
The balance of the topics required by this bill are also
addressed in the NuPhysicia study. In addition, UC has
announced its intent to study the issue.
2)Unknown, major annual GF savings, potentially in the hundreds
of millions of dollars, to the extent CDCR is able to
implement a PPO/HMO-style of health care model that is
effective in reducing CDCR health costs. (CDCR and the federal
receiver are currently pursuing this concept and are preparing
a systemwide HMO request-for-proposal.)
COMMENTS
1)Rationale . The author contends California's prison health care
costs can be reduced and cites the experiences of several
other states, as well as the recommendations of NuPhysicia, a
private firm that operates telemedicine methods developed by
the University of Texas Medical Branch for the Texas prison
system.
According to the author, "California's prison health care
costs are two to four times what other large states pay. The
entire health care management and delivery systems need to be
reconstituted based on best practices and not a patchwork of
court-compliance measures that have created a large,
inefficient and costly system.
2)Background - The California Prison Health Care Receivership is
a non-profit organization created to house the activities of
the federal Receiver. The Receivership was established by U.S.
District Court Judge Thelton E. Henderson as the result of a
2001 class action law suit (Plata v. Schwarzenegger) over the
quality of medical care in the state's 33 prisons. The court
found that the care violated the Eighth Amendment of the U.S.
Constitution, which forbids cruel and unusual punishment of
the incarcerated.
In 2006, the court appointed the receiver to oversee the
delivery of inmate medical care within CDCR. According to the
Department of Finance (DOF) in a 2010-11 budget change
proposal, since 2006 the receiver has significantly increased
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the number of clinical staff, clinician pay, access to CDCR
clinicians, and referrals to specialists and contracted
providers, which has resulted in the cost of inmate medical
services increasing from $883 million in 2005-06 to $2 billion
in 2008-09 with only a slight reduction in expenditures
anticipated for 2009-10 and 2010-11. The cost of medical care
was $11,627 per inmate in 2008-09 - double and triple what
other states are spending on inmate health care.
California now has more than 7,000 medical positions for
168,000 inmates. By comparison, Florida has a correctional
health care budget of $439 million and a staff of
approximately 2,500 for 93,000 inmates, and New York has a
budget of $345.4 million and approximately 1,850 staff for
60,000 inmates. CDCR has an inmate to staff ratio of
approximately 24:1, compared to Florida's 37:1 or New York's
ratio of 32:1.
CDCR clinician salaries are also greater than the national
average. While vacancies among clinical staff have been
reduced, the salaries of these clinicians are greater than
comparable positions in other states as well as private health
care provider salaries.
According to DOF, "The significant growth of the Medical
Services Program while under the Receivership has far exceeded
other correctional health care programs throughout the
country. Since the Federal Court took control over the Medical
Services Program, costs have almost doubled as a result of
increased staffing levels and a greater reliance on costly
contracted medical services. While the Receivership has begun
to address the runaway inmate medical costs, to date these
cost control measures have not resulted in sufficient
reductions in inmate medical costs, and there is little data
to demonstrate the under the Receiver's control state
resources are being utilized in the most efficient manner..."
"Other states have implemented efficient and effective
correctional health care models while maintaining funding at
reasonable levels. For example, Pennsylvania contracts for
medical, psychiatric and pharmacy services, but utilizes civil
servants for nursing, psychology and administrative services.
Texas has a major contract with the University of Texas
Medical Branch; Oregon utilizes state employees for
practitioners but contracts with a third-party administrator;
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Indian contracts for all inmate medical services. The
Receiver should look into enacting a medical program that
encompasses the cost efficient successes that other states
have achieved. Ultimately, it may be in California's best
interests to engage with an outside consultant who can provide
the state with an unbiased analysis of California's inmate
medical care system and who is an expert on how to transition
to a more efficient and cost effective system."
3)NuPhysicia . CDCR requested that NuPhysicia complete an
assessment of the current inmate health care system and
analyze whether an integrated corrections health care system
similar to those employed in Georgia, New Jersey and Texas, is
feasible in California. NuPhysicia released its report,
"Assessment and Evaluation: California's Opportunities for
Improved Inmate Health Care Quality and Cost Controls" last
month.
The report opined that "Major changes in method of care
delivery and administrative restructuring will be necessary to
provide progress toward the primary goals of restoring a
constitutional level of care, relieving the State from court
oversight, and providing improved cost management for the CDCR
health care program." The report made a series of specific
recommendations, including the following:
a) Create a new administrative structure, the "Correctional
Health Care Authority" to separate monitoring and budgetary
functions from health care delivery;
b) Integrate medical, dental, and mental health, into a
single health care delivery system;
c) Leverage the strength of the UC health centers by
creating a partnering model similar to other successful,
university based systems in other states;
d) Fast-track operational changes in six key areas:
i) Electronic Medical Records instead of document
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scanning;
ii) Accelerated implementation and use of telemedicine;
iii) Centralized off-site care protocols and utilization
management;
iv) Centralized pharmacy services;
v) Centralized medical supplies system;
vi) Centralized dialysis services.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081