IT'S NO SECRET Multnomah County is strapped for cash. County Chair Ted Wheeler was even moved to quote former President of Czechoslovakia Václav Havel in the introduction to the county's 2010 budget.

"Hope is a state of mind, not of the world," wrote Wheeler, cutting $46 million out of the $1.2 billion budget because of the recession. Of those cuts, the sheriff's office took a $1.8 million hit, losing 26 positions and negotiating a wage freeze for some employees. Available jail beds have also plunged from 1,690 in 2007 to just 1,367 today, and there's little sign of improvement on the horizon. Unless....

A revived proposal by the district attorney's office suggests outsourcing health care in the county's jails to a private contractor. The idea could save between $4 million and $5 million a year, says Deputy District Attorney Chuck French, who convened the 2009 corrections grand jury, which made the recommendation last December in its report.

"One of the problems in our mental health system is that there has been no support for community mental health," says French. "And that's really where you get the best bang for your buck."

As such, the jury suggested shifting the savings to support community mental health services like Project Respond—which aims to treat mental health problems before people act out in ways that could be construed as criminal, and end up in the county's jails ["The Criminalization of Mental Illness," Feature, Jan 14].

French first made the recommendation as part of a corrections review in 2006, which highlighted a contract between nearby Washington County and a company called Prison Health Services, Inc. (PHS), based out of Tennessee.

"A huge benefit of the contract signed by PHS and Washington County is that by the terms of the contract, PHS accepts all legal liability for judgments against the county involving legal actions for inadequate jail medical care," reads French's report.

"Recent events have demonstrated just how significant a contract clause like that might be," the report continues. "As Multnomah County is now facing the prospect of defending against a probable multi-million dollar lawsuit involving the death of an arrestee brought to the jail."

Since then, the county has settled its portion of the lawsuit mentioned for $925,000, relating to the 2006 death in custody of James Chasse Jr.—a man with schizophrenia.

Mental health advocates agree that Chasse should have had better care in the community before he was arrested, but they are also concerned about farming out jail health services to corporations just to save money on potential lawsuits.

"This is the canary in the mine," says Roy Silberstein, president of the Mental Health Association of Portland, saying PHS has faced more than 1,000 lawsuits at facilities across the country.

"The expense of these settlements is merely the acceptable cost to PHS of doing business," Silberstein continues. "But our association believes the efficiencies and savings PHS provides are at the expense of systemic and unconscionable paucity of quality health care."

For example, PHS paid $1.5 million in December to the widow of a Virginia man with mental illness who died of pneumonia and dehydration in one of its jails. In November 2008, an Idaho jury awarded $3.6 million to a woman who gave birth on a prison ramp in a PHS jail. Her baby was run over by a wheelchair, and now has cerebral palsy. Meanwhile the New York Times branded PHS care "flawed and sometimes lethal" at the conclusion of a 12-month investigation back in 2005.

Interim Multnomah County Sheriff Dan Staton is looking into the grand jury's suggestions, and will make recommendations to Chair Wheeler on March 2. Staton says people have suggested to him that he might be in favor of contracting out, but that such a characterization is "totally inaccurate."

"I have no intention of making any move on this until a full and thorough study has been done," says Staton, emphasizing that the quality of health care inmates receive "is obviously going to be foremost."

Wheeler says the county considered this idea before, back in 2006, but that the potential savings did not justify the risks.

"The question is: What are you giving up?" says Wheeler. "There are some cost savings that can't be justified as a matter of conscience."

"I would be opposed to anything that would give the jail inferior services," French responds.

PHS spokesman Pat Nolan says the company is aware that Multnomah County is "considering the option of outsourcing its corrective health care," but adds, "I really don't want to get into some big long debate before there's actually an RFP [request for proposals] process"—if the contract is opened up for bids.

"If there is an RFP process, I suspect that oversight will be a part of that," Nolan continues. "We feel good about our record."