Private company hired to run Alaska Psychiatric Institute has a mixed record

On Feb. 8, Alaska handed over management of the distressed Alaska Psychiatric Institute to a company, Wellpath Recovery Solutions, with a no-bid contract.

The move put Alaska’s most severely mentally ill adults and adolescents involuntarily committed into treatment at the state’s only psychiatric hospital in the hands of a private company for the first time.

At the center of it is a Nashville, Tennessee-based private equity firm-owned company that makes revenues of $1.5 billion per year running mental institutions and lockups for sex offenders across the United States.

The name Wellpath is new, but the company is not.

In various iterations, Wellpath’s predecessor Correct Care Solutions has operated in the private prison and incarceration services business for more than 20 years.

In that time, the company has accumulated a decidedly mixed record.

Most recently, Wellpath is credited for bringing humane conditions to an infamous Massachusetts psychiatric hospital. But in past years, deaths and disturbing conditions have been reported at some of its other properties. And some critics say for-profit psychiatric hospitals lead to cost cutting that hurts patients and profits off their illness.

"Not only are they profiting off someone’s loss of freedom, they are in control of their freedom,” said Bianca Tyler, the executive director of the Corrections Accountability Project, an advocacy group that works against commercial interests in incarceration.

Evolution of a company — and a rebrand

As budgets for governments charged with operating prisons and psychiatric hospitals have declined, states have increasingly turned to private companies to provide services ranging from medical care to food to phones.

[Earlier coverage: State paying private consultants $1 million a month to pull API from brink of regulatory disaster]

Companies like the GEO Group started first with prison services but then sensed an opening, beginning in the late 1990s, to operate troubled state-run psychiatric hospitals with the promise of better management for less money.

Wellpath’s precursor, Correct Care Solutions, was founded in Florida in 2003. In 2014, the company acquired GEO Care, a slice of the private prisons giant GEO Group, as the company sought to divest some of its businesses. It also bought several other smaller prison health care companies along the way.

Last year, Correct Care Solutions merged with another regional company providing incarceration medical care, Correctional Medical Group Companies. In late 2018, it re-branded as “Wellpath.”

Today the company operates 12 involuntary commitment centers and hospitals and sex offender treatment programs around the country and in Australia, with more contracts pending.

It is owned by H.I.G. Capital, a major private equity fund.

Private equity funds basically buy companies, add value and then sell them again -- the corporate equivalent of house flipping, said Bianca Tyler, executive director of the Corrections Accountability Project. They make a lot of money for investors, which typically include both private individuals and pension funds. The pressure to turn big profits is high.

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In recent years, private equity funds have invested heavily in the private prison and detention services industry. Other companies owned by private equity firms include the prison phone giant Securus and Corizon health, another major correctional health care company.

Correct Care Solutions says it changed its name to Wellpath because it better describes its work. But re-branding might have been a convenient way to leave some of the accumulated bad press behind.

“It’s part a trend we see in companies that engage in correctional work,” said Alex Friedmann of the Human Rights Defense Center, a Florida nonprofit. “It’s a way of re-branding yourself and distancing yourself.”

The “old names are associated with bad things,” he said. “If you Google Correct Care Solutions, you’re going to find deaths, lawsuits, employees arrested for misconduct,” Friedmann said.

Successes, and troubles, at other Wellpath facilities

One of Wellpath’s most recent projects, Bridgewater Hospital in Massachusetts, has been heralded as a success in glowing media coverage.

One Boston Globe headline about the new management: “Humane care given a place at the state’s harshest hospital.”

Under Wellpath management, the use of restraints and seclusion for patients has been “virtually eliminated,” according to the company.

[Earlier coverage: Federal investigators found more ‘substantial deficiencies’ at API than at any other US hospital last year]

It’s a marked difference, said Elizabeth Matos of Prisoners’ Legal Services of Massachusetts. Matos praised Dr. Kevin Huckshorn, who was charged with making changes at Bridgewater for Wellpath and who is a key member of the company’s effort at API.

“But I would never say Wellpath holistically is doing a great job everywhere,” she said. “It’s not.”

Wellpath cites the 341-bed psychiatric facility South Florida State Hospital as one of its biggest success stories.

The company and its precursors take credit for managing the facility since 1998, when it became one of the first privately run state psychiatric hospitals in the nation. The company -- then under GEO Group -- built a new state-of-the-art facility and reduced the length of stay for patients, among other improvements. (Management was later handled by GEO Care, which was then folded in to Correct Care Solutions.)

But in 2012 a spate of patient deaths drew the attention of Florida regulators.

At South Florida State alone, there were gruesome deaths, including a heavily medicated psychotic patient who died in a bath so scalding that his skin sloughed off in 2011. Company officials didn’t properly report the death to the state, an investigation found.

In 2012, “doctors told their bosses ... that patients didn’t have enough food to eat and were picking through trash cans for their meals,” according to a Pulitzer Prize-winning 2015 investigation by Florida newspapers the Tampa Bay Times and the Sarasota Herald-Tribune.

At the same hospital, staffers were charged for beating a mentally ill patient in 2014.

“Wellpath is proud of our record at South Florida State Hospital,” Jeremy Barr, Wellpath’s senior vice president, said in an email.

He pointed out that South Florida State Hospital has never been in jeopardy of losing certification from the Centers for Medicare and Medicaid Services (which API currently is) and has received awards for quality by The Joint Commission, a hospital accrediting organization.

Another hospital managed by the company, Treasure Coast Forensic Treatment Center, saw patients killed and staff maimed and was fined $700,000 by the state of Florida for not having the minimum number of employees required by its contract, according to an investigation by Treasure Coast Newspapers.

Correct Care has gotten into trouble elsewhere, too: A doctor in Michigan contracted by the company was arrested for sexually touching inmates.

The company has also been a major target of lawsuits.

In just over a decade, Correct Care Solutions was sued 1,400 times in federal court, according to the Project on Government Oversight. Many of the cases were filed directly by inmates not represented by lawyers, and were dismissed, Barr told Alaska lawmakers at a legislative hearing Wednesday.

It has also been the target of allegations of substandard care at immigrant detention centers where it works.

Wellpath Recovery Solutions has sought to distance itself from Correct Care Solutions, saying that it is a separate arm of the company that exclusively manages behavioral health facilities.

‘Financially incentivized’

Some people argue that introducing a profit motive to psychiatric care for involuntarily committed patients can only lead to worse care for patients.

“These companies are financially incentivized to keep people there, and that’s what you see happen,” said Tyler, of the Corrections Accountability Project. “You see people not going home or moving on from these facilities.”

There’s another layer of concern about private companies running psychiatric hospitals, Tyler said: Unlike inmates serving defined sentences, psychiatric patients are released on the orders of the hospital.

Wellpath said that its contract terms “provide no financial or other incentive to increase the duration of patient hospitalization” and that its goal is to see patients recover and return to their communities.

Another common criticism is that private prison operators only have an incentive to cut costs in order to maximize profits. Friedmann of the Human Rights Defense Center said that private prison operators are often criticized for not training or paying staff enough -- dangerous in volatile, violent environments like psychiatric hospitals.

“In order to generate profit you reduce expenses,” he said. “They do that in ways that harm patients.”

At two legislative hearings Wednesday, officials justified hiring Wellpath by pointing out that years of other approaches, including numerous studies and changes in leadership, have only led to a place of extreme dysfunction at API.

“What we have been doing has not worked,” said Wall.