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Alaska looks into privatizing some health and juvenile justice services

  • Author: Annie Zak
  • Updated: May 26, 2016
  • Published May 26, 2016

As part of a broad health care bill passed by the Alaska Legislature this year, the state is looking at the feasibility of privatizing some of its health and juvenile justice services.

The Alaska Department of Health and Social Services on Wednesday put out requests for proposals for studies that would examine privatization of services at the Alaska Psychiatric Institute, four Division of Juvenile Justice facilities across the state, and the pharmacy program at Alaska Pioneer Homes.

All of the feasibility studies call for an examination of what would be the best value for Alaska, while also meeting needs for people who use those services.

For API, some of the options include contracting a for-profit or nonprofit entity to take over management and operations; forming a public corporation to operate the hospital; keep it under state ownership and look for new revenue streams; or keep it under state ownership and contract out for certain services.

API is the only public psychiatric hospital in the state. It is frequently full and recently didn't have enough doctors to evaluate patients.

The state is also looking at potential options to privatize four short-term juvenile detention facilities in Nome, Ketchikan, Kenai and Palmer. The state is asking whoever performs the feasibility study also analyze the possibility of converting one or more of the facilities to offer nonsecure residential mental health and/or substance abuse treatment services.

The goal is to determine which options "would provide the best value" to the state while also meeting the needs of youth in such facilities, the RFP says.

The feasibility study for the juvenile detention centers will explore what a sale to a for-profit, nonprofit, tribal organization or local government would look like. Other options might be for the state to keep controlling the centers and contract with another party to operate them, keep operations basically as they are, or close the facilities.

In addition to those four facilities, the state also has four centers that provide long-term juvenile detention and treatment services.

Both the detention centers and API would still be subject to state oversight, according to the RFPs.

Alaska Pioneer Homes, which provide assisted living care and pharmaceutical services to people 65 and older, is a state-run program that is "serving a greater proportion of high acuity residents than in the past, as prospective residents have been staying in their own homes as long as possible," the RFP said.

There are six of these homes in the state — in Anchorage, Juneau, Fairbanks, Ketchikan, Palmer and Sitka — and they provide care for about 400 people. While the pharmacy itself is at the Anchorage location, it serves all six facilities.

The state wants an outside contractor to look at the costs and income of the current pharmacy program, as well as the needs of the program (like pharmacist consultations, or managing medication), to find out what the best option is to privatize it.

These studies come amid a fiscal crisis for Alaska, with a state budget deficit topping $4 billion.

Senate Bill 74, passed in April, required the state to contract out these feasibility studies. Other pieces of the bill pertain to Medicaid reform.

DHSS estimates a budget of $185,000 for the API study, $250,000 for the juvenile justice facility study and $100,000 for the study about pharmacy services delivered at Pioneer Homes.

The results of the studies are due to the Legislature by Jan. 27.

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