Low-Bidding Mental Illness The company that brought us deadly private prisons wants to run Kerrville State Hospital

Posted September 19, 2012 by PETER GORMAN in News

State-run mental health facilities in Texas never have an easy ride: Funding is always tight, and many of them have had problems through the years. But the state hospital in Kerrville, according to advocates and regulators, has been doing pretty well — especially considering that it cares for people who’ve been committed by the courts in connection with serious and sometimes violent crimes.

So why are state officials considering turning over the hospital to a private company that has been found liable for deaths by negligence at similar facilities in Florida and fined for poor patient care in Texas? A firm whose parent company has such a bad record in running prisons and youth facilities that a federal judge called one of those facilities “a cesspool of unconstitutional and inhuman acts”? That’s what a coalition of mental health advocacy, civil rights, and criminal justice reform groups would like to know. They’re opposing the bid by GEO Care, a spinoff of the private prison operator GEO Group, to take over operation of the Kerrville facility as part of a public-private partnership. The company is the only bidder for what would be a $24 million contract –– and is promising to run the hospital for less than the basement-level funding the state now provides.

The short answer to “why” is that state officials sought bids for a private takeover because the Texas Legislature told them to — with the requirement that bidders agree to reduce costs by 10 percent from what the state now spends. And Texas already spends less per citizen on mental health care than any other state.

It’s part of a broad push in Texas state government in recent years to farm out state-run operations to private companies and, in some case, to sell off state facilities to those firms. In this case the state is simply looking for a way to save a few million dollars through privatization.

GEO Care and GEO Group leaders say they can run the Kerrville facility better and at less expense than the state has run it and can make a profit doing so, while meeting the “highest standards and best practices in the industry.” They downplay the companies’ track record of lawsuits, fines, and deaths of people in their care.

Critics of the GEO companies are livid at the proposal.

“GEO has a track record of heinous things,” said Dr. Ana Correa, executive director of the Texas Criminal Justice Coalition, which advocates for a more effective and fair system of criminal justice. “I’m mortified at the idea that GEO would be in charge of a state hospital.”


The history of GEO Group, formerly a division of the security giant Wackenhut, is riddled with stories of poor inmate care at several of the dozens of jail and prison facilities it runs across the United States and in other countries.

In West Texas, deplorable conditions at a GEO-run detention center in Reeves County led to a major riot a few years ago. In the late 1990s, when Coke County Juvenile Detention Center held young women, Wackenhut was found to have hired a convicted sex offender as a guard. He sexually assaulted a 15-year old detainee. In 2006 and 2007, a male sex offender hired as a guard at the same facility — which by then held juvenile males — was found to have sexually assaulted several inmates.

In 2007, Idaho ordered removal of all its inmates from the GEO-run Dickens County Correctional Facility in Spur, Texas, after an Idaho state inspector saw the facility and called it the worst he’d ever seen. The following year Idaho pulled all 305 of its prisoners from the GEO-run Bill Clayton Prison in Littlefield, Texas, after an inspector found that chronic understaffing had put Idaho’s prisoners at risk. GEO still runs 13 state prisons and federal immigration facilities in Texas, many of which have had serious problems.

More recently, a Justice Department investigation into the company’s Walnut Grove Youth Detention Facility in Mississippi concluded that GEO officials ignored sexual misconduct by staff with inmates and ignored  the inmates’ medical needs and their suicidal and self-injuring tendencies. The investigators also found that the GEO staff used excessive force on the young people in their care.

In April, a federal judge concluded that the staff at Walnut Grove had “allowed a cesspool of unconstitutional and inhuman acts and conditions to germinate, the sum of which places offenders” –– some of whom were as young as 13 — “at substantial risk.”

The GEO Group did not attempt to renew either its contract with the Walnut Grove facility or its contracts with two other jails in Mississippi. The GEO Group also claimed that the incidents in the Justice Department report occurred before GEO took over the facility — despite the judge’s ruling against the company in a lawsuit brought by the father of one inmate, with help from the American Civil Liberties Union.

In 2000 the prison company spun off GEO Care as a wholly owned subsidiary to run state psychiatric hospitals in Florida and South Carolina and the Montgomery County Mental Health Treatment Center in East Texas. GEO Care also operates other facilities in Texas, including minimum-security jails, re-entry centers for people about to be released from prison, and residential treatment centers for troubled youth. The subsidiary’s record has been almost as problematic as that of its parent company.

The deaths of three patients last summer at GEO Care’s South Florida State Hospital in Broward County prompted an investigation.

In June 2011 a schizophrenic patient with a history of suicide attempts was left with just one security officer rather than the two trained staffers who were supposed to accompany him at all times outside the facility. He broke away and leaped to his death from a parking garage. That same month, a heavily medicated patient was found dead in a bath of scalding water. Two months later, a third patient was found with her head slammed through a wall and died of those injuries.

In their report, investigators with the Florida Department of Children and Families detailed the overmedication of patients and described staffers who weren’t sure of their duty to report deaths and weren’t worried about their patients’ mental health.

After that, Florida officials renegotiated GEO Care’s contract to require that a state investigator be on site at the hospital at all times. Since then GEO Care has corrected many of the problems at the facility.

GEO spokesman Pablo Paez declined to talk about the deaths at the Florida hospital. His e-mailed response did not address many of the questions asked by Fort Worth Weekly but said, “Our company has a long-standing record of providing high-quality mental health services and improved patient outcomes at a savings to the taxpayers in states like Florida, Texas, and South Carolina.”

In Texas, however, GEO Care has also run into trouble with its hospitals. The company has been fined tens of thousands of dollars by the Texas Department of State Health Services for a variety of bad practices at the Montgomery County hospital, which GEO Care has run since it opened in March 2011.

The host of violations documented by the state at the facility north of Houston range from unauthorized patient restraint and seclusion to keeping patients hospitalized for months after they’d been found competent to stand trial

Carrie Williams, spokeswoman for the state health services agency, confirmed that the agency had issued a notice of violation to GEO Care at the Montgomery County hospital with regard to patient care.

“I believe the exact figure in the notice was $107,500, but the final amount of the penalty won’t be known for another month or so,” she said.

The health services agency will make a recommendation to the legislature about the GEO Care bid. Williams declined to comment on whether that evaluation would include the company’s performance at Montgomery.

In e-mails to the Weekly, Paez insisted that should GEO Care take over the hospital, standards would be of the highest quality. He sent a spreadsheet showing that at both the Montgomery County hospital and one of GEO Care’s Florida facilities, incidents of forcible patient restraint and seclusion were “significantly below the rate at comparable state psychiatric hospitals in Texas.”

GEO critics say that the company’s record of abuses and problems is likely to continue if it gets the Kerrville contract.

Bob Libal, a member of a group called Grassroots Leadership, said in a press release, “I think that the GEO Care record in Florida, where the three deaths occurred, and in Montgomery County, where GEO Care is currently being fined by DSHS for lack of quality patient care, has already shown itself to be similar to what we’ve seen in the GEO correctional facilities.”

Libal, shown at a protest over conditions at a federal immigrant detainee center:
GEO’s poor record
“makes me wonder how they will operate a state mental institution.”
Courtesy Bob Libal

Grassroots Leadership is a nonprofit fighting to end the for-profit prison industry and is part of the coalition opposing GEO’s Kerrville bid. The coalition includes groups from the Texas ACLU to a board of the United Methodist Church.  Their position is that hiring GEO to run that facility, while being proposed as a cost-saving move, could carry a high cost, not only in patient suffering but also in taxpayer dollars, in the long run.


The contract for operating the Kerrville hospital would be lucrative. The state spends about $27 million on it each year, or an average of $375 per night per bed –– and the 200 beds at Kerrville are usually all filled. Few people believe GEO Care could maintain the current level of care, cut spending by the required 10 percent across the board, and still make a profit.

Kerrville patients are almost all long-term residents (the average stay is 921 days) involved with the criminal justice system: They have either been found not guilty of crimes by reason of insanity or were ruled incompetent to stand trial, also because of mental health issues. Although the patients have been deemed not to be a danger to themselves or others, Williams said, “There is a level of security at the hospital, though it’s not our maximum- security facility.

“The thing to remember,” she said, is that, regardless of the backgrounds of the residents at Kerrville, “we make sure our patients are safe and well taken care of, and we will maintain those standards whether or not a hospital is ultimately privatized.” She would not confirm that GEO Care had submitted a bid to operate the Kerrville hospital, but another state employee did.

On one hand, say mental health experts, such a facility might be a natural fit for GEO, with its prison experience. On the other, those same experts note that the Kerrville patients have complex needs, and the state is already doing a good job, with very little room for further budget- cutting.

Correa, of the criminal justice coalition, knows GEO through its privatized prisons, “where we’ve seen their priority is to make money,” she said. “And to do that you cut salaries, you cut the care element. That’s our biggest concern.”

If the privatization of the Kerrville hospital is approved, she said, the results “are not going to be good for Texas.” Or perhaps for the citizens — and voters — of Kerrvile.

The hospital now employs about 535 people, with the usual state employee benefits — no small thing in a town of about 50,000. It’s Kerrville’s third-largest employer, ranking below only the school district and regional hospital.

Susan Garnett, deputy chief executive officer of Mental Health Mental Retardation of Tarrant County, said the Kerrville facility has a good reputation and good community relations. “Those are state employees, and both they and their community will likely have a good deal of input into the discussion to privatize that hospital,” she said. “And I would be surprised if that input was not taken seriously.”

Katherine Ligon, mental health policy analyst with the Center for Public Policy Priorities, sees a potential problem with turning over a state hospital to a private company that might decide to walk away from the contract if, for instance, the company begins losing money.

“What happens if GEO Care gets the bid approved and they’re providing services and then two years down the line they’re in the red? Will they just leave? And what happens at that point?” she said.  The state would have to gear up to keep the hospital functioning, and during that time “what happens to those patients?”

Libal worries about handing Kerrville over to GEO because the residents are in such a poor position to advocate for themselves and to report abuse, neglect, or other problems.

GEO’s poor record at other facilities “makes me wonder how they will operate a state mental institution with a population that is both vulnerable and potentially volatile,” he said. His organization and the coalition it is a part of wrote to Gov. Rick Perry to outline their reasons for opposing privatization at Kerrville.

If GEO Care turns out to have the same kind of problems that GEO Group has racked up in its “long and troubled history in Texas,” Libal said, the savings to the state could disappear rapidly. “ GEO has paid millions in lawsuits over the deaths of prisoners. If that kind of liability were to fall on the Department of State Health Services, GEO’s cost-cutting measures might not save taxpayers money,” he said.

The idea of putting Kerrville and Texas’ other mental hospitals up for privatization didn’t come from any state agency, but from the Texas Legislature. Who in the legislature slipped this measure into a rider on an appropriations bill last year isn’t so easy to determine.

“We oversee the hospitals as directed by the legislature. So we were following their direction in putting out the bid,” Williams said.

Ligon: “We don’t spend any money on mental illness in Texas to begin with, so how can we possibly reduce that? Courtesy Katharine Ligon

Ligon: “We don’t spend any money on mental illness in Texas to begin with, so how can we possibly reduce that? Courtesy Katharine Ligon

The rider directed that all the state hospitals for the mentally ill be offered up as public-private partnerships — but GEO Care’s bid for Kerrville was the only one received for any of the hospitals. The legislature tried the same thing in 2003 but got no takers at all, probably because that measure called for a 25 percent savings to the state.

This time the rider was attached in appropriations committee hearings during the regular session and again during a special legislative session in August.

“There’s crap that gets slipped into the appropriations bill every session,” is how State Rep. Lon Burnam put it. The Fort Worth Democrat is opposed to privatizing any public service, but he particularly detests the anonymous, back-door method by which this major change for an important institution was put in motion.

“Riders are simply attached to the appropriations bills with no ownership,” he said. “No one is the recognized author, and they are not voted on separately when the appropriations bill is voted on. If members of the legislature don’t go through the riders and pull them out to amend them if they don’t like them, well, then, when you vote on the appropriations bill, you’re also voting for the riders.”

Burnam finds the use of riders fundamentally flawed because they’re not done in a way that’s open to the public. “In fact, they’re not even added with the awareness of anyone in the legislature who is not on the appropriations committee,” he said.

When the legislature meets in January 2013, consideration of GEO Care’s bid for Kerrville will be on their to-do list.

Adrianne Kennedy, president of the National Alliance on Mental Illness, said it would be premature for Texas to award the Kerrville contract to GEO or any other company until the issue is first studied extensively. Her group is the nation’s largest grassroots mental health organization, dedicated to helping those affected by mental illness.

Privatization of a public institution requires strict oversight to protect the public interest, she said. There are complex community issues at stake, she said, and “it can be deceiving to be saving money on the front end and in the course of these illnesses, you wind up spending money on the back end.”

The push toward privatization is only one part of the serious crisis in mental health care and treatment in this country, Kennedy said. Because there aren’t enough resources in most communities, mental health issues often don’t get treated early, when they are manageable, but only when they become major problems to individuals, families, and the community.

“We have a huge population of people with mental illnesses who received little or no care until their situation was in crisis,” she said. Many mentally ill people didn’t have to wind up entangled in the criminal justice system, she said, if they’d received help early on.

Those who develop mental illness all too often become “throw-away people,” Kennedy said. “One day they are the stars of their football team, leaders of their class, and then suddenly their mental illness crops up, and they just fall off the face of the earth. And they didn’t need to.”

To privatize state mental hospitals before the deeper challenges of mental health care are addressed is putting the cart before the horse, she said. “The truth is we have to make mental illness something we can talk about and something that constituents care about. Otherwise those people will always be marginalized.”

Repeatedly, advocates and others asked where legislators think the 10 percent savings — on top of a profit percentage — is going to come from at Kerrville or any state hospital in Texas.

“The hospitals are already run on a shoestring,” said Lynn Lasky Clark, president of Mental Health America of Texas, the state’s oldest mental health advocacy organization. “So where are you going to save that money if not [by reducing] the care of the patients? Who will they hire for staff? Will they provide less benefits to their workers? Less pay? All of those things will [affect] the caregivers, which in turn will affect the patients.”

Katherine Ligon, mental health policy analyst with the Center for Public Policy Priorities, described the financial situation of Texas’ mental hospitals this way: Wring all the water out of a washcloth, until it’s bone dry. That’s the current Texas mental health budget. Now try to take 10 percent more water out of it. That’s what the legislature is demanding GEO Care do at Kerrville.

“We don’t spend any money on mental illness in Texas to begin with, so how can we possibly reduce that without jeopardizing the quality of care we provide?” she said. “We want to assure the quality of care of those patients and put that above the costs or possible profit of a private company.”

Garnett said MHMR facilities and agencies in Texas are asked periodically to review whether a private company could provide some of their services better and/or for less money. That’s a legitimate consideration, she said, but she fears the public may think that the private sector will automatically do a better job. “And that’s not always true, particularly in the case of mental institutions, where saving money and lowering care is not a good equation.”

When GEO Care came in to run mental hospitals in Florida, it was to help remedy a situation in which the state was under court order to improve a poor level of care.

But no one questions the quality of care being delivered at Kerrville, Garnett said. “In Texas it’s all about appropriations, that’s all.”

Libal, shown at a protest over conditions at a federal immigrant detainee center: GEO’s poor record “makes me wonder how they will operate a state mental institution.” Courtesy Bob Libal

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