Opening of the National Institute of Corrections (NIC) public hearing, Balancing Fiscal Challenges, Performance-Based Budgeting, and Public Safety, in Washington, DC began with a welcome from Advisory Board Chair, Diane Williams, President and CEO of the Safer Foundation. Following the welcome, both Charles Samuels, Director, Federal Bureau of Prisons, and Morris Thigpen, NIC Director, made introductory remarks.  Director Samuels spoke of the Bureau’s commitment to both public safety and reduced recidivism.  He cited reducing costs as a key goal for corrections and cited statistics on current costs of corrections.  Director Thigpen focused on “why this hearing now”, noting concerns on how rapidly corrections costs are increasing; this was also reinforced at a recent senate judiciary hearing on the topic.  Max Williams, Advisory Board member and President and CEO of the Oregon Community Foundation, then kicked-off two days of anticipated, informative panel sessions on the topic of cost containment.

Highlights from the Thursday afternoon panel sessions include: (most recent sessions shown first)

Panel 7: Opportunity versus Obligations

Panelists: Madeline “Mimi” Carter, Principal, The Center for Effective Public Policy; Sandra Matheson, Director, State Office of Victim/Witness Assistance; Mindy Tarlow, Chief Executive Officer, Center for Employment Opportunities

Ms. Carter provided an overview of NIC’s Evidence-Based Decision Making (EBDM) initiative, detailing each of three phases of the program.  Phase 1 included tasks, such as conducting a national public opinion survey and outlining a conceptual framework for the project. Phase 2 consisted of selecting seven EBDM jurisdictions and developing tools and resources for the EBDM sites. Each of the EBDM sites created a team to work on the initiative, including a broad representation of 10-12 members from the county, from the chief judge to city manager to jail administrator. Phase 3 is ongoing and the jurisdictions are implementing their change strategies.  She also provided background on the BJA-sponsored Justice Reinvestment Initiative, which involves five of the seven EBDM sites.

Ms. Matheson reviewed the statewide victim services in New Hampshire.  One example of these services is SAVIN, an automated victim information and notification system.  Participants in SAVIN stated the program provides feedback, helps with safety concerns, and helps them prepare for events as a victim.  Although resources are limited, success of the program is assisted by partnerships with prosecution and crisis center advocates.

Ms. Tarlow discussed the evidence-based research on how the “right” services, person, and time allow offender employment to result in lowering recidivism. She focused on a specific example study from 2004, a three year evaluation with the U.S. Department of Health and Human Services, which saw employment for high-risk offenders resulting in a significant reduction in crime. For the full study group at the Center for Employment Opportunities (CEO), the result was a 2 to 1 cost savings.  The study showed the importance of timing, where results improved to 3 to 1 cost savings, if offenders are placed in jobs as close to release as possible.

Q&A: What were the jail savings from the CEO study?  Response: the impact on jails in the CEO study was actually higher than the impact on prison.

Will the changes currently being driven by budget cuts last? Response: all the panelists agreed that systems improvements will stay in place, even when economics change.

Panel 8: Capability and Capacity: Understanding NIC’s Delivery of Services

Panelist: Jim Cosby, Chief, Community Services Division, National Institute of Corrections

Mr. Cosby began his presentation by reviewing areas of emphasis identified by the Advisory Board. He reviewed the service delivery methods at NIC focusing on the business model, which includes such services as technical assistance and cooperative agreements.  Key statistics on NIC programs were provided, such as 382 technical assistance requests in FY 10 & 11.  He also listed two areas for future opportunities at NIC: use of technology and implementation practices/methods.

Highlights from the Thursday morning panel sessions include:

Panel 5: Budgetary Approaches to Providing Services for Offender Health Care

Panelists: Dr. Newton Kendig, Assistant Director, Health Services Division, Federal Bureau of Prisons; Dr. Jim Degroot, Mental Health Director, Georgia Department of Corrections; Joseph Ponte, Commissioner, Maine Department of Corrections; J. John Ashe, Superintendent, Hampden County Correctional Center

Dr. Kendig reported on the health care costs of the Bureau of Prisons, with a total cost of $959 million for 2011. Talking about cost containment, he outlined several strategies: one example, using a medical classification system for facilities (level 1 to level 4) to match inmates’ health care needs to the care level of the facility or community. Advances in medicine are transforming inmate patient care, which results in the ability to provide improved care, but also increased costs that come with advanced technology.

Dr. Degroot discussed another type of “big squeeze” in public health care noting the conflict between the public’s desire for universal health care vs. the limitation of fiscal constraints.  In FY 2011, Georgia conducted a study on correctional health care and the study revealed that health care accounted for 17% of the agency’s budget, slightly lower than neighboring states.  He reviewed four direct cost drivers for mental health care: staffing (a critical shortage of providers drives up salaries), pharmaceuticals, hospital care, and mental health expansion.  He also reviewed indirect cost drivers: criminalization of mentally ill offenders, gangs, PREA (70% of victims receiving mental health services), stigma (male inmates uncomfortable with accessing mental health services), and staff turnover or burnout.  Dr. Degroot closed his comments by highlighting the increasing costs of care required by a growing geriatric inmate population.

Mr. Ponte began by reviewing the improvements in correctional medical care costs in Maine, which moved from almost one million dollars in debt in FY 2010 to a $700,000 surplus at the end FY 2012.  The Maine DOC made these improvements working closely with their medical vendor to identify how Maine operated differently from similarly sized states with lower costs.  Care was taken to insure that while costs were decreased, correctional medical care was aligned with the “community standard of care”.

Mr. Ashe discussed the Hampden County public health model for jails, which contains five main elements: early detection and assessment, prompt treatment at a community standard of care, focus on disease prevention, comprehensive health education, continuity of care (release planning from the first day).  Importantly, the model also includes an assignment of the correctional health care team by zip code, so the continuity of care continues into the community.  He also noted that even though the jail population is predominately young, over 20% have chronic diseases.

Q&A: What kind of health care services would you “not” cover?  Response: For pretrial inmates, we would not provide elective care.  Extraordinary care is also excluded because it requires a multi-disciplinary committee, an example would be organ transplants.

What is tele-mental health?  Response: Remote counseling by a degree-level mental health worker.  Average about 1300 contacts per month in Georgia.

Panel 6: Innovative Cost-Saving Strategies

Panelists: Captain A. Martin Johnston, Chief Pharmacy Logistics Support, Federal Bureau of Prisons; Bernard Warner, Secretary, Washington State Department of Corrections; Gary VanLandingham, Director, Results First Pew Center on the States; Ashleigh Holand, Pew Center on the States

Captain Johnston provided statistics on pharmaceutical expenditures, at $320 billion for the U.S. and $67 million for the BOP in 2011.  He explained the triad of pharmaceutical expenditures consisting of advanced pharmacy practice, formulary management, and drug pricing.  Details were provided on the complexity of drug pricing and the challenges that come from differences between agencies in pay rates and procurement practices.  Potential drug pricing reduction strategies include buying groups and evidence-based decisions for formulary management.

Mr. Warner started with a review of the Washington Institute of Public Policy (WSIPP): an organization performing meta-analyses of existing research and providing a cost benefit comparison for making evidence-based decisions.  He provided details on several Washington State sentencing alternatives, all with significant savings per offender.  He showed trends in recidivism rates from 1990-2006, showing declines in recidivism for moderate to high risk populations.  He reviewed the Seattle pilot of the HOPE model, with swift & certain sanctions, showing supervision compliance significantly increased and positive drug tests decreased.  The pilot resulted in a savings of almost $40 million in jail costs.

Mr. VanLandingham outlined the “Results First” project: targeting criminal justice resources at programs that work.  The approach for the project is a cost-benefit analysis, both looking at individual programs and a portfolio of programs to get the best mix.  He provided an example from the Washington State Functional Family Therapy program, citing cost savings from reduced crime, increased high school graduation, and reduced health care costs.  In this particular example, the program resulted in $11.86 of costs savings per dollar invested.

Ms. Holand, also working on the “Results First” project, discussed how the model used in Results First is being provided to different states.  She focused on work happening in 12 states, outlining New Mexico (reporting gaps for community-based programs) and Iowa (modeling mandatory minimum sentencing).

Q&A: What percentage of pharmaceuticals are brand name?  Response: An estimate is 30%.

What was the population for the pilot HOPE model?  Response: the population is mostly probation (~60%).

What is Results First model doing for counties?  Response: Currently, the main focus is states, but there is early work going on in California.

Highlights from the Wednesday afternoon panel sessions include:

Panel 3: Cost-Effective Strategies for Meeting Policy Requirements and Legislative Mandates

Panelists: Franklin Amanat, Esq., Supervisory Assistant United States Attorney and Deputy Chief, Civil Division, U.S. Attorney’s Office Eastern District of New York; Gary Mohr, Director, Ohio Department of Rehabilitation and Correction

Mr. Amanat, a principal author, gave an overview of the creation and contents of the recently released Prison Rape Elimination Act (PREA) standards. He provided data on the expected costs of the PREA standards, approximately $468.5M/yr., or approximately 0.06% of the total corrections budget [based on 2008 numbers]. He also noted correctional agencies should be able to comply with the new standards at minimal cost by leveraging existing practices and training, providing specific examples.

Mr. Mohr told a “story” of the last 20 months in Ohio; addressing both budget cuts and safety in and out of prison.  He spoke of the vision to reduce crime/reduce recidivism in Ohio by “blurring the lines from prison to community” and looking at the partnership between public and private organizations.  In addition, the legislature in Ohio passed law diverting 1st time, non-violent offenders from prison, along with other sentencing changes.  One result of system reform in Ohio is a recidivism rate of 31.2%, a record low.

Q&A: The one PREA standard that needs to have further work is audit – how will it proceed?  Response: There is additional work to be done in the coming months and a committee/working group will be developing an audit instrument as well as policies and procedures to certify auditors.

Panel 4: Reengineering Population Management

Panelists: Michael Jacobson, President and Director, Vera Institute; Dr. James Austin, President, JFA Institute; Ed Monahan, Public Advocate, Kentucky Department of Public Advocacy; Stan Hilkey, Sheriff, Mesa County Sheriff’s Department

Mr. Jacobson started his testimony by discussing the “sobering” statistics of state fiscal issues, requiring significant reductions in corrections budgets. He reinforced that corrections leaders need to have a cost benefit analysis as support when bringing proposed changes to legislatures.

Looking at the future of corrections populations, Dr. Austin discussed methods for predicting population levels.  One statistic he shared: the crime rate today is the same as it was in 1960.  He emphasized the “length of stay” as critical in impacting predicting populations, with increases in the average “time served” in both prison and parole since 1993.  He also specifically addressed the situation in California, with shifting populations between the state and local jurisdictions.

Mr. Monahan presented on the Kentucky experience with changes in pretrial release.  Key components of legislation on pretrial release: 1) some minor crimes are now “non-arrestable” 2) upgraded risk assessment using evidence-based practices 3) district judges required to consider pretrial risk assessment 4) makes mandatory “own recognizance” for low risk to flee 5) bail credit provision for each day served.  As a result of changes, the pretrial release rate is at 70% across the state compare to 65% prior, which reflects approximately $14 million in savings over the last year.

Mr. Hilkey spoke on NIC’s Evidence Based Decision Making project in Mesa County. He discussed a pretrial proxy (an initial assessment tool used to triage defendants) being used to create standards for risk assessment decisions. In addition, Mesa County is involved with partners to implement a comprehensive pretrial assessment tool.  He noted reductions in jail detainees, and increases in the following of the risk assessment by judges.

Highlights from the Wednesday morning panel sessions include:

Panel 1: Briefing on the Fiscal Costs of Corrections in the United States

Panelists: Dr. Reginald Wilkinson, President, Ohio College Access Network; Dr. Mary Livers, Deputy Secretary, Louisiana Office of Juvenile Justice; James A. Gondles, Executive Director, American Correctional Association; Adam Gelb, Director, Public Safety Performance Project, Pew Center on the States.

Dr. Wilkinson opened the first panel, noting the current challenge of managing costs is not unique to corrections, but persists in many areas of government, using education as an example.  He proposed that what we are missing is the “science of managing” budgets and this hearing can help look at gaps, solutions, and find practical applications.  He emphasized that any positive change needs to use participatory leadership, including executive level, middle management, and line staff. 

Dr. Livers provided insights from her personal experience dealing with a 25% decrease in her budget over four years and 22% decrease in staffing level.  She focused on the impact on staff from personnel cuts, with personnel being the major part of budgets.  She mentioned that policy changes are happening in some jurisdictions, but reform is often slow to be implemented.

Covering trends in international corrections, Mr. Gondles cited statistics from Europe, Canada, Asia, and Mexico.  Specific points of note: Germany uses fines to punish 71% of offenders, France has increased the use of minimum sentences and the result is an increased prison population, and Japan has a significantly rising population of older inmates due to an aging population.

Mr. Gelb gave an overview of the growing costs of corrections in the U.S.  He focused on five key points: corrections costs have exploded, total cost is higher than meets the eye, public safety payoff is low, longer time served is a major growth driver, and policy makers and the public want a better return on investment.  One telling statistic: “one day in prison costs more then 23 days on probation”.  From public opinion polls, results showed “voters strongly support reducing prison time for low-risk, non-violent offenders”.

Q&A: A comment was made that it is easy to talk about costs and sentencing reforms and also incredibly challenging for administrators.  Panelists acknowledged the point and commented on the reality that all areas are susceptible to cuts, but policies and programs are being developed to address the net costs throughout the system.

Panel 2: Outcome-based Budgeting: Process and Practice

Panelists: Chris Innes, Chief, Research and Information Service, NIC; Karen Wilson, Partner, PricewaterhouseCoopers; Brian Sigritz, Director of State Fiscal Services, National Association of State Budget Officers; and Theresa Lantz, Consultant, Retired Commissioner of Connecticut DOC.

Mr. Innes began his presentation describing the current situation in corrections as the “big squeeze”, reflecting the situation of population pressures, budget constraints and political polarization.  He provided a background of historical trends for correctional budgets and populations. In addition, he covered results of NIC’s Cost Containment survey from 2011, noting specific areas where correctional agencies reported cost cutting.  On example: 90% of respondents tried to contain costs in the area of staffing during the last year.

Mr. Sigritz focused on overall state budgets and expenditures, as well as corrections-specific financials.  Of note, state revenues are now above the 2008 low, but spending has not increased overall as state leaders remain cautionary on spending.  For corrections specifically, as recently as mid-year 2012, eight states cut corrections budgets.

Leading a discussion of fixed vs. discretionary costs, Ms. Wilson covered principles of cost reduction and a framework for addressing them.  The framework consists of two key principles: “understanding costs and their behaviors” and “risk”.  The goal of the framework is to structurally reduce costs—reductions that would sustain into the future.

Ms. Lantz covered the “processes” necessary to make cost containment initiatives succeed.  She focused on four objectives for cost containment: transformational leadership, a systems-approach to making decisions, implementation, and sustainability.  Models for enabling the process were discussed, such as the Cost Containment Framework and APEX (Achieving Performance Excellence) Model.

Q&A: Is there a place (a state) that has taken a cost containment initiative to implementation?  The answer noted that pilot projects on performance-based budgeting are happening, and though results are coming in, they are not to the level of complete implementation.  The discussion continued on how changes, such as moving from 8 to 12 hour shifts or vice versa, affect culture.

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Following the completion of the Hearings, presentations will be available on NIC’s website.

For more information: Cost Containment – NIC’s Cost Containment in Corrections; Hearings – Advisory Board Hearings

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