Sunday, December 8, 2013

100 Percent Privatized

Earlier this year, all of Florida's juvenile residential facilities became privately-operated. Uncommon Journalism speaks to several analysts and experts on what the decision means, not only for Florida, but the United States juvenile justice system as a whole.

By: James Swift

There are almost 60 residential facilities currently providing services to juvenile offenders in Florida. And in 2013, all of them became managed by private contractors.

While the state has only recently become home to a completely privatized residential facility system, a large number of Florida’s beds have been operated by contracted providers since the state Department of Juvenile Justice (DJJ) was formally established in 1994. And the privatization of juvenile services in Florida stretches back even further than that, with the state's first private juvenile service provider emerging in 1974.

Even before complete privatization of services, between the years of 1997-2011, Florida had more youths in privately-operated residential facilities than any other state. By 2011, almost 14 percent of the nation’s entire privatized residential juvenile population resided within Florida alone.

The effectiveness and quality of such facilities compared to state-operated ones has been disputed and debated in Florida for years. In 2004, Yale University’s Economic Growth Center released a report stating that while Florida’s privatized facilities were indeed cheaper to operate than state-managed facilities, both recidivism rates and daily hazard rates were higher among the privately managed programs. Later, a 2008 Florida TaxWatch comparison of both privatized and state-operated residential facilities  -- both secured and non-secured -- revealed that daily usage rates in state-operated programs were higher than the daily usage rates of privately-managed facilities. The same report, however, urged the state to better monitor contractors, adding that “the lack of full cost analysis poses a risk to the citizens and youth served by DJJ programs.”

Although state legislators have largely embraced Florida’s privatization of residential services, others have criticized their use, citing safety, oversight and accountability concerns. As juvenile justice agencies nationwide continue to struggle with rising costs and dwindling budgets, Florida’s privatized system -- hailed by some and condemned by others -- very well could become a model adopted by more states across the nation.

The State’s Response

At the end of October, Florida Accountability Tracking System (FACTS) data revealed the DJJ had almost 500 active contracts, worth more than $2 billion in total value.

Among the state’s residential facilities, nearly half are operated by just two entities --  G4S Youth Services and Youth Services International -- while smaller operations, such as Twin Oaks Juvenile Development Inc. and Gulf Coast Youth Services, provide mostly regionally-based vocational and specialized treatment services.

“When Florida had state-operated facilities, there were no major differences in the types of services youth received and the oversight standards and protocols were identical to those for provider-operated facilities,” said Meghan Speakes Collins, Communications Director for the state DJJ. “When state-operated facilities existed, the same robust oversight policies and procedures were applied to contracted and state-operated facilities.”

Florida’s juvenile justice system is unique, she said, in the sense the DJJ oversees and funds more or less the state’s entire continuum of juvenile justice services, encompassing everything from prevention to post-commitment supervision. The privatization of the state’s residential facilities, she said, does not deter the DJJ from investing in non-commitment alternatives, however.

“Because Florida DJJ administers the entire continuum of juvenile justice in Florida, we have great flexibility to shift resources from commitment programs to the front-end of the system as part of our ongoing reform initiative,” she said. “For example, the Legislature recently authorized the Department to direct some of its savings from reducing commitment capacity to community-based programs including redirection programs and enhanced transition services.” Nor does she believe the privatized system alters how judges may sentence juvenile offenders. “The Department’s recommended plan for treatment is statutorily mandated to be one that meet’s the child’s needs,” Collins said, “with the minimum program security that reasonably ensures public safety.”

The last round of privatizations, she said, saved Florida about $2.5 million in costs. Those savings, she added, were then moved to the front end of the system for prevention services.

The DJJ, Collins said, holds private residential facilities to strict standards. “We have robust oversight policies and procedures that are applied to all residential commitment programs,“ she said, “with a robust team of monitors who routinely visit facilities in its jurisdiction, without notice, to ensure these department’s standards are being met and/or exceeded.” Contracted programs, she said, are also required to have advisory boards made up of local community members.

From 2006-2011, recidivism rates in privatized facilities, Collins said, were slightly lower compared to state-operated ones. Over the five year period, recidivism rates in contracted facilities averaged out to 43.2 percent, while the average state-operated rate was 45.6 percent.

“The oversight for residential programs includes incident reporting criteria, quality assurance and quality improvement standards, ongoing program monitoring, youth interviews, corrective action planning, PREA compliance, and facility review and technical assistance,” she said. “The Department’s robust oversight protocols prioritize youth safety in all facility types.”

More Contractors, More Accountability?

“The system has been privatized for about 30 years,” said Cathy Craig-Myers, Florida Juvenile Justice Association Executive Director. “And for about 20 years, it has been primarily privatized anyway.”

Florida’s approach, Craig-Myers said, helps the state provide a wider array of programs for juvenile offenders, including out-of-community treatments for sex offenders and juveniles who require substance abuse counseling.

“One of the good things about the privatized system is that many of the providers that are working out in DJJ, under DJJ right now, have been around for a long time,” she said. “There’s a lot of organizations that have been taking care of kids for 30 years, and continue to do a good job, although their service needs are a little different now.”

In 2007, Florida had approximately 7,000 residential beds. Since then, the state has reduced its numbers to just 3,000. That decrease, Myers said, gave the state greater incentives to totally privatize its facilities.

State-operated residential programs, she said, were not as flexible as their privatized counterparts in terms of program services. Furthermore, she said state-operated facilities were much costlier than privatized ones, due primarily to employee salary and benefits costs. “When you added the costs of pensions and state workers,” she said, “the costs of running a residential program was much more expensive, and there was no difference in outcomes.”

Cathy Craig-Myers, executive director of the Florida Juvenile Justice Association, said state-operated programs are costlier than privately-managed programs -- with "no difference in outcomes."

In terms of oversight, Craig-Myers said Florida lawmakers passed legislation three years ago that makes juvenile court judges more accountable when sentencing young people, in particular, those that may be sent to residential facilities.

“In 2010, the state of Florida passed a law that if a judge was going to make a commitment decision of a youth that may have been able to be served in the community,” she said, “that he or she would have to put in writing to justify why that judge is making a decision that didn’t necessarily align with the agency.”

Additionally, Craig-Myers said private contractors are often able to leverage resources that state agencies may not, such as Perkins grants and even Medicaid dollars via Behavioral Health Overlay Services.

The DJJ, Myers said, reviews every residential program annually while a contract monitor inspects privatized operators monthly. Additional certification requirements under national and international organizations such as the Commission on the Accreditation of Rehabilitation Facilities (CARF), she said, provide extra layers of oversight for contracted providers.

“There’s actually more accountability than there was in the state system,” she said. “That’s evidenced by some of the programs that have recently closed or been converted to privatized programs.”

A Criticized Practice

Several years ago,  David Utter, director of policy in Florida for the Southern Poverty Law Center, received a SunTrust Equitable Securities document from the late 1990s. The report, given to him by a Florida non-profit provider, contained a “school-to-prison pipeline” diagram. The document, however, was not criticizing the practice; it was encouraging it as a privatized business model.

“When we saw that we were shocked,” he said. “There actually was an investment strategy that was being built around, or sold on, incarcerating children.”

His biggest slight against Florida’s privatized system, he said, is that he believes it allows the political climate within the state to remain static.

“I’ve been working in Tallahassee now since 2009, and it’s pretty amazing how when we started any reforms, how many lobbyists are there, fighting for the status quo, or fighting for growth,” he said.

The political influence of private contractors, Utter said, makes it more difficult, and less likely, the state will shift investments towards community-based programming. Utter said that he had similar experiences working in Louisiana in the late 1990s. “There isn’t much of a distinction,” he said. “The problem here is institutional care for troubled kids. That’s the thing that Florida in particular is addicted to.”

In Louisiana, Utter also said he confronted Youth Services International, when the company was then known as Correctional Services Corporation. However, due to a confidential settlement agreement, Utter is prohibited from discussing his experiences with YSI.

“The  problem is a mindset in Florida that the only way to hold kids accountable is to lock them up,” Utter continued, “even though incarceration is ineffective, expensive and harmful.”

Michele Deitch, a juvenile justice policy expert at the Lyndon B. Johnson School of Public Affairs at the University of Texas and American Bar Association Committee on Independent Correctional Oversight co-chair, said there are two primary reasons why states turn towards the private sector for juvenile justice solutions: the promise of improved performance and cost savings.

“However, with years and years of experience,” she said, “we have not seen the improved performance of the private facilities…and then secondly, in terms of cost savings, all the research has shown the private facilities have not saved the states or the counties any significant money.”

With lawsuits and additional expenditures -- like monitoring costs and increased worker’s compensation payments -- taken into consideration, Deitch said oftentimes, privatized facilities actually wind up costing states more money.

“When you’ve got the private sector involved, they have a vested interest in keeping them full,” she said. “It really runs counter to the whole dynamic of trying to reduce your population of incarcerated youth.”

She said she was also concerned about the level of oversight in contracted programs. “The state or the county has to, in its contracts with  private vendors, assert the right to monitor conditions in the facility and to do regular inspections,” she said. However, many agencies, she added, do not draw up contracts that allow the state to fully inspect such facilities. Similarly many private contractor records remain confidential and inaccessible. “There’s a lot of secrecy about what’s going on behind the walls of these private facilities,” Deitch said. “It’s a very closed environment, and the lack of transparency makes oversight extremely difficult.”

The lack of oversight, she said, may compromise safety, result in inadequately trained personnel and lead to greater staff turnover. Furthermore, Deitch said placing children in programs where they are getting substandard treatment and services is almost certain to increase recidivism rates.

Florida, Deitch said, is going in the “absolute opposite direction of the country” by totally privatizing its residential programs. “I wouldn’t be surprised to see their system challenged in lawsuits and their outcomes are going to be so much worse than the rest of the country,” she predicted.  “Ultimately, I expect that Florida’s going to be spending more money on their juvenile justice system than any other state, because there’s going to be a built-in disincentive to reduce the incarcerated juvenile population.”

Are Delivery Systems Really the Issue? 

“The fundamental question of who should be providing services is not even one we can really answer, because our system has been so big and so overused for so long,” said Deborrah Brodsky, director of the Florida Institute of Government’s Project on Accountable Justice. “For us, the fundamental question is what are we doing as a state to really provide the right services to the right kids?”

Up until recently, she said the state system has had a tendency to over-incarcerate low-level juvenile offenders. “That norm has done a great disservice to not only the kids involved, but the public at large,” she said. “Keeping a kid away from their family for a low level, first time offense is just bad public policy, and we’ve done that far too much, and for far too long.”

The DJJ, Brodsky said, has recently been making strides to alter its residential placement policies, however. “In 2011, we saw some limitations placed on misdemeanants in residential and we saw the expansion of civil citations,” she said. “They’ve closed 1,600 beds over the last two years. That means the decision making has changed.”

Florida’s juvenile justice system is unique, Brodsky said, in that it provides a wide spectrum of services for young offenders. “You have prevention all the way to the reintegration model,” she said. Other states, Brodsky said, may have systems that are more “disparate and discrete” and do not provide such a vast continuum of juvenile offender services.

The size of Florida’s DJJ, Brodsky said, is both advantageous and challenging. “You have 100,000 kids and a lot of different delivery mechanisms across communities,” she said. “But you have one oversight mechanism for the whole system.”

Deborrah Brodsky, director of the Florida Institute of Government's Project on Accountable Justice, said the massive size of the state's DJJ creates both burdens and benefits.

In years past, Brodsky said oversight of both private and public residential facilities in Florida was lacking. “With any outsourced responsibilities, we have a responsibility as the government to insure that the proper accountability mechanisms are in place,” she said. “Did we have them for the publics? Probably not. Did we have them for the privates? Probably not.”

Legislators today, however, are having more conversations about changing structures and policies to improve accountability in the state’s juvenile justice facilities. And instead of focusing on contractor efficiency, Brodsky said there is an emerging emphasis on provider effectiveness.

“Is the contracting sufficient, and are there performance measurements in place to insure to ensure that there’s proper oversight?” she asked. “That’s the question.”

Ultimately, Brodsky said the state’s residential placement problems doesn’t hinge on whether facilities are public or private. Rather, she said Florida’s real issue is anchored around the public’s lack of a demand for what she considered sound juvenile justice policy.

“I don’t think you can disentangle really bad public policies from who the provider was,“ she said. “The expectation is that we lock up a lot of kids. Without a change in that expectation, I don’t care who it is, public or private, you’re still going to have terrible outcomes.”

A Model for Other States?

According to 2011 Office of Juvenile Justice and Delinquency Prevention data, close to 30 percent of the nation’s committed juvenile population were held in privatized residential facilities. As to whether other states will follow Florida’s lead and invest in more privatized juvenile services, analyst opinions were mixed.

“I would think that is possible, however, to avoid failure, other states would need to look at Florida’s ‘lessons learned’ and should incorporate two important elements from Florida’s current reform efforts into a privatized system,” Craig-Myers said.

Successful privatization of services, she said, depends upon an emphasis on youth outcomes and rigorous contract monitoring and compliance. The state DJJ, she said, is strengthening its “holistic approach” toward youth rehabilitation via the integration of things like trauma services, education and mental health counseling while simultaneously honing system tools that “guide absolute accountability” among privatized contracts.

“With those pieces in place,” she said, “a privatized system always works.”

While states may consider privatization as a means of balancing their budgets, ultimately Brodsky believes public safety concerns will deter most states from following Florida’s lead.

“It’s not a better public safety bargain when outcomes lead to increased recidivism, repeat offending, and more victims,” she said. “In the case of juvenile residential facilities it is a public safety imperative that a state make its decisions to contract -- or not -- based on what’s in the best interest of the youth being held.”

Utter said he doesn’t believe privatization is a viable solution to other state’s juvenile justice woes. Regarding youth with serious offenses who must be placed in residential settings, he said he would like to see more state use the “Missouri Model,” stating that the “homelike, deeply therapeutic, deeply educational environment” was more likely to result in the successful rehabilitation of juvenile offenders.

“I think the answer is we need to get these kids out of these institutions and utilize effective community and family-based interventions,” he said.

Deitch said she doubts other states will invest in privatization to the extent that Florida has. “I think the problems that have arisen in the private sector have been garnering so much national attention that most state agencies understand risks of turning over this function,” she said. “They don’t want to take the risks of their youth having their safety compromised and they want to see more effective programs for the youth, which have not been demonstrated by the experience of the private vendors around the country.”

Today, there is a lesser need for residential juvenile facilities in general, she said. With an overall decrease in residential facility reliance, Deitch said it only stands to reason that privatized residential contracts will similarly begin trending downward.

“I don’t see this being a growth opportunity for the private sector,” she concluded. “Quite the contrary, I see the state agencies trying to take back this function so they can do more effective services and treatments.”

Uncommon Journalism, 2013.

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