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California will examine medical staff in state prisons and hospitals. This is why

California will evaluate outsourcing of health care and mental health services in state prisons and hospitals with an audit request that suggests it costs the state up to three times as much to hire medical staff compared to using state employees.

The Joint Legislative Audit Committee’s approval of Assemblyman Josh Lowenthal’s request comes on the heels of Gov. Gavin Newsom’s release of his proposed May revisions to fill a remaining $27.6 billion deficit from the current fiscal year, in which that Newsom called for the elimination of 10,000 vacant state positions. for a savings of $762.5 million for the state.

Lowenthal, D-Long Beach, whose audit request predates the governor’s suggested budget cuts by about two months, notes that medical and mental health staff at the Department of State Hospitals, the California Department of Corrections and Rehabilitation and the Department of Developmental Services, face “unsafe staffing shortages.”

These shortages have led the state to rely on private contractors who, in at least one case described in Lowenthal’s audit request, have cost the state hundreds of millions of dollars.

The state’s reliance on outsourcing care “has reached an alarming point of abuse,” Lowenthal said in his audit request to the Joint Legislative Audit Committee, adding that while the use of private contractors is common, the reliance of California reached an all-time high during the COVID-19 pandemic.

“Unfortunately, even after the state of emergency ended, the utilization of private physicians, psychiatrists, psychiatrists, nurses, licensed clinical social workers and psychiatric technicians persisted, indicating a sustained trend that requires immediate attention and rectification,” the assemblyman in the order.

High unemployment rates

According to the nonpartisan Legislative Analyst’s Office’s 2023 analysis, the average state staff vacancy rate ranged from 10% to 15%, but in recent years, that rate has now increased to about 20%.

The California Association of Psychiatric Technicians, which represents care providers within the Department of State Hospitals, has 1,300 of its 4,300 budgeted positions vacant, a vacancy rate of 30%. At some Department of Corrections and Rehabilitation facilities, the vacancy rate is as high as 45%, Lowenthal noted among the examples she cited in the audit request.

“In particular, in numerous state hospitals and prisons, psychiatrists and social workers face unemployment rates reaching 80%-90%,” the assemblyman wrote.

Employee unions expressed support for the audit.

“This rigorous examination underscores the paramount importance of fiscal responsibility to the state and its taxpayers, particularly when budget savings are needed to address the state’s current budget deficit,” the California Association of Psychiatric Technicians said in a news release.

Actual costs of contract work unknown

In 1995, a federal court found that the California Department of Corrections and Rehabilitation “failed to provide adequate mental health care and concluded that its mental health staff were “dangerously overstretched,” Lowenthal said.

In 2023, California was fined $50 million after the court determined that the state had not corrected its current staffing shortages, the assemblyman wrote.

To fill vacancy gaps, Lowenthal said, the state relied on outsourcing work traditionally performed by staff for up to three times the rate paid to civil service employees.

“This widespread outsourcing has continued for so long that the size and true costs of this hidden workforce are now unknown and have multiplied beyond any intention of the Legislature,” the assemblyman said.

Lowenthal cited a three-year contract with a California Department of Corrections and Rehabilitation vendor worth $425 million. The state appears to have paid an average of $120 million a year over the past decade for services provided by the company, totaling nearly $1.2 billion over that period, the audit letter states.

The assemblyman was not immediately available for comment Monday, but his office said it hopes that, among other clarifications, the audit will show precisely what services were provided.