Humpday Hall of Shame: Texas Department of State Health Services plan to privatize Terrell State Hospital

Allies across the state were hoping Texas’ attempts to privatize state hospitals ended in 2012 when Department of State Health Services Commissioner Lakey rejected GEO Group’s bid to take over Kerrville State Hospital. We celebrated that victory in a previous blog post, but now, two years later, DSHS has issued a Request for Proposals for operation of Terrell State Hospital. DSHS plans to award a five-year contract as soon as August 15, 2014.

The RFP raises concerns for various reasons, but most notably because it indicates that eligible applicants “must be an entity with at least three years’ experience operating a Joint Commission-accredited psychiatric inpatient facility and demonstrate the financial strength to operate a large psychiatric hospital.” These requirements narrow the applicant pool considerably, leaving the bidding to only a few large companies, including the for-profit private prison corporation GEO Group, which has a sordid history delivering mental health services in Texas facilities.

The state created a similar situation in 2012 when they released an RFP to privatize Kerrville State Hospital. The sole bidder then was GEO Group, whose application promised a 10% cost savings due mostly to an unsafe reduction in staffing. Grassroots Leadership brought together a group of “influential organizations” to ask the state to reject the bid. Grassroots Leadership opposes the privatization of any state hospital because it compromises the public’s ability to monitor and regulate what happens inside. States should not relinquish the ability to regulate standards to ensure and monitor care and safety.

<--break->Ultimately, Commissioner Lakey rejected GEO Group’s bid on the basis that the proposed cost savings would be achieved by staffing cuts “to a degree that would put both our patients and the State of Texas at risk.” Representative Harvey Hilderbran also opposed the proposal, stating in a 2012 interview with the Austin-American Statesman that, “privatizing Kerrville State Hospital would have likely resulted in a serious decline in both patient care and jobs for the area.” What’s hard to believe is that yet again, DSHS is requesting that applicants submit proposals below the historic bed-day operating costs for Terrell State Hospital.

The motivation behind the RFP is yet unclear, but mental health advocates are calling for transparency in DSHS’ decision process. “The state provided no information about this RFP to advocate and consumer stakeholders,” according to Gyl Switzer, Public Policy Director for Mental Health America of Texas.

Advocates agree that privatizing Terrell State Hospital is an unwise use of public resources. Terri Burke, the Executive Director of the ACLU of Texas stated, "We are concerned that the private operation of Terrell State Hospital will lead to substandard care with less public oversight, putting taxpayers at greater risk. For these reasons, we oppose the privatization of Terrell State Hospital."

Grassroots Leadership is particularly concerned about the prospect that the facility could be turned over to a for-profit company.  “States should not relinquish the ability to regulate standards so as to ensure and monitor care and safety,” said Bob Libal, Executive Director of Grassroots Leadership. “DSHS certainly should not turn control of the state hospital over to a for-profit prison corporation like GEO Group.”


This privatization will directly affect my family in many ways. Is there anything that the public can do to oppose the DSHS request to privatize? I have written letters to our State Rep. & State Lt. Governor!