If you have issues viewing or accessing this file contact us at NCJRS.gov. U.S. Department of Justice bffice of Justice Programs National Institute ofJustice National Institute of Justice . I 5 5 U e 5 a n..d P r a. c tic e 5 . 152768 U.S. Department of Justice co National Institute of Justice This document has been reproduced exactly as received from the person or organization originating it. Points of view or opinions stated in CD this document are those of the authors and do not necessarily represent the official position or policies of the National Institute of Justice. I'­ Permission to reproduce this _ g ;J material has been granted by Pub1:LC D::>rnain/OJP /NIJ N u.s. Depa.rtIrent of Justice LO I to the National Criminal Justice Reference Service (NCJRS). Further reproduction outside of the NCJRS system requires permission I of the~owner. I \ I ! . , !: .. ,•.•.. " •.•.•:.-:- ...... , H e a ,I t han .d J. U 5 t i ~ e. '. I J __~ ___ ~""'_-; ____';-"".r About the National Institute of Justice The National Institute of Justice (NU), a component of the • The research and development program that resulted in Office ofJustice Programs, is the research and development the creation of police body armor that has meant the agency of the U.S. Department of Justice. NIJ was estab­ difference between life and death to hundreds of police lished to prevent and reduce crime and to improve the officers. criminal justice system. Specific mandates established by Congress in the Omnibus Crime Control and S afe Streets Act • Pioneering scientific advances such as the research and of 1968, as amended, and the Anti-Drug Abuse Act of 1988 development of DNA analysis to positively identify direct the National Institute of Justice to: suspects and eliminate the innocent from suspicion. • Sponsor special projects, and research and develop­ The evaluation of innovative justice programs to deter­ ment programs that will improve and strengthen the mine what works, including drug enforcement. commu­ criminal justice system and reduce or prevent crime. nity policing, community anti-drug initiatives, prosecu­ tion of complex drug cases, drug testing throughout the • Conduct national demonstration projects that employ criminal justice system, and user accountability pro- innovative or promising approaches for improving crimi­ grams. nal justice. • Creation of a corrections information-sharing system • Develop new technologies to fight crime and improve that enables State and local officials to exchange more criminal justice. efficient and cost-effective concepts and techniques for planning, financing, and constructing new prisons and • Evaluate the effectiveness ofcriminal justice programs jails. and identify programs that promise to be successful if continued or repeated. • Operation of the world's largest criminal justice infor­ mation clearinghouse, a resource used by State and local • Recommend actions that can be taken by Federal, State, officials across the Nation and by criminal justice agen­ and local governments as well as by private organiza­ cies in foreign countries. tions to improve criminal justice. Carry out research on criminal behavior. The Institute Director, who is appointed by the President and confirmed by the Senate, establishes the Institute's objec­ • Develop new methods of crime prevention and reduc­ tives, guided by the priorities of the Office of Justice Pro­ tion of crime and delinquency. grams, the Department of Justice, and the needs of the criminal justice field. The Institute actively solicits the views The National Institute of Justice has a long history of of criminaljustice professionals to identify their most critical accomplishments, including the following: problems. Dedicated to the priorities of Federal, State, and local criminal justice agencies, research and development at Basic research on career criminals that led to develop­ the National Institute of Justice continues to search for ment of special police and prosecutor units to deal with answers to what works and why in the Nation's war on drugs repeat offenders. and crime. • Research that confirmed the link between drugs and crime. U.S. Department of Justice Office of Justice Programs National Institute of Justice NCJRS JUN 't 1995 ACQUISITION!; Managing Prison Health Care and Costs by Douglas C. McDonald May 1995 Issues and Practices in Criminal Justice is a publication series of the National Institute ofJustice. Each report presents the program options and management issues in a topic area, based on a review of research and evaluation findings, operational experience, and expert opinion on the subject. The intent is to provide information to make informed choices in planning, implementing, and improving programs and practice in criminal justice. National Institute of Justice Jeremy Travis Director Cheryl Crawford Program Monitor Advisory Panel B. Jaye Anno, Ph.D. Chase Riveland Consultant in Correctional Care Secretary 54 Balsam Road Department of Corrections Santa Fe, NM 87505 State of Washington P.O. Box 41101 John Byus Olympia, WA 98404-1101 Administrator of Medical and Dental Services Arkansas Department of Corrections Ronald Waldron, Ph.D. P.O. Box 8707 Senior Deputy Assistant Director Pine Bluff, AR 71611 Health Services Division Federal Bureau of Prisons Kenneth P. Moritsugu, M.D., M.P.H. 320 First Street NW Assistant Surgeon General and Medical Director Washington, DC 20534 Federal Bureau of Prisons 320 First Street NW Robert Watson Washington, DC 20534 Commissioner Department of Correction James E. Riley State of Delaware Executive Director 80 Monrovia Ave. Correctional Managed Health Care Smyrna, DE 19977-1597 State of Texas P.O. Box 99 Huntsville, TX 77343-0099 Prepared for the Nationallnstitute ofJustice, U.S. Department ofJustice by Abt Associates Inc., under contract #OJP-94-C-007. Points of view or opinions stated in this document are those of the authors and do not necessarily represent the official position or policies of the U.S. Department of Justice. The National Institute of Justice is a component of the Office of Justice Programs, which also includes the Bureau of Justice Assistance, the Bureau of Justice Statistics, the Office of Juvenile Justice and Delinquency Prevention, and the Office for Victims of Crime. NCJ 152768 Table of Contents Foreword .......................................................................................................................................................... iii Acknowledgements ............................................................................................................................................. v Executive Summary .......................................................................................................................................... , vii Chapter 1: The Rising Cost of Care ..................................................................... :.............................................. 1 Pressures on Health Care Spending in the Coming Years .......................................................................... 2 The Need for Effective Management ......................................................................................................... 4 Chapter 2: Emerging Strategies To Manage Costs and Care .............................................................................. 7 Features of "Unmanaged" Health Care That Affect Costs ......................................................................... 7 The Development of Managed Care To Contain Costs and Change Patterns of Practice ........................ 10 New Forms of Organization ..................................................................................................................... 12 Is Managed Care Less Costly and More Cost-Effective? ......................................................................... 14 Will Conditions in American Prisons Support Cost-Effective Managed Health Care? ........................... 16 Chapter 3: Containing Costs of Goods and Services ........................................................................................ 21 Negotiating Better Prices for Pharmaceuticals ............................................................. :........................... 21 Reduced Prices for Purchased Hospital Services .............................. :...................................................... 22 Getting Reduced Prices From Physicians ................................................................................................. 29 "Making" Rather Than Buying Hospital Services .................................................................................... 29 Sharing Services .......................................................... :............................................................................ 34. Hiring Physicians on Staff or on Contract ................................................................................................ 36 Controlling Costs by Reviewing Bills ...................................................................................................... 37 Summary ................................................................................................................................................... 37 Chapter 4: Controlling the Utilization of Health Care Services .............................................. :......................... 41 Regulatory Policies: Limiting Health Care Services ..............................................................................