Bureau of Prisons:

Better Planning and Evaluation Needed to Understand and Control Rising Inmate Health Care Costs

GAO-17-379: Published: Jun 29, 2017. Publicly Released: Jul 31, 2017.

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Gretta L. Goodwin
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goodwing@gao.gov

 

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What GAO Found

From fiscal years 2009 through 2016, the Bureau of Prisons (BOP) obligated more than $9 billion for the provision of inmate health care and several factors affected these costs. Obligations for health care rose from $978 million in fiscal year 2009 to $1.34 billion in fiscal year 2016, an increase of about 37 percent. On a per capita basis, and adjusting for inflation, health care obligations rose from $6,334 in fiscal year 2009 to $8,602 in fiscal year 2016, an increase of about 36 percent. BOP cited an aging inmate population, rising pharmaceutical prices, and increasing costs of outside medical services as factors that accounted for its overall costs.

Bureau of Prisons (BOP) Institution Obligations for Inmate Health Care, Including Psychological Care, and Inflation Adjusted Per Capita Obligations from Fiscal Years 2009 through 2016

Fiscal year

 

2009

2010

2011

2012

2013

2014

2015

2016

Total health care obligations (millions)

$978

$1,035

$1,081

$1,122

$1,200

$1,243

$1,299

$1,344

Per capita obligations (2016 dollars)

$6,334

$6,495

$6,485

$6,627

$6,998

$7,350

$7,958

$8,602

Source: GAO analysis of BOP data. GAO-17-379

BOP lacks or does not analyze certain health care data necessary to understand and control its costs. For example, while BOP's data can show how much BOP is spending overall on health care provided inside and outside an institution, BOP lacks utilization data, which is data that shows how much it is spending on individual inmate's health care or how much it is expending on a particular health care service. BOP has identified potential solutions for gathering utilization data, but has not conducted a cost-effectiveness analysis of these solutions to identify the most effective solution. BOP also does not analyze health care spending data, i.e., what its institutions are buying, from whom, and how much they spend. BOP has pursued some opportunities to control its health care spending through interagency collaboration and national contracts, but it has not conducted a spend analysis to better understand trends. Doing so would provide BOP with better information to acquire goods and services more strategically.

BOP has initiatives aimed to control health care costs but could better assess effectiveness and apply a sound planning approach. Since 2009, BOP has implemented or planned a number of initiatives related to health care cost control, but has not evaluated their cost-effectiveness. Further, BOP has engaged in a strategic planning process to help control costs, but has not incorporated certain elements of a sound planning approach, such as developing a means to measure progress toward its objectives and identifying the resources and investments needed for its initiatives. By incorporating these elements, BOP could enhance its planning and implementation efforts before expending resources, better positioning itself for success as it aims to control health care costs.

Why GAO Did This Study

As of June 2017, BOP was responsible for the custody and care—including health care—of about 154,000 inmates housed in BOP institutions. Health care includes medical, dental, and psychological treatment. BOP provides most care inside its institutions, but transports inmates outside when circumstances warrant. GAO was asked to review health care costs at BOP institutions.

This report addresses: (1) BOP's costs to provide health care services and factors that affect costs; (2) the extent to which BOP has data to help control health care costs; and (3) the extent to which BOP has planned and implemented cost control efforts.

GAO analyzed BOP health care obligations data for fiscal years 2009 through 2016, gathered information on BOP's health care cost control initiatives through a data collection instrument, and reviewed BOP's health care related strategic plans. GAO also interviewed BOP officials and visited 10 BOP institutions, selected in part, for total and per capita medical services costs.

What GAO Recommends

GAO is making five recommendations, including that BOP conduct a cost-effectiveness analysis to identify the most effective method to collect health care utilization data; conduct a spend analysis of health care spending data; evaluate cost control initiatives; and enhance its planning efforts by incorporating elements of a sound planning approach. BOP concurred with the recommendations.

For more information, contact Gretta L. Goodwin at (202) 512-8777 or goodwing@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: BOP agreed with GAO's June 2017 recommendation and has begun to take steps to address it. As of August 2018, BOP had selected an external group of public administration experts with whom to contract in order for this group to study and analyze health care cost-effectiveness. The group will also recommend the most effective method for BOP to collect health care utilization data. BOP expected the contract with this group to start in September 2018 and to last for 1 year. This action is a positive step that could help BOP find a method to collect health care utilization data. However, BOP is in the early stages of implementing this action; thus, it is too soon to assess if BOP will find the most effective method for collecting health care utilization data.

    Recommendation: To better understand the available opportunities for collecting inmate health care utilization data, BOP should conduct a cost-effectiveness analysis of potential solutions, and take steps toward implementation of the most effective solution.

    Agency Affected: Department of Justice: Bureau of Prisons

  2. Status: Open

    Comments: BOP agreed with GAO's June 2017 recommendation and has begun to take steps to address it. As of August 2018, BOP had selected an external group of public administration experts with whom to contract in order for this group to recommend a cost accounting model that BOP could implement to conduct spend analyses. BOP expected the contract with this group to start in September 2018 and to last for 1 year. This action is a positive step that could help BOP find a method to conduct spend analyses. However, BOP is in the early stages of implementing this action; thus, it is too soon to assess if BOP will find the most effective method for conducting spend analyses.

    Recommendation: To better understand the available opportunities for controlling health care costs, BOP should implement its guidance to conduct "spend analyses" of BOP's health care spending, using data sources already available

    Agency Affected: Department of Justice: Bureau of Prisons

  3. Status: Open

    Comments: BOP agreed with and has begun to take steps to address this action, as recommended by GAO in its June 2017 report. As of August 2018, BOP had selected an external group of public administration experts with whom to contract in order for this group to review initiatives and make recommendations on future tracking of health care costs and evaluation of cost control initiatives. BOP expected the contract to start September 2018 and to last for one year. This action is a positive step that could help BOP evaluate the effectiveness of its health care cost control initiatives. However, BOP is in the early stages of implementing this action, thus, it is too soon to assess if BOP will find the most effective method for evaluating its health care cost control initiatives.

    Recommendation: To determine the actual or likely effectiveness of its ongoing or planned health care cost control initiatives, BOP should evaluate the extent to which its initiatives achieve their cost control aim.

    Agency Affected: Department of Justice: Bureau of Prisons

  4. Status: Open

    Comments: In September 2017, BOP stated that it had taken steps to contract with a health care finance expert to develop target performance metrics along with a cost accounting model to guide the measurement of its health care cost control efforts. The expert will work with BOP staff once a contract is awarded. BOP did not provide any timeframes for when it expects to award the contract.

    Recommendation: To enhance its strategic planning for and implementation of health care cost control efforts, BOP should incorporate elements of a sound planning approach and (1) establish a means of measuring progress toward and effectiveness of its activities for its current strategic objectives and goals related to controlling health care costs; and (2) identify the resources and investments necessary for implementation of its planned health care cost control initiatives.

    Agency Affected: Department of Justice: Bureau of Prisons

  5. Status: Open

    Comments: In September 2017, BOP stated that it will develop and implement a template to document its Federal Medical Center mission and costa analyses. BOP did not provide any timeframes for when it expects to complete this.

    Recommendation: To improve the reliability and utility of its Federal Medical Center mission analyses, BOP should document the analyses and findings that underlie its recommendations.

    Agency Affected: Department of Justice: Bureau of Prisons

 

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