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California counties look to private firm to run new state psychiatric hospital

Atascadero State Hospital, shown above in this 1999 photo, cares for more than 600 mentally ill patients.
Reed Saxon/AP
Atascadero State Hospital.

A statewide consortium of county mental health officials is planning to create California's first privately-run state mental health hospital. It says it's the fastest way to address the persistent shortage of beds for the state’s most dangerously and severely mentally ill.

But critics of prison privatization worry care will worsen, pointing to past problems with the contractor, Correct Care Recovery Solutions, a spinoff of the private prison giant GEO Group.

The proposed facility would serve around 250 civilly-committed patients - those hospitalized because they're deemed a danger to themselves or others. That would allow the current network of state hospitals to continue to house people who are charged with crimes but found mentally incompetent to stand trial or not guilty by reason of insanity.

"The state hospitals are jammed and are very difficult to get people in," said Wayne Clark, director of the California Mental Health Services Authority, the consortium of California county mental health agencies.

In June, the list of people waiting to get in reached a five-year high of 700. On average, patients found incompetent to stand trial waited two months to get a hospital bed, but some can wait several months.

Many are waiting in county jails, predominately in Los Angeles County, where they are entitled to basic mental health care, but long-term psychiatric treatment can be delayed.

Civilly-committed patients are housed in local psychiatric hospitals, which can charge between $600 to $1,300 a day in Los Angeles County.

Even when patients do get transferred to state facilities, counties still have to pay for their care. The state bills about $650 per patient, per day. That added up to more than $55 million in 2015 for Los Angeles county alone.

Cutting corners?

County mental health leaders predict Correct Care will cut their annual costs by as much as 10 percent.

The project comes as the federal government begins to turn away from the private corrections industry. Safety concerns led the Justice Department to announce in August a plan to stop using private firms to run federal prisons and, days later, Immigration and Customs Enforcement said it would consider moving away from private immigrant detention centers.

Still, many state and local governments are attracted to the private market's promise to drive down costs. That worries critics.

"They are securing these contracts by promising to treat the most people at the lowest cost," said Cate Graziani, a community organizer at Grassroots Leadership, a group critical of privatization. "And what this results in is a dangerous practice of cutting corners, especially staff. And this is where we see incidents of abuse, neglect and death."

Graziani points to South Florida State Hospital as an example. The facility was one of the first state mental health hospitals in the U.S. to be privatized. It was managed by a division of GEO Group until 2014, when Correct Care Solutions bought the unit.

In 2011, Florida’s Department of Children and Families, which oversees adult protective services, launched an investigation into the facility after three patient deaths that year. 

In one case, a heavily-medicated man was found dead in a bathtub. The water was so hot, staff reported, the patient’s skin sloughed off his body.

Florida investigators determined Correct Care staff was fixing the problems, yet adult protective services continued to find abuse and neglect at the hospital. Between 2011 and 2015, investigators verified 19 claims that staff abused, neglected or poorly supervised those in their care, records show.

In one case, a technician reacted to a patient spitting in her face by throwing him to the ground, bruising his legs, arms and chin.

"The bruises are from [the technician], she did them all," the patient told staff.

Another staffer drove a patient to a nearby hospital for medical care and parked the car on the 8th floor of the garage. The patient ran and jumped from the roof to his death.

Nothing "excessive or unusual"

Graziani said Correct Care has a history of understaffing, leaving patients vulnerable.  

Correct Care did not respond to repeated requests for comment, but the South Florida State Hospital investigation found staffing levels were adequate. In official communications, company executives have emphasized the "quality and safety" of their patient care.

"CCS hospitals and treatment centers provide care for some of the most complex patient challenges in the medical profession," Correct Care Division President Marta Prado said in a 2015 press release.

"Our nurses, doctors, mental health professionals and caregivers work tirelessly 24 hours a day, seven days a week to provide best-in-class care," she said. 

When asked about Correct Care’s problems in Florida, Clark stressed that his agency undertook due diligence before selecting Correct Care for the project in California.

"I don’t recall all the detail of the concerns that were raised," he said. "We know this happens in this industry so we didn’t think it was anything excessive or unusual."

He also said Correct Care was the only one of three bidders with experience running a state hospital.

The Mental Health Services Authority would have ongoing "on-site monitoring of care for [Correct Care's] clients," ensuring the firm appropriately staffed the hospital and complied with other federal, state and local regulations, said Mary Marx, clinical district chief for the L.A. County Department of Mental Health.

Correct Care provides higher quality services than California’s public psychiatric hospitals, Clark said.

Problems at state-run hospitals

Patients have injured themselves, other patients and staff at California’s publicly-run hospitals. About 3,500 patient-against-patient assaults were recorded statewide in 2014, according to the latest available records.

Metropolitan State Hospital in Norwalk admits the largest percentage of civil commitments, the type that would be transferred to Correct Care’s facility. It’s had its share of problems.

California Department of Public Health investigators found at least 55 deficiencies at Metropolitan from 2011-2015 related to a patient’s "right to be free from harm, including unnecessary or excessive physical restraint, isolation, medication, abuse, or neglect."

Staff corrected each of the deficiencies immediately upon learning of them, said Ralph Montano, spokesman for the Department of State Hospitals.

"The safety of our patients and staff is our highest priority," he said in a statement. "However, we are dealing with patients with severe mental illnesses, many of whom are forensically committed following serious acts of violence."

Stephanie Clendenin, deputy director of the California Department of State Hospitals, said her agency has also been working to address the waitlist, which has existed for more than a decade.  

The state has added 300 beds in the last three years to alleviate the backlog, Clendenin said, but "the referrals continue to increase beyond what was anticipated."

The squeeze at the state level is putting pressure on local officials.

"Demand is huge," Marx said.

Some experts suggest rising homelessness is a contributing factor; some say its drug abuse, which can exacerbate mental illness. Others point to prison depopulation or suggest the criminal justice system is getting better at identifying the mentally disabled.

The long wait for a bed

A jury found Harold Turner’s daughter, who has paranoid schizophrenia, not guilty by reason of insanity in 2009. She attacked a family member and was charged with premeditated attempted murder. He withheld her name to protect her privacy. 

Turner, who is now director of programs at a local affiliate of the National Alliance on Mental Illness, welcomed the idea of his daughter serving a stint in a state hospital. He recalled thinking that perhaps she could finally get the intensive therapy she needed.

But more than 1,000 people were in line for a bed that summer.

"I’m like, how is there not a bed there?" he recalled thinking. She waited in jail three months.

Another patient, Rodney Bock, a farmer and father of four, hanged himself in a jail cell in Sutter County, north of Sacramento, in 2010 – 10 days after a court committed him to a state hospital. An ACLU lawsuit faulted jail staff for not following suicide prevention protocols.

The Mental Health Services Authority hopes to start transferring patients to a Correct Care facility as soon as 2018. But first, officials will need to find a location for the new hospital.

In one scenario, the consortium would find an abandoned government building – such as an unused juvenile detention center – which Correct Care would pay to renovate.

Clark said another reason the consortium wants to set up a privately-run facility is counties’ desire to have greater control over the patients they commit.

"From our perspective, we weren’t really getting the kind of service we thought was best for our patients," Clark said. "Nothing against the state hospitals, but it just wasn’t working that well.  We thought we’d try something different."