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Calif. to examine medical staffing at state prisons and hospitals

An audit request suggested it costs California up to three times more for contracted medical staff compared to using state employees

California State Prison, Sacramento

A guard tower overlooks California State Prison, Sacramento, in Folsom last month.

Paul Kitagaki Jr./TNS

By Vik Jolly
The Sacramento Bee

SACRAMENTO, Calif. — California will evaluate the outsourcing of medical and mental health care services at state prisons and hospitals with an audit request suggesting it costs the state up to three times more for contracted medical staff compared to using state employees.

The Joint Legislative Audit Committee’s approval of Assemblyman Josh Lowenthal’s request comes on the heels of Gov. Gavin Newsom’s release of his proposed May revisions to fill a remaining current fiscal year gap of $27.6 billion, in which Newsom called for the elimination of 10,000 unfilled state positions for a savings of $762.5 million to the state.

Lowenthal, D- Long Beach, whose audit request predates the governor’s suggested trims to the budget by about two months, notes that the medical and mental health workforce at the Department of State Hospitals, the California Department of Corrections and Rehabilitation, and the Department of Developmental Services, face “unsafe staffing shortages.”

These shortages have led to the state’s dependence on private contractors that, in at least one instance outlined in Lowenthal’s audit request, have cost the state hundreds of millions of dollars.

The state’s reliance on outsourcing of the care “has reached an alarming point of abuse,” Lowenthal noted in his audit request to the Joint Legislative Audit Committee, adding that while utilizing private contractors is commonplace, California’s reliance hit an all-time high during the COVID-19 pandemic.

“Regrettably, even after the state of emergency concluded, the utilization of private physicians, psychiatrists, psychiatrists, nurses, licensed clinical social workers, and psychiatric technicians persisted, indicating a sustained trend that necessitates immediate attention and rectification,” the assemblyman said in the request.

High vacancy rates

According to the nonpartisan Legislative Analyst’s Office’s 2023 analysis, the average state staff vacancy rate hovered between 10% and 15%, but over the last few years, that rate has surged now to approximately 20%.

The California Association of Psychiatric Technicians, which represents care providers within the Department of State Hospitals, has 1,300 of its 4,300 budgeted positions vacant, a 30% vacancy rate. At some Department of Corrections and Rehabilitation facilities, the vacancy rate is as high as 45%, Lowenthal audit request noted among examples he cited.

“Notably, at numerous state hospitals and prisons psychiatrists and social workers grapple with vacancy rates reaching as high as 80%-90%,” the assemblymember wrote.

The employees unions voiced support for the audit.

“This rigorous examination underscores the paramount importance of fiscal accountability to the state and its taxpayers, particularly when budget savings are needed to address the state’s current budget shortfall,” the California Association of Psychiatric Technicians said in a press release.

True costs of contract work unknown

In 1995, a federal court found that the California Department of Corrections and Rehabilitation “failed to provide adequate mental health care, concluding that its mental health staff was “stretched dangerously thin,” Lowenthal noted.

In 2023, California was fined $50 million after the court found that the state had not corrected its ongoing staffing shortages, the assemblymember wrote.

To fill gaps in vacancies, Lowenthal said, the state relied on outsourcing the work traditionally done by staff for as much as three times the rate paid to civil service employees.

“This pervasive outsourcing has continued for so long that the size and the true costs of this hidden workforce are now unknown and have mushroomed beyond any intent of the Legislature,” the assemblymember said.

Lowenthal cited a three-year contract with one California Department of Corrections and Rehabilitation vendor as being worth $425 million. The state appears to have paid $120 million per year on average in the last decade for services provided by the company, totaling nearly $1.2 billion over that time period, the audit letter notes.

The assemblymember was not immediately available to comment Monday but his office said he hopes, that among other clarifications, the audit will show precisely what were the services rendered.

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