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Privatizing psych hospitals makes as much sense as privatizing prisons

Especially when it’s the same outfit doing the privatizing in each case.

Sixteen months after the Montgomery County Mental Health Treatment Facility opened in Conroe, the state’s first publicly funded, privately run psychiatric hospital is facing at least $53,000 in state fines for serious shortcomings in patient care.

The private operator, Geo Care, is a subsidiary of Geo Group, a private prison company that has drawn attention in recent years because of deaths, riots and sexual abuse at some units in Texas and other states.

Geo Care spokesman Pablo Paez declined to comment to the American-Statesman. Montgomery County Commissioner Ed Chance said all deficiencies cited by the state have been fixed.

Meanwhile, the facility’s construction, by a different firm, is the target of a separate federal grand jury inquiry.

The problems come to light as the Department of State Health Services prepares to privatize one of the 10 public psychiatric hospitals it oversees. If Geo Care bids on the ongoing privatization effort — and it has expressed interest to public officials in doing so — its work in Montgomery County could be a harbinger of what taxpayers can expect if a for-profit company wins control of a public state hospital.


Geo Group is best known in Texas for its rocky history in the prison system. In 2007, officials shut down the company’s Coke County Juvenile Justice Center in West Texas, citing unsafe and unsanitary conditions. In 2009, inmates at the Reeves County Detention Center, also in West Texas, rioted over the quality of health care and other complaints.

Although state records don’t indicate such extreme conditions at the Montgomery County hospital, State Health Services proposed in May that the facility pay a $107,000 fine for its deficiencies. Last week, the state tentatively knocked that fine down to $53,000, but the decision is not final.

“The facility is still getting its feet on the ground and is dealing with some startup issues as a new facility,” State Health Services spokeswoman Carrie Williams said. “We need to see improvements, and we’re giving them the opportunity to do that. We continue to work with them and expect them to get it right.”

Well, we’ll see about that. For this kind of privatization to work – for the privatizer to cost less than a state-provided facility and to still make a profit – there’s only two options I can think of. One is to cut corners and pay workers as little as possible. The other is to structure the deal with the government entity that’s paying you to do this service in such a way that the more business you get, the more money you make, then work to ensure that they give you as much business as possible. If you’re really smart, you’ve set things up in such a way that any losses you might have to incur due to business not being as brisk as everyone claimed it would be get covered by your government partner. We all know how well this has worked out for the jail builders and the counties that have gotten into bed with them. It’s hardly a stretch to imagine what could go sideways here. Grits has more.

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  1. amy says:

    I posted this on another part of your blog – posting here too – Geo Care (Geo Corp) put in a bid to privatize Kerrville State Hospital. Their proposal has to be approved by Texas Health and Human Services Commission, then goes to Legislative Budget Board and Governor Perry. The Kerrville Daily Times has several articles about it.

  2. […] here and here for the background. This was a bad idea from the get-go, and I’m glad it’s […]