State request seeks study on youth detention privatization

Alaska’s Department of Health and Social Services (DHSS) is seeking contractors to study the feasibility of privatizing four of the department’s juvenile detention facilities, including the Kenai Peninsula Youth Facility on Kenai’s Marathon Road.

The study is required by Senate Bill 74, a DHSS reform bill currently awaiting the governor’s signature. Rob Wood, director of DHSS’s Division of Juvenile Justice, worked on the request for contractors.

“The Legislature is trying to do the best it can with the budget situation we have and is asking the state departments like mine to take a look at things that may help with that and may actually provide better service, too,” Wood said. “I would be surprised if we have a lot of people interested, but if we do it could provide better to service to Alaska.”

Two similar studies required by the bill — studying the feasibility of privatizing Anchorage’s Alaska Psychiatric Institute and the pharmacies of Alaska Pioneer Homes for seniors — were also solicited by DHSS on Wednesday.

Wood said a purpose of the feasibility study is to “really ask a lot of questions about … how could the state go into this kind of an arrangement, and what we would expect in terms of quality of care and honoring the commitment which we’ve already made, the mandate that the statutes give the Division (of Juvenile Justice) to take care of kids.”

“The feasibility study is to see if it makes sense,” Wood said. “If the feasibility study says it does, then it’s going to be a matter of understanding the permutations of that, trying to figure out how you’d put it together, and seeing if anyone would be interested in doing it.”

The request states that the chosen contractor “will identify and analyze potential options for privatization of select facilities, and the conversion of one or more of these facilities to offer non-secure residential mental health and/or substance use disorder treatment services. The contractor will identify which potential options will provide the best value to the State of Alaska, while ensuring regional cultural, health and rehabilitation service needs of youth in the juvenile justice system are met.”

Wood said a privatization proposal “would be a pretty new project for the state, a new undertaking, a new strategy.”

“Most of the people who’ve been involved in privatization in the country have been major corporations who work on corrections and juvenile justice issues,” Wood said. “But Alaska’s an expensive place to operate, though, and these are for-profit. That makes it kind of a difficult proposition for them.”

The study will also consider youth facilities in Palmer, Nome, and Ketchikan — four of the eight facilities managed by the DHSS’s Division of Juvenile Justice. Wood said the four chosen for the study are short-term detention centers, rather than longer-term mental health or substance abuse treatment centers.

“We were required by Senate Bill 74 to select some facilities, so we selected — for want a better term — the simplest ones and the smallest ones,” Wood said.

The 10-bed Kenai facility specializes in holding minors charged with crimes and detained under court orders identifying them as dangerous to themselves or others. The longer-term facilities are able to hold minors charged with more serious or chronic crimes for up to two years while providing treatment, Wood said.

The request lists two options to be investigated: privatizing the facilities or operating them as non-secured treatment centers for mental health and substance abuse. Deborah Erickson, DHSS’s Medicaid Redesign Initiative Project Coordinator, said the investigators will also consider leaving the facilities unchanged.

Wood said many of the existing treatment services in his division’s youth facilities were already provided by outside nonprofit groups under contract to the state. Such groups treat minors charged with sex offenses or substance abuse disorders, or who have been diagnosed with mental health disorders.

However, Wood said he doesn’t know of any private organizations in Alaska interested in offering non-treatment detention services.

The investigation will consider the legal side of the privatization proposal as well. Neither Wood nor Erickson said they are certain whether a decision to privatize could be made by DHSS or if it would require action by the Legislature.

“That’s one of the other questions that’s included in those (requests for proposals),” Erickson said. “What are the legal issues involved — what are the state’s legal obligations that can be essentially delegated to a contractor…? If there are recommendations for privatization, what legal changes would be required to make that change?”

Even if a privatization decision could be made by the state administration, Erickson said the Legislature would still be involved through its role in funding the department.

“If there are no laws that would need to be changed or if there is no specific legislation, (privatizing a facility) would at least require changes in the budget,” Erickson said. “So if there was going to be a process to privatize, it would definitely involve the Legislature.”

Although the request states consultants should “facilitate meetings to gather stakeholder input in each of the four communities,” the studies may or may not include public meetings in Kenai, depending on the consultant’s plan for the study.

“We’ve asked the respondents to the RFPs to essentially propose what their stakeholder engagement process would be,” Erickson said.

The contract for the juvenile detention study will be awarded on July 11. Senate Bill 74 requires the finished report to be presented at the beginning of the Legislature’s next regular session in January 2017.


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