The treatment-industrial complex, and what it means for Seattle

Ike’s warning about the “military-industrial complex” was not only prescient for the sector he took aim at, but it was a foreshadowing of how an eagerness to privatize other government services has led to pathological outcomes.

AP has an article today on the privatization of the criminal justice system — one of many published on this topic over the last year. Not only have several states outsourced prisons to for-profit companies, but they have done the same for other parts of the system, including home detention and probation. The advocates for privatization argue that this saves governments money (through a belief that private companies will run the operations more efficiently) and reduce the number of people working on government payrolls. But there are two insidious aspects of this system that undermine the system. The first is that a company making a profit on a societal ill has no incentive to solve it, and in fact has a strong incentive to allow it to grow: the more people in the criminal justice system, the more money there is to be made. The second is that in many cases the system has been set up to allow these private companies to charge offenders for the services, including home detention ankle bracelets, probation officers’ time, and drug tests. Since many offenders can’t pay for these services, they end up back in jail (but still carrying the debts) only to be released again at a future point and thrown back into the system to accrue even more debt for services they can’t afford. This is the 21st century debtor’s prison; it criminalizes poverty and traps people in the criminal justice system.

Politico has an article that lays out how the problem is in fact spreading into what it calls the “treatment-industrial complex.” Correctional medical care, mental health services, and addiction programs are all beginning to be outsourced to for-profit companies as well. And they share the same two problems: there is a strong profit incentive to keep people in the programs long term, and the ability to charge people for services is trapping them in an ever-deepening cycle of debt.

This is an issue of huge relevance to Seattle as it struggles to deal with its own set of societal ills, including youth detention, a heroin epidemic, and of course homelessness. City leaders — and the taxpayers — have been generous in providing funds for programs to help address these problems, but as recent presentations to the City Council make clear, achieving a scale proportional to the size of the problems is a huge challenge. There aren’t enough emergency shelter beds, supportive-housing units, slots in drug-addiction programs, mental health counselors, police officers, and the list goes on. The city’s Human Services Division manages relationships with dozens of private non-profit community organizations, many of which it funds to provide one or more services to those in need. And still it isn’t enough — not nearly enough. Scaling up some of these programs, such as drug addiction and mental health treatment, will be extremely difficult since the people and other resources needed are scarce, the professionals require years of training and are highly sought-after, and facilities to house them often are specialized.

At some point we’re going to get desperate, and look beyond non-profits to private industry for help. Group Health Cooperative just got bought by Kaiser Permanente, in part because it has seen a slow decline in its business over the last several years; I can’t imagine they wouldn’t jump at the chance to leverage their existing facilities and staff to provide health services to the city. And while Group Health and Kaiser are both nominally non-profits, they both operate at a large scale and in a largely for-profit industry which has forced them to adopt the same operating mindset.  Other for-profit businesses would surely follow suit. The city’s model for providing services is already highly privatized; it will be very tempting to extend that model further if it helps to achieve the scale that has proven elusive to-date.

But even today, without the profit motive, it’s difficult to ensure that funding and programs are focused on solving problems. To point: the recent One Night Count of homeless persons found about 2,900 in Seattle and 4500 in greater King County. But that count didn’t include people in emergency shelters; increasing the number of shelter beds makes the One Night Count number look better,  provides a bit of protection from the elements for our most vulnerable, and makes it a little easier for outreach workers to connect the homeless with services — good and humane things we should be doing! — but for the most part it’s simply moving people around and doesn’t help anyone exit the system into a better life.  Programs such as “rapid rehousing” and diversion do focus on catching people just as they are about to enter the homeless system and prevent that from happening through specific interventions, but even then it’s challenging to find out whether the programs simply delay homelessness or truly prevent it long-term for the people they engage. Similar problems exist with the programs to transition people out of homelessness into permanent shelter.

We are beginning to pour a tremendous amount of money into addressing societal problems, and where there is big money, inevitably people will try to tap into that to make a profit. Even non-profits that provide human services need to be willing to make their own long-term existence secondary to serving the best interests of our most vulnerable. That is not meant to accuse: by all appearances the local non-profits that HSD works with are doing good work. But as the dollars go up, so do the stakes — and the temptations.

There are lessons to be learned from the prison-industrial complex and the treatment-industrial complex. When the city outsources programs and services — and it undoubtedly will continue to do so — it must focus clearly on not just serving people who are in the system, but on successfully graduating them out of it into better lives. And it must limit private organizations’ ability to directly charge the people they serve, because doing so will undermine the desire to move them through, up and out.