Apples-To-Fish: Public and Private Prison Cost Comparisons
Apples-To-Fish: Public and Private Prison Cost Comparisons
Alex Friedmann 0
0 Human Rights Defense Center
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Article 4
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Alex Friedmann*
Introduction .............................................................................................504
I. Background .......................................................................................505
A. Studies with Favorable Findings .........................................506
B. Equivocal and Adverse Research Results .........................507
II. Difficulties in Public-Private Comparisons ..................................509
1. HIV, HCV, and Other Specified Medical
Conditions ........................................................................524
1. Per Diem Increases .........................................................543
2. Deferred Maintenance....................................................545
* Alex Friedmann serves as Associate Director of the Human Rights Defense Center,
a non-profit organization, and Managing Editor of HRDC’s monthly publication,
Prison Legal News (www.prisonlegalnews.org). He also serves in a non-compensated
capacity as President of the Private Corrections Institute (www.privateci.org), which
opposes the privatization of correctional services. He served ten years behind bars,
including six years at a CCA-operated prison in Tennessee, prior to his release in
1999. Special thanks are extended to the staff of the Fordham Urban Law Journal for
their review of this Article and helpful critiques. Any errors are the sole
responsibility of the author.
4. Bond Financing................................................................548
J. Fraud and Corruption...........................................................550
IV. Quality of Service Comparisons...................................................553
A. Violence Levels .....................................................................555
B. Staff Turnover .......................................................................556
C. ACA Accreditation ..............................................................558
D. Recidivism Rates Redux ......................................................561
V. Opportunity Costs...........................................................................563
Conclusion................................................................................................567
INTRODUCTION
It sounds like such a simple question: do private prisons save
money? The answer, however, is dependent on a number of factors—
including how “saving money” is defined.
Consider th
at in 2013
, the nation’s largest for-profit prison
company, Corrections Corporation of America (CCA), made $300.8
million in net profit on gross revenue of $1.69 billion.1 Thus, the
company achieved $300.8 million in savings over operational expenses
at its prisons, jails, and other detention facilities. But how much of
that $300.8 million went to taxpayers or reverted to state treasuries or
county coffers?
None. Those “savings” went to CCA in the form of corporate
profit.
Over the past three decades there have been dozens of reports and
studies on and analyses of cost comparisons between public and
privately-operated prisons—by academics, government agencies, and
independent organizations—all attempting to answer the elusive
question of whether private prisons save money.2 This is not one of
those attempts.
Instead, rather than trying to determine if prison privatization
results in savings due to the shifting of costs from public agencies, this
Article takes an opposite approach by identifying costs that are
shifted from privately-operated facilities to the public sector. An
examination of such cost-shifting factors is esse
ntial when evaluating
2014
]
cost comparisons, to better understand how private prisons
externalize expenses while internalizing profits.
In short, public agencies want to save money while private prison
companies have an inherent need to make money—and the latter
necessarily comes at the expense of the former.3
Part I of this Article examines previous public-private prison cost
comparison studies, while Part II discusses various factors that make
such comparisons difficult. Part III provides an exhaustive look at
cost shifting factors, whereby costs are shifted from private prisons to
public contracting agencies, and Part IV examines quality of service
comparisons—including levels of violence and staff turnover at
private prisons, accreditation by the American Correctional
Association, and recidivism rates. Part V addresses opportunity costs
associated with privately-operated prisons, while the Conclusion
proposes an alternative approach when considering whether prison
privatization results in (...truncated)