Advocates Declare Victory After Contract to Privatize Terrell State Hospital Scrapped

After a 9 month battle, a coalition of mental health, labor, and civil rights groups, including Grassroots Leadership, was able to declare victory last week over GEO Care/Correct Care Recovery Solutions' efforts to take over the Terrell State Hospital. This effort was a privatization scheme that was part of the company's expansion ambitions into state hospital and civil commitment centers.  The victory was aided by a large contracting scandal in the state, a damning state audit, and some terrific investigative reporting.

Last week, the State Auditor’s Office released a seething audit of Texas’ Health and Human Service Commission’s (HHSC) attempt to privatize Terrell State Hospital last year.  The audit acknowledges that some procurement processes were indeed followed. Yet, significant breaches to protocol occurred. According to the audit “the Health and Human Services Commission (Commission) did not e

nsure that its decision to tentatively award a contract to GEO Care, LLC to manage selected operations at Terrell State Hospital provided the best value to the State. The Commission and the Department of State Health Services (Department) did not fully comply with the Commission’s contract planning and procurement processes.”

The result of audit included a list of mishaps on the part of HHSC. This included  failure to conduct a preliminary needs assessment and a cost-benefit-analysis, tardy purchase requisitions, and failure to adequately verify the background, qualifications, and experiences of vendors. In addition, there were a number of discrepancies in the bid evaluation process including inconsistencies in scoring, lack of a minimum qualifying score, and failure to receive non-disclosure agreements prior to negotiations.

In 2012, Texas Department of State Health Services attempted to offer a contract with GEO Care to operate the Kerrville State Hospital. In the end, Commissioner Dr. David Lakey rejected GEO Care’s bid to privatize the Kerrville State Hospital on the grounds that savings in the proposal were achieved “primarily through reductions in staffing and benefits to a degree that would put both our patients and the State of Texas at risk.” Even with this conclusion, HHSC chose to move forward with solicitation to privatize Terrell State Hospital in 2014.

While the audit has rendered current attempts to privatize Terrell State Hospital momentarily dead, concerned advocates and stakeholders have called  for legislative authority and increased transparency and oversight prior to future attempts to privatize state hospitals in Texas.

This is a major victory for advocates in Texas, but much more needs to be done to ensure that the private prison industry’s plans to take over our state hospital system are set aside for good.