Bureau of Prisons: Better Planning and Evaluation Needed to Understand and Control Rising Inmate Health Care Costs
Published: 2017-06-29T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: As of June 2017, BOP was responsible for the custody and care—including health care—of about 154,000 inmates housed in BOP institutions. Health care includes medical, dental, and psychological treatment. BOP provides most care inside its institutions, but transports inmates outside when circumstances warrant. GAO was asked to review health care costs at BOP institutions.
This report addresses: (1) BOP's costs to provide health care services and factors that affect costs; (2) the extent to which BOP has data to help control health care costs; and (3) the extent to which BOP has planned and implemented cost control efforts.
GAO analyzed BOP health care obligations data for fiscal years 2009 through 2016, gathered information on BOP's health care cost control initiatives through a data collection instrument, and reviewed BOP's health care related strategic plans. GAO also interviewed BOP officials and visited 10 BOP institutions, selected in part, for total and per capita medical services costs.
section_title: What GAO Found
paragraphs: From fiscal years 2009 through 2016, the Bureau of Prisons (BOP) obligated more than $9 billion for the provision of inmate health care and several factors affected these costs. Obligations for health care rose from $978 million in fiscal year 2009 to $1.34 billion in fiscal year 2016, an increase of about 37 percent. On a per capita basis, and adjusting for inflation, health care obligations rose from $6,334 in fiscal year 2009 to $8,602 in fiscal year 2016, an increase of about 36 percent. BOP cited an aging inmate population, rising pharmaceutical prices, and increasing costs of outside medical services as factors that accounted for its overall costs.
BOP lacks or does not analyze certain health care data necessary to understand and control its costs. For example, while BOP's data can show how much BOP is spending overall on health care provided inside and outside an institution, BOP lacks utilization data, which is data that shows how much it is spending on individual inmate's health care or how much it is expending on a particular health care service. BOP has identified potential solutions for gathering utilization data, but has not conducted a cost-effectiveness analysis of these solutions to identify the most effective solution. BOP also does not analyze health care spending data, i.e., what its institutions are buying, from whom, and how much they spend. BOP has pursued some opportunities to control its health care spending through interagency collaboration and national contracts, but it has not conducted a spend analysis to better understand trends. Doing so would provide BOP with better information to acquire goods and services more strategically.
BOP has initiatives aimed to control health care costs but could better assess effectiveness and apply a sound planning approach. Since 2009, BOP has implemented or planned a number of initiatives related to health care cost control, but has not evaluated their cost-effectiveness. Further, BOP has engaged in a strategic planning process to help control costs, but has not incorporated certain elements of a sound planning approach, such as developing a means to measure progress toward its objectives and identifying the resources and investments needed for its initiatives. By incorporating these elements, BOP could enhance its planning and implementation efforts before expending resources, better positioning itself for success as it aims to control health care costs.
section_title: What GAO Recommends
paragraphs: GAO is making five recommendations, including that BOP conduct a cost-effectiveness analysis to identify the most effective method to collect health care utilization data; conduct a spend analysis of health care spending data; evaluate cost control initiatives; and enhance its planning efforts by incorporating elements of a sound planning approach. BOP concurred with the recommendations.

section_title: Letter
paragraphs: The mission of the Department of Justice’s (DOJ) Federal Bureau of  Prisons (BOP) is to protect society by confining offenders in facilities that  are safe, humane, cost-efficient, and appropriately secure. As part of its  duties, BOP is responsible for delivering adequate health care, including  medical, dental, and mental health care, in a manner consistent with  accepted community standards for a correctional environment. BOP  reported obligating almost $1.2 billion of its $6.9 billion appropriation to  the medical and dental care of inmates for fiscal year 2016. These costs  include various categories, such as medical, dental, and psychiatric staff  salaries within BOP institutions; pharmaceuticals and medical supplies;  and expenses associated with inmates receiving care at a local health  care provider, such as a hospital, when BOP cannot provide the  necessary care in-house. In addition, for fiscal year 2016, BOP reported  obligating more than $70 million to provide mental health treatment to  inmates, including psychological treatment such as group and individual  psychotherapy sessions, psychology treatment programs, and sex  offender treatment programs. BOP’s fiscal year 2017 Congressional  Budget Justification shows medical services and psychological services  funding increasing annually, and BOP expects costs to continue to  increase in the future, driven by, among other things, rising costs across  the health care industry, including pharmaceutical costs, and the  expanded needs of the aging inmate population.
Multiple U.S. courts over the years have determined that inmates have a  constitutional right to adequate medical and mental health care. By  statute, BOP is required to provide for suitable housing and the  safekeeping, care, and subsistence of all persons charged with or  convicted of offenses against the United States. In light of the  importance of providing health care to BOP inmates, and the rising costs  associated with providing care, you asked us for information on BOP’s  costs for inmate health care, factors that are impacting costs, and what  initiatives BOP has undertaken to address rising costs. This report  addresses the following questions: (1) How much did BOP obligate for  inmate health care from fiscal years 2009 through 2016 and what factors  affect BOP’s costs? (2) To what extent does BOP have data available to  understand and help control its health care costs? (3) What initiatives has  BOP identified and implemented to help control health care costs and  how effectively has BOP planned its health care cost control efforts?
To address these questions, we interviewed BOP officials knowledgeable  about health care costs and cost control efforts from several divisions and  offices, as well as officials at BOP’s six regional offices. We conducted  site visits to 10 BOP institutions, and selected these institutions based, in  part, on factors that both BOP and existing research indicated could be  affecting costs, such as inmate characteristics and geography, as well as  other factors that allowed for variation in our sample (see app. I for more  details on our selection criteria). In addition, we reviewed key documents,  such as BOP’s Congressional Budget Justifications for fiscal years 2009  through 2018.
To examine how much BOP has obligated for inmate health services over  the past 8 fiscal years and the factors that affect BOP’s costs, we  reviewed key documents, such as BOP’s Annual Financial Statements,  and the Department of Justice’s Financial Management Information  System Sub-Object Classification (SOC) Code Guide. We also analyzed  BOP obligation data from fiscal years 2009 through 2016 on medical  services, psychology services, drug and sex offender treatment  programs, and medical staff training. We included 8 years of obligations  data in order to observe trends over time in health care costs. We  included all categories of care that are considered essential to treating  health, including mental health and substance use disorder treatment. To  determine the per capita obligations, we divided the total obligation by the  inmate population at the end of each fiscal year. We adjusted these data  to reflect health care inflation. To better understand the composition of  medical services obligations, we analyzed obligations by SOC code. To  understand the changes in pharmaceutical expenditures over the period  we reviewed, as well as what illnesses were impacting those obligations,  we analyzed BOP’s list of top 50 medications for fiscal years 2009  through 2016. We compared these medications to the U.S. National  Library of Medicine’s MedlinePlus list of drugs and supplements, in order  to determine their uses. To assess the reliability of BOP’s obligations  and expenditures data, we performed electronic testing for obvious errors  in accuracy and completeness, and interviewed agency officials  knowledgeable about BOP’s budget to determine the processes in place  to ensure the integrity of the data. We determined that the data were  sufficiently reliable for the purposes of this report. Finally, since  geographic location may impact the provision or cost of inmate health  care, we analyzed BOP institutions’ proximity to hospitals. To do this, we  used geographic information services software to map the addresses of  all BOP institutions, and identify how many hospitals were within a 20  mile radius of the institution.
To examine the extent to which BOP has data available to understand  and help control its health care costs, the initiatives BOP has identified  and implemented to help control health care costs, and how effectively  BOP has planned and implemented these initiatives, we reviewed  relevant BOP program statements. We also conducted interviews with  BOP officials knowledgeable about cost control initiatives. Further, we  reviewed Office of Management and Budget (OMB) guidance on cost- effectiveness analysis and BOP policies to assess the extent to which  BOP analyzed its efforts to gather data. To determine the extent of  available data on BOP health care spending, we searched the Federal  Procurement Data System-Next Generation (FPDS-NG) for BOP contract  actions for fiscal years 2009 through 2015 and obtained pharmaceutical  obligations data from BOP for that same period. Based on these steps,  we determined the data were sufficiently reliable for the purposes of our  reporting objective.
To determine how well BOP’s health care cost control planning  mechanisms work, we obtained and reviewed selected portions of the  annual BOP-wide strategic plans for 2009 through 2015, BOP’s Health  Services Division (HSD) Governing Board Meeting Minutes through 2015,  and the HSD Strategic Plan for 2015 through 2019. To identify BOP’s  health care cost control efforts, their status of implementation, and the  extent to which BOP had conducted cost estimates for each, we  interviewed BOP officials and reviewed documents they provided, as well  as reviewed relevant GAO reports and DOJ Office of Inspector General  (OIG) reports. We summarized this information into a data collection  instrument for verification by BOP officials and requested additional data  and supporting documentation for each initiative. We also interviewed  officials from DOJ OIG and DOJ’s Justice Management Division to  discuss prior DOJ report recommendations on BOP health care costs. We  interviewed officials at the 10 institutions we visited, observed health care  programs and cost control efforts, and obtained documents relating to the  costs and cost savings of regional and institutional initiatives to control  health care costs. Appendix I contains a more detailed discussion of our  objectives, scope, and methodology.
We conducted this performance audit from February 2016 to June 2017  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: As of June 2017, BOP was responsible for approximately 188,000  inmates in federal custody. About 81 percent, or approximately 154,000  inmates, are housed in BOP-operated institutions. There are 122 BOP- operated institutions, with some of the institutions clustered in a Federal  Correctional Complex (FCC). BOP designates 7 of its 122 institutions as  medical referral centers, generally called a Federal Medical Center  (FMC), to provide advanced care for inmates with more serious chronic or  acute medical conditions. Each BOP institution (or complex) is located  within one of six regions, with an office overseeing the region (see fig. 1).  BOP also has a Central Office, located in Washington, D.C., that  oversees the six regions.
subsections: section_title: Provision of Health Care
paragraphs: BOP is responsible for providing medically necessary medical, dental,  and mental health services in a manner consistent with standards of care  for the non-prison community. BOP’s Health Services Division oversees  the provision of medical, dental, and psychiatric services. BOP’s  Psychology Services Branch, under its Reentry Services Division, is  responsible for providing psychology services, including psychology  treatment programs and drug abuse treatment programs.
BOP provides most medical and dental care inside its institutions (inside  care), usually with BOP-employed medical staff. The level and kinds of  services provided depends upon the care level of the institution, as  described below. Each BOP institution operates a health services unit.  Most units have examination rooms, treatment rooms, dental clinics,  radiology and laboratory areas, a pharmacy, and administrative offices,  as can be seen in figure 2 below. BOP staffs these health units with  medical professionals including physicians, dentists, nurses, pharmacists,  and mid-level practitioners. Inside care services include:
Health screening upon inmates’ admission to the prison,  comprehensive documentation of inmates’ medical history, and  physical exams to identify underlying infectious, chronic, and  behavioral health needs.
Sick call triage and episodic visits to assess, diagnose, and treat  short-term health problems.
Preventative health visits to screen for underlying chronic conditions  and immunize against transmission of preventable infectious  diseases.
Chronic care clinics to manage long-term diseases, such as diabetes,  asthma, and congestive heart failure.
Rehabilitative care to regain or maintain optimal physical and mental  health function.
Oral health care to assess, diagnose, treat, and prevent dental  cavities and oral diseases.
When BOP is unable to provide a medical service to an inmate, BOP  transports the inmate to a medical facility or provider in the community  (outside care). Generally, each BOP institution has its own outside care  contract that sets payment rates for services provided with the contracted  community medical centers and providers. Further, apart from some  national BOP contracts that standardize goods and services, each BOP  institution acquires its own health care goods and services. Institution- acquired goods and services vary, and include contracted health care  professionals, medical imaging services, such as ultrasound and  magnetic resonance imaging, medical equipment, and medical waste  disposal.
Beginning the process in 2004, BOP instituted a medical and mental  health care level system for its inmates and its institutions. BOP  designates inmates as a care level 1, 2, 3, or 4, depending on the level of  medical and mental health services required. Inmates designated as a  care level 1 are generally considered healthy, and the intensity of care  required increases along with care level (see table 1).
BOP also classifies its institutions as a care level 1, 2, 3, or 4, depending  on the level of medical and mental health services provided (see app. II  for a complete list of institutions with their associated medical care levels).  As of 2017, BOP has seven care level 4 institutions—FMCs—that offer  advanced care, such as dialysis, oncology treatment, limited surgery  services, prosthetics, inpatient and forensic mental health, dementia care,  and end-of-life care (see app. III for more information on the FMCs).
BOP Electronic Medical Records System  BOP uses an electronic medical records system—the Bureau Electronic  Medical Record (BEMR) system—to keep track of an inmate’s medical,  social, and psychological history. It includes information on an inmate’s  clinical encounters (for both inside care and outside care) and medication,  among other things. According to BOP officials, BEMR differs from  typical electronic medical records systems used outside of prison  systems, which generally tie a diagnostic code to a reimbursement rate.  BOP’s system differs because it was designed as a record of clinical care,  not a record of managing reimbursements through private insurance  companies, Medicare, or Medicaid.
Health Care Planning and Oversight  BOP plans and oversees its provision of health care through various  mechanisms; the following are four major mechanisms that effect health  care cost control:
HSD Executive Staff: The HSD Assistant Director, Senior Deputy  Assistant Director, and Medical Director oversee the programs,  operations, and delivery of health care for BOP institutions. They  direct the HSD Branch Chiefs and Chief Professional Officers charged  with managing national health programs and services. According to  BOP officials, HSD Executive Staff are the most integral planning  mechanism and the final decision-makers on any HSD plan.
HSD Governing Board: BOP established this multi-divisional and  multi-regional governance structure in 2005 to provide executive level  strategic planning and performance evaluation of health services  management and operations. Generally, the Board is responsible for  overseeing the planning, organization, delivery, and evaluation of  health services provided within BOP institutions by BOP staff and  contractors. The Board is also tasked with working with HSD to  ensure that medically necessary health care is delivered in the most  cost-efficient way.
The BOP-Wide Annual Strategic Plan: BOP develops an annual  strategic plan to help fulfill its mission and achieve strategic goals.  BOP highlights cost-efficiency in several parts of its annual strategic  plan, including its mission and vision statements. BOP’s mission  statement states that BOP institutions will be cost efficient and BOP’s  vision statement states that it aims to be the best value provider of  efficient correctional services and programs. BOP developed strategic  objectives, including a strategic objective focused on health care  efficiencies, which BOP explains as “maximizing health care  resources as a cost-containment strategy by applying evidence-based  business practices and measuring performance through the use of  appropriate industry-wide metrics.”
The HSD Integrated Strategic Plan for 2015 through 2019: HSD also  has an internal five-year strategic plan for the division that focuses on  HSD initiatives that are intended to bring large-scale change to BOP’s  health care system. HSD established four overarching focus areas in  the plan: (1) administration and program management, (2) health  services staffing and management, (3) financial management, and (4)  risk management. The HSD integrated strategic plan includes a  description, implementation strategies, and expected outcomes for all  four focus areas for each of the 17 HSD branches and sections listed  in the plan.
section_title: BOP Obligated More Than $9 Billion for Inmate Health Care From Fiscal Years 2009 through 2016 and Several Factors Affected Costs
subsections: section_title: BOP’s Annual Health Care Obligations Have Increased Overall and on a Per Capita Basis
paragraphs: During the 8-year period starting in fiscal year 2009 and ending in fiscal  year 2016, BOP obligated more than $9 billion for the provision of inmate  health care. According to BOP data, annual obligations increased from a  total of almost $978 million in fiscal year 2009 to more than $1.3 billion in  fiscal year 2016, an increase of about 37 percent overall during this  period (see table 2). More specifically, annual obligations for medical  services increased by about 37 percent, psychology services by about  39 percent, and drug abuse treatment programs by almost 44 percent.
As shown in table 2, medical services obligations have been increasing  over time. Psychology services and drug abuse treatment programs  obligations have also been increasing over time. According to BOP  officials, more recent increases in psychology services obligations can be  attributed to an effort to fill vacancies in psychology services positions  throughout BOP institutions. BOP also issued a new program statement  in 2014 on the treatment and care of inmates with mental illness, which  increased the treatment requirements and necessitated hiring more staff,  according to BOP officials. BOP officials also explained that more recent  increases in drug abuse treatment program obligations were due to BOP  adding 18 additional Residential Drug Abuse Programs (RDAP), including  some specialized RDAP, beginning in fiscal year 2013. For example,  BOP added four RDAPs in high security institutions, and three Spanish- language RDAPs. Sex Offender Management Programs and medical staff  training remained fairly constant during this time.
To account for any possible increases in health care obligations as a  result of changes in the inmate population, we estimated the annual per  capita, or per inmate obligations, by dividing the total health care  obligations by the number of inmates—and this figure also increased over  time, as can be seen in table 2. After adjusting for inflation, per capita  health care obligations increased from $6,334 per inmate in fiscal year  2009 to $8,602 per inmate in fiscal year 2016, or an increase of about 36  percent during this time period. As table 2 shows, most of the growth in  inflation adjusted per capita obligations occurred in the last four years of  fiscal years 2013 through 2016.
Of the five categories we list for total health care obligations (medical  services, psychology services, drug treatment programs, Sex Offender  Management Programs, and medical staff training) medical services  comprised the largest amount, about 88 percent. BOP-reported medical  services obligations include several categories of expenditures, which we  separated into outside medical services and inside medical services, the  latter of which we grouped into five major categories. We analyzed  these categories and found that for fiscal year 2016, about 37 percent were for medical staff labor costs inside BOP institutions and 39 percent  were for outside medical services, as illustrated in figure 3. Outside  medical services costs include costs to treat inmates at private  physicians’ offices or at hospitals, as well as transportation costs. These  costs include security related costs, including overtime costs for  correctional officers to transport the inmates to those locations, as well as  for their time guarding inmates, based on inmates’ custody levels, when  inmates are hospitalized. According to BOP, in fiscal years 2015 and  2016, security related costs made up 19 percent of outside medical  services’ costs.
At the same time that BOP’s health care obligations have been  increasing, total United States health care expenditures has also been  increasing. According to the Department of Health and Human Services  National Health Expenditure Accounts (NHEA) data, total health care  expenditures in the United States increased by 5.8 percent in fiscal year  2015, and reached a per capita expenditure of $9,990. However, as we  show in table 3, growth in expenditures, while increasing every year, has  not increased consistently, with the last three fiscal years of 2014 through  2016 increasing at a higher rate. Table 3 also shows the per capita  expenditures, which have increased every year over the 8-year time  period.
National health expenditures are not directly comparable to BOP’s costs  because the inmate population is predominantly adult and male, unlike  the overall U.S. population. Nevertheless both national health  expenditures and BOP health care costs have risen at a higher rate in the  last three years.
section_title: Various Factors Affected BOP’s Health Care Costs
paragraphs: We spoke with numerous BOP officials at the institutional, regional, and  Central Office levels to discuss the factors that affected inmate health  care costs. Officials frequently cited the following as major factors:  inmates entering with relatively poorer health, aging inmates,  rising pharmaceutical prices, and outside medical services.
Inmates entering with relatively poorer health—BOP officials stated  that inmates are a unique population that poses health care challenges.  For example, officials stated that inmates come into the system with more  acute needs from limited access to health care or they have engaged in  risky behaviors, such as substance abuse. Inmates also tend to have  higher rates of infectious diseases and chronic conditions that can persist  throughout incarceration. According to the Council of State Governments  Justice Center, rates of mental illness, substance use disorders,  infectious disease, and chronic health conditions are as much as seven  times higher for inmates than rates in the general population.
Aging inmates—BOP officials stated that an aging inmate population  affects health care costs. In a 2015 report, the DOJ OIG also found that  aging inmates are more costly to incarcerate than younger inmates due to  increased medical needs. BOP data show that the average age of  inmates has increased from fiscal year 2009 through 2016, as has the  percentage of inmates aged 55 years or older. As seen in table 4, the  percentage of inmates aged 55 years or older increased from 8.4 percent  of the population in fiscal year 2009 to 12.0 percent in fiscal year 2016,  which is an increase of about 44 percent during this time period.
According to BOP officials, and the 2015 DOJ OIG report, increasing  numbers of aging inmates are due to (1) inmates entering the system for  the first time at older ages, and (2) inmates aging over time while  incarcerated and serving long sentences.
Rising Pharmaceutical Prices—According to BOP officials, and data we  reviewed, expenditures for pharmaceuticals have risen from fiscal years  2009 through 2016. As table 5 shows, BOP’s total pharmaceutical  expenditures have increased from $61.4 million in fiscal year 2009 to  $111.7 million in fiscal year 2016, or an increase of about 82 percent.  Accounting for changes in inmate population over this time period, we  found that per capita expenditures have also increased, even in years  when population fell. Adjusting for inflation, and using 2016 dollars, we  found that overall per capita expenditures increased from $443 per  inmate in fiscal year 2009 to $715 in fiscal year 2016, or an increase of  about 61 percent.
According to BOP officials, new advances in certain medications—in  particular hepatitis C medication, HIV/AIDS medication, and biologics to  treat cancers—have contributed to this increase. For example, the Food  and Drug Administration (FDA) approved two new medications in a new  class of hepatitis C drugs in May 2011, which significantly increased the  cost of treating hepatitis C-infected inmates. As we show in table 6,  BOP’s hepatitis C medication expenditures increased by almost 132  percent from fiscal year 2011 to 2012. FDA approved additional new  medications at the end of 2013 and in 2014 that essentially cure hepatitis  C, but that also drove up BOP’s treatment costs. As these latest  medications became the standard of care for treating hepatitis C, BOP  was therefore required to use them. Table 6 also shows that BOP  experienced an increase in hepatitis C medication expenditures of about  136 percent from fiscal year 2014 to 2015. Overall, BOP experienced an  increase of about 427 percent for hepatitis C medication during the 8-year  time period. According to BOP officials, the average cost to treat one  inmate with the new medication ranges from $30,000 to $60,000. BOP  treated 240 inmates in fiscal year 2015 and 327 inmates in fiscal year  2016 with the new medications. Additionally, according to BOP’s 2018  Congressional Budget Justification, BOP estimated that there were  approximately 20,000 inmates infected with hepatitis C, most of whom  had not been treated. Table 6 also shows increases in expenditures for  medication to treat cancer and HIV/AIDS. Overall, expenditures for  cancer medication increased by about 315 percent during the 8 year time  period, and by about 87 percent for HIV/AIDS medication.
To ensure appropriate management of the hepatitis C infected inmate  population, BOP developed treatment criteria, consistent with the  American Association for the Study of Liver Diseases guidelines, to  expediently identify and treat inmates with the highest medical need. In  addition, the BOP Chief Pharmacist and other officials told us that they  seek opportunities to acquire voluntary price reductions below the  statutory Federal Supply Schedule pricing for hepatitis C medication from  drug manufacturers.
BOP data show that while pharmaceutical expenditures have increased  overall, pharmaceutical expenditures for certain categories have varied,  as can be seen in table 6 and figure 4. Expenditures have increased for  hepatitis C, cancer, and HIV/AIDS medication, but decreased for  psychotropic medications, which are generally used to treat mental health  conditions. According to BOP officials, the availability of generic  equivalents has helped decrease costs of psychotropic medication. Our  prior work has also shown that generic drug prices have fallen overall  since 2010, despite some extraordinary price increases in some generic  medications.
Outside Medical Services—BOP officials told us that costs for outside  medical services have risen, which is another factor that is likely affecting  their total obligations. According to BOP data, the total amount obligated  increased from $322.6 million in fiscal year 2009 to $456.7 million in fiscal  year 2016 (see table 7), which is an increase of about 45 percent over  this period.
As previously discussed, BOP incurs costs for outside care when BOP  staff take inmates outside for specialty care that cannot be provided  inside the institution, or for acute or emergency care, which could  potentially become a catastrophic case. We asked BOP for the  catastrophic care cost data for the 6 regions, for fiscal years 2014 and  2015. BOP was able to provide us the data for five of six regions for fiscal  year 2015, and provided incomplete data for 2014 for most regions. When  we asked one region why the data were incomplete, we were told that  there was no requirement to collect such data. Although these data are  incomplete, they show that BOP estimated costs of at least $100 million  in fiscal year 2015 for catastrophic care in 5 of its 6 regions, which  represents about 22 percent of outside medical services obligations for  2015. In its Congressional Budget Justifications from fiscal years 2009  through 2016, BOP reported that it had developed a process for  monitoring and tracking catastrophic care costs; however, BOP officials  acknowledged that their efforts to date have not been successful. During  the course of our review, BOP designed a data collection instrument,  which BOP officials stated they distributed to the regional offices, in order  to more uniformly collect catastrophic care data moving forward.
Outside medical services made up about 40 percent of medical services  obligations annually from fiscal years 2009 through 2016. According to  BOP officials, BOP has difficulties attracting sufficient medical staff to  care for inmates in-house for institutions in remote locations, and  therefore relies on outside care to a greater extent in these locations. We  have also reported that BOP finds it particularly challenging to hire  medical staff for institutions in rural locations because of the institutions’  location and low pay in these areas. In addition to the challenges posed  by rural locations, some BOP institutions also have fewer community  health care resources in proximity. As shown in figure 5, we found that of  the 98 BOP institutions, 64 of them have five or fewer hospitals within a  20 mile radius, and 9 had no hospitals within a 20 mile radius. BOP  officials also noted that the existence of a hospital in proximity to a BOP  institution does not guarantee the hospital is willing to contract with BOP  to serve an inmate population. A DOJ OIG report found that in one BOP  complex, a decline in staffing from fiscal year 2010 to fiscal year 2014  corresponded with an increase in outside medical services costs of 47  percent during the same period. According to BOP officials, this is the  primary reason BOP instituted its medical care level classification system,  so the level of inmate health needs are matched to locations where  community health care resources are sufficient.
section_title: BOP Lacks or Does Not Analyze Certain Health Care Data Necessary to Understand and Control its Costs
subsections: section_title: BOP Lacks Health Care Utilization Data
paragraphs: BOP lacks data on the health care services it provides to inmates, which  is otherwise known as health care utilization data. BOP officials  explained that existing data systems, such as the Financial Management  Information System (FMIS), the accounting system of record, and BEMR,  are not capable of collecting health care utilization data. Specifically, BOP  cannot collect any health care utilization data from FMIS, because it is a  DOJ-wide system and was not designed to allow DOJ components, such  as BOP, to customize it. For example, while FMIS tracks expenditures on  categories such as salaries and supplies, it cannot be customized to  analyze health care data. BOP officials also said they cannot collect  financial data from BEMR because BEMR was not designed to collect  such data.
BOP officials acknowledged that health care utilization data is important  to understand and control health care costs, but recognized that BOP  does not have data on its own use of resources. Officials also told us that  BOP’s lack of health care utilization data has stalled its implementation of  one health care cost control opportunity identified in 2012 that would  leverage its volume purchasing power while contracting for medical  services. Specifically, BOP is planning to pilot a regional comprehensive  medical services contract. However, according to BOP officials, they need  to provide information to the potential contractors such as how utilization  rates compare across institutions within the region, and across the  different regions, in order for potential contractors to build proposals.  Because BOP is not positioned to provide utilization data, it cannot move  forward with its plans. BOP officials also stated that a lack of data on its  utilization of services stifles their ability to evaluate various health care  cost control efforts.
Given these limitations, BOP has explored and identified some solutions  since 2009 to collect data on its utilization of health care services but has  not yet determined how to obtain health care utilization data. Examples  include the following:  In fiscal year 2009, BOP began utilizing a medical claims adjudication  services contract through which BOP sought, in part, to gather data  on the utilization of health services outside its institutions. While  BOP officials stated they intended to eventually cover all BOP  institutions under this contract, as of February 2017, only 23 BOP  institutions have used the service. BOP officials explained that BOP  did not add more institutions to the initial medical claims adjudication  contract because the contract ended before it could do so. BOP  officials could not explain why more institutions had not utilized the  services in the five years preceding the end of the contract, but some  regional officials we spoke with, and officials at some of the  institutions we visited, said the medical claims adjudication services  provided were not cost effective. Senior BOP officials disagreed with  the regional officials’ statement and said that the services were  necessary to verify that medical services invoices were correct. BOP  created a solicitation for a new contract in February 2016, and, as of  February 2017, BOP was evaluating offers. According to officials,  BOP is reviewing several proposals to contract for medical claims  adjudication services for all BOP-managed institutions and expects to  award the contract in early spring 2017.
In fiscal year 2016, BOP contracted for a study to consider various  options to enhance its ability to collect and analyze data through  BEMR, including data on utilization of health care services inside and  outside BOP’s institutions. The study considered three options— keeping the existing system as is, enhancing the existing system, or  replacing the system entirely. The study included costs and  recommendations for BOP to consider. As of February 2017, BOP  officials indicated that they are still exploring these options.
In fiscal year 2016, to provide potential vendors with utilization data to  pilot the regional comprehensive health care contract, as described  earlier, BOP began searching for computer software to convert its  paper claims for outside medical services into electronic format files.  Such files would include the inmate’s description, the condition for  treatment, the service provided, and the cost of treatment. As of  February 2017, BOP officials had not yet identified any cost-effective  solutions through which to convert paper claims but said they continue  to pursue this option.
In fiscal year 2016, BOP officials also attempted to devise a method to  collect health care utilization data from each of its institutions; however,  they did not implement this approach after receiving feedback from  institution-based personnel that it would be too burdensome on them to  implement. As of February 2017, according to officials, BOP continues to  explore options to collect and analyze utilization data based on the  experiences of other health care systems. For example, BOP convened a  federal interagency group to discuss how other federal agencies study  utilization rates and discussed with officials from the California  Department of Corrections the approach those officials have taken.
BOP officials recognize the importance of finding a solution to collect  utilization data and has identified, and in some cases attempted then  abandoned, various possible solutions. However, BOP officials told us  that they were not aware of OMB guidance on how to conduct a cost- effectiveness analysis, which describes how to systematically evaluate  options, and would review it as they continue to pursue a solution to  BOP’s lack of utilization data. OMB Circular A-94 calls for conducting a  cost-effectiveness analysis when the benefits from competing alternatives  are the same or where a policy decision has been made that the benefits  must be provided. By conducting a cost-effectiveness analysis of the  potential ways to obtain health care utilization data, BOP will be better  positioned to determine the most cost-effective way to collect such data  and to start doing so in a timely manner.
section_title: BOP Does Not Analyze Available Health Care Spending Data
paragraphs: BOP has not consistently collected and analyzed its institutions’ health  care spending data to identify additional cost control opportunities, such  as through strategic sourcing. Strategic sourcing is a process that moves  an organization away from numerous individual procurements toward a  broader, aggregate procurement approach. This broader approach  generally begins with an analysis of spending (spend analysis) and the  identification of products and services for which a more effective sourcing  strategy could be implemented. We have emphasized the importance of  conducting a comprehensive spend analysis for strategic sourcing  purposes since 2002. The approach provides knowledge about how much  is being spent for goods and services, who the buyers are, who the  suppliers are, and where the opportunities are to save money and  improve performance.
BOP officials told us that they do not routinely analyze or review BOP’s  spending data to identify new opportunities for cost savings through  strategic sourcing. BOP procurement officials told us they search for  strategic sources for a health care good or service once their colleagues  in HSD notify them that BOP needs to obtain the good or service. BOP  officials told us it is time intensive to collect and analyze spending data.  Nevertheless, they acknowledged the benefits of strategic sourcing and  stated they need to seek additional strategic sourcing opportunities. In  fiscal year 2013, BOP identified health care supplies/services as a target  area for identifying cost savings opportunities that are likely to produce  significant savings through strategic sourcing. Further, according to  BOP’s April 2016 Strategic Sourcing Program guidance, the key to the  strategic sourcing program is a thorough analysis of spending patterns— or a spend analysis—to determine what is being purchased, how it is  being purchased, the dollar value of those purchases, and which vendors  are involved. This guidance is consistent with GAO’s prior work on  leading commercial practices in strategic sourcing. However, despite  this guidance, BOP officials told us that they had not yet reviewed health  care spending data and could not identify any BOP official who would  have the time to complete the task.
Although BOP has not conducted a spend analysis, it has identified and  implemented some strategic sourcing opportunities, such as pursuing  national contracts so that all institutions can pay for the same goods or  services at the same negotiated rates. When national contracts are not in  place, each BOP institution generally procures health care goods and  services on an individual basis and some institutions have individually  procured the same medical care equipment or services at varied costs.  For example, several institutions have either purchased or leased one  particular brand of robotic equipment to dispense medication as part of  their pharmaceutical operations, but costs for the equipment varied  across the institutions—one had an initial purchase cost of about  $122,000, while another had an initial annual lease cost that was about  $43,000. BOP officials also told us that they identify strategic sourcing  opportunities through discussions with other agencies and have  participated in interagency collaboration on strategic sourcing.
According to BOP documentation, BOP does not have a single data  system that can provide health care spending data for a spend analysis;  however, existing sources, such as the Federal Procurement Data  System-Next Generation (FPDS-NG), could assist BOP in its data  collection effort. For example, BOP records all contracts with estimated  values above a certain threshold (currently $3,500) in the FPDS-NG, a  database used by agencies across the federal government to record  procurement information. Additionally, according to BOP officials, each  institution’s business administrators regularly audit spending data from  purchase cards—cards used by government agencies to buy goods or  services. One BOP region, for example, created a method to monitor its  institutions’ spending through its local accounting program that helped the  region identify opportunities to control costs. Officials found, when they  began tracking some aspects of institutional spending, that two  institutions within that region were spending $5,000-$10,000 more per  year on biohazardous waste disposal than other institutions. As a result,  officials from the region contacted the institutions’ management and  asked them to identify lower cost vendors, which the institutions did.  Conducting spend analyses using these existing and readily available  data sources could provide BOP with several benefits, including  knowledge about how much is being spent for given products and  services, who the buyers and suppliers are, and where opportunities exist  for BOP to use strategic sourcing to leverage buying and save money.
section_title: BOP Has Initiatives Aimed to Control Health Care Costs but Has Not Assessed Their Effectiveness, Applied a Sound Planning Approach, or Documented its Analyses of Federal Medical Centers’ Missions
subsections: section_title: BOP Has Initiatives Intended to Control Health Care Costs but Has Not Evaluated Their Effectiveness
paragraphs: BOP has taken bureau-wide actions to help control health care costs  through several initiatives, but has generally not evaluated the  effectiveness of these initiatives. We reviewed BOP documents to identify  initiatives aimed at health care cost control for the period beginning with  fiscal year 2009 through November 2016. Through our review and  discussions with BOP officials, as of February 2017, we found that BOP  had 10 initiatives aimed at controlling its health care costs (see table 8).  The table provides a description of each initiative and status.
BOP had also reported six other cost containment initiatives or systems in  its fiscal year 2017 Congressional Budget Justification. BOP officials  explained that although they had previously publicly reported that these  initiatives were designed to contain health care costs, during the course  of our review they realized that their primary purpose was instead for  clinical or administrative purposes. BOP officials stated that there may be  a secondary gain of cost avoidance, but regardless of cost avoidance,  they would have carried out the initiatives. BOP reported these cost  containment initiatives or systems again in its fiscal year 2018  Congressional Budget Justification (see table 9).
Of the 16 initiatives BOP either identified for us (table 8), or reported in its  fiscal year 2018 Congressional Budget Justification (table 9), BOP could  only provide documentation for 1 cost savings estimate, as we show in  table 10. BOP provided documentation demonstrating the analysis for its  estimated cost savings for the initiative to contract for its dental lab  operations. BOP officials stated that BOP does not have a process to  evaluate cost savings and that evaluating all of its initiatives would be  very labor intensive. BOP officials also told us that they can sometimes  assume cost savings. For example, BOP implemented a system of  medical and mental health care levels for its institutions and inmates to  match health care needs to health care resources. According to BOP  officials, the cost control results of this initiative can be assumed;  however, in internal BOP documentation, officials acknowledge that  although the system was designed to reduce cost, its results are  undetermined. BOP officials stated that BOP does not have an automated  data system to collect and analyze cost savings data in this manner.
BOP had previously developed a process for collecting and analyzing  cost data without automated data systems. Specifically, In 2011, in  response to a DOJ OIG recommendation, BOP reported to the OIG that it  had established a four-step process to collect and analyze data to  determine the cost-effectiveness of current and future health care cost  control initiatives for which BOP has or can collect data. As part of the  process, BOP reported that it would implement the following four steps:  (1) generate an initiative for HSD and/or BOP executive staff approval; (2)  identify factors to measure an approved initiative’s outcomes and  establish benchmarks; (3) capture relevant and available program and  cost data (to the extent possible using existing data systems) on at least  an annual basis; and (4) analyze the data and produce cost-benefit  reports for HSD leadership. At that time, BOP listed seven initiatives it  could evaluate using this process, and it provided evidence to the OIG  that it had used this process to evaluate one of those seven initiatives. As  a result, an OIG official told us the OIG closed the recommendation.  However, BOP officials told us they have not continued to use this  process to determine the cost-effectiveness of its initiatives, and do not  have a process in place to determine the cost-effectiveness of its  initiatives. When we asked BOP officials about the process, as described  to the OIG, they told us that they were unaware of its existence until we  inquired about its use. Standards for Internal Control in the Federal  Government calls for management to design control activities to achieve  its objectives, including evaluations to compare actual performance to  planned or expected results. By regularly evaluating health care cost  control initiatives for which it has or can collect data, BOP would be better  positioned to determine if the time and resources it is investing to control  costs has been effective, or whether it should alter its path to achieve  better outcomes.
Some of BOP’s regions and institutions have also undertaken various  initiatives that officials described as having a cost control impact. BOP  officials told us that regions and institutions make decisions about  whether and which initiatives to implement based on institutions’ varied needs and circumstances. For example, BOP encourages institutions to  use contract guards, rather than BOP correctional officers, to supervise  inmates during treatment in community medical facilities. According to  BOP officials from some institutions we visited, the use of contract guards  can result in cost savings when compared to overtime costs paid to  salaried correctional officers. However, some institution officials told us  that security concerns and emergent medical conditions affect their ability  to use contract guards. In addition, officials from several of the institutions  we visited said they reduce inmate custody and transportation costs by  transporting inmates in groups by bus when they require outside health  care. An institution’s ability to use busing may depend on inmates’  medical needs or the willingness of community providers to accommodate  several inmates, according to officials.
Additionally, within individual institutions, some BOP officials have  developed innovative cost control initiatives. For example, one official in  an institution we visited said he had created metrics to measure and  manage health care costs, including pharmaceutical costs, as well as the  number of outside medical trips, and outside medical service costs, and  then successfully took action to quantify reductions across all three. Also,  one regional official said he created a mobile ophthalmology clinic to  provide specialty eye services to institutions throughout the region and  estimated costs savings in service charges and custody costs for each  visit. In another example, officials at one FMC we visited told us they  expanded the physical therapy program in various ways to control costs.  For example, the program offers its specialized staff to consult on cases  in other institutions, utilizes unpaid physical therapy interns, and  encourages its staff to specialize to perform procedures that would  otherwise take place outside the institution, such as electromyography,  according to officials.
BOP institutions have also sought to use technology to control health care  costs. Notably, officials at FMC Lexington said that they have a  partnership with an outside medical services provider, which provides the  institution with some advanced telehealth equipment (see fig. 6). This has  allowed it to expand its use of telehealth to more than twenty medical  specialties. For fiscal year 2015, FMC Lexington officials estimated a cost  savings of over $1.5 million due to their use of telehealth. Many  institutions have also sought to acquire other kinds of equipment to  control health care costs. For example, some institutions have purchased  or leased robotics to support their pharmaceutical operations (see fig. 7),  which has reduced the burden on staff to manually fill prescriptions and  improve operational efficiency. According to BOP officials, the use of  robotics equipment in its institutions’ pharmacies allows BOP pharmacists  to devote more time to improving patient outcomes by providing clinical  pharmacist services. Officials in another FMC we visited told us they  purchased a pressure mapping system for the institution’s wound  program to identify and prevent ulcers, which institution officials estimate  has saved nearly $2.8 million for the period covering fiscal year 2009  through 2015.
According to officials, institutions share and learn about one another’s  approaches to health care cost control through various platforms. For  example, BOP compiles its institutions’ reported cost efficiencies and  innovations, including those related to health care, in a catalogue that is  designed to be a reference to all institution managers regarding the  activities of their peers. Institution officials also share information on  health care cost control through regular conferences and meetings. For  example, officials at one institution we visited stated that they employ the  practice of having an institution nurse check on hospitalized inmates on a  weekly basis to determine if they can return to the institution to complete  their care in order to avoid custody and hospitalization costs. The officials  using this practice said they presented it at a BOP symposium where  officials from other institutions also presented their best health care  practices. Officials also told us that as BOP officials transfer from one  institution to another, they can also transfer information about health care  cost control.
section_title: BOP Has Planned and Implemented Initiatives without Considering Certain Elements of Sound Planning
paragraphs: BOP’s long-standing strategic planning process has focused in some part  on health care cost control, but BOP’s overall planning practices have not  incorporated certain elements of sound planning that we have previously  identified. These elements generally call for the identification of objectives  with a means to measure (1) progress toward objectives and (2) the  effectiveness of activities to achieve objectives. They also call for the  identification of resources and investments (as shown in table 11).
As part of its annual BOP-wide strategic plans, BOP developed the HSD  Cost Efficiency and Innovation strategic objective to “maximize health  care resources as a cost-containment strategy by applying evidence- based business practices and measuring performance through the use of  appropriate industry-wide metrics.” However, this objective does not  include measures of effectiveness or progress, such as milestones or  performance measures, which, when properly supported by reliable data,  are critical to effectively measuring improvement. BOP established this  objective in 2011 with six underlying activities it refers to as action plans.  BOP officials told us that a strategic objective is considered achieved  when the action plans are completed. However, simply completing an  action plan does not ensure progress toward the achievement of the  objective. For example, one of BOP’s action plans under its HSD Cost  Efficiency and Innovation strategic objective was to develop a  methodology for ensuring health care expenditures reflect actual costs.  BOP established nine metrics to evaluate financial performance and  marked this action plan as “complete” in 2013. However, as of August  2016, BOP officials told us that they have not been able to collect  comprehensive data for six of the nine metrics because of limitations to  BOP’s existing data systems or incomplete reporting. Moreover, BOP  officials recognized the issues with this action because they stated that  they are reconsidering the metrics they initially established. Thus, while  BOP determined it had completed this action plan, the action itself did not  produce any meaningful results. Although it is important for BOP to plan  the actions or activities that it will take to achieve its objectives, it cannot  rely only on the completion of activities to determine that it is achieving  them. Without a means to measure progress toward its objective or  effectiveness of its activities, BOP cannot reliably determine whether it is  achieving its objective or that its efforts are effective. Determining whether  or not BOP is making progress toward its HSD Cost Efficiency and  Innovation strategic objective and whether its efforts are effective will also  allow BOP management to determine what midcourse corrections may be  needed in order to meet the objective.
In addition to the annual BOP-wide strategic plan, HSD established a five- year HSD Integrated Strategic Plan for the period of 2015 through 2019,  which applies a financial management focus to every HSD branch and  section. The financial management goal, which is the same for every  HSD branch and section, is to “effectively manage the Health Services  budget through an ongoing analysis of staffing, program efficiencies, and  utilization of services to identify opportunities for current and future cost  containment.” Although HSD includes the financial management goal for  each HSD branch or section, as well as the branch or section’s  implementation strategies and expected outcomes, the expected  outcomes are generally not measurable. For example, the description of  the financial management goal for HSD’s Health Services Branch is to  “employ new strategies to contain health care costs while maintaining  quality of services” and the expected outcome is “BOP health care costs  are strategically contained.” HSD does not indicate how it will measure  progress toward its larger goal, and its expected outcome provides no  means of measuring progress. By stating that it aims to contain costs  strategically, but not including performance measures to assess the  effectiveness of activities—HSD’s planning efforts do not incorporate the  elements of sound planning we have noted. Out of the 17 HSD branches  and sections included in the HSD integrated strategic plan, only one— Pharmacy—included target benchmarks for financial management.
BOP officials told us that because BOP’s per capita inmate health care  costs are lower than the national health expenditure average per capita  costs, BOP believes its efforts have successfully achieved cost savings.  However, BOP’s health care obligations exceeded $1.3 billion in fiscal  year 2016, which is a significant portion of its nearly $6.9 billion  appropriation, and its per capita health care obligations have continued to  rise, particularly since 2013, which highlight the importance of controlling  health care costs regardless of societal trends in health care spending.  Developing goals and objectives that include a means to measure  progress would better position BOP management to assess its efforts to  control health care costs and ensure these efforts are effective in  achieving desired results.
As described previously, sound planning also calls for the identification of  necessary resources and investments. BOP officials acknowledged that  they do not systematically plan health care cost savings initiatives. As a  result, BOP has not consistently identified the necessary resources and  investments needed to implement its cost savings initiatives, or the  external factors that could affect the achievement of its goals prior to  implementation. For example, since 2011, BOP has planned to establish  a mail-order or central fill pharmacy. BOP asserted that establishing a  mail-order or central fill pharmacy would help it maximize pharmacy  resources by consolidating prescription drugs into one main inventory.  BOP reported in its Congressional Budget Justification for fiscal year  2017 that this effort could save BOP $10 million per year in inventory  costs. To implement this initiative, BOP began restructuring its  pharmaceutical operations at its care level 1 institutions, with plans to  continue doing so with care level 2 institutions. Two years later, in 2013,  BOP noted that the costs of this initiative would exceed available agency  funding and BOP would have to request additional funding from the  Congress to support the initiative. When we asked BOP officials why the  initiative had not yet been implemented, they told us that in any given year when BOP sought to implement this initiative, it had either the  funding or the space, but not both at the same time. Because BOP did not  consider necessary resources and investments when this initiative was  planned this initiative was not implemented earlier. Without consistently  identifying the investments and resources needed, BOP risks expending  unnecessary time and limited resources pursuing cost control initiatives  that eventually may fail to achieve their goal of cost control.
section_title: BOP Does Not Document Its Mission Analyses of Its Federal Medical Centers
paragraphs: BOP employs a process every 3 to 4 years that it calls its “mission  analysis,” to assess how effectively the care it provides meet the needs of  inmates having complex medical and mental health disorders in its FMCs.  BOP officials told us that they make decisions about how to allocate  resources based on mission analyses; however, BOP does not document  these analyses and therefore lacks a record to support decision-making  for its resource allocations. During mission analysis, BOP seeks to  determine how effectively its health care programs, resources, and  community-based services meet the needs of inmates, determine  priorities, assess potential efficiencies, and make recommendations for  change. To conduct a mission analysis, BOP also conducts a cost  assessment, which officials described as including a review of outside  medical trips, contracted services, elective procedures, and overtime for  escorted medical trips to community-based facilities and providers. BOP  officials stated that the cost analysis team also reviews relevant  documents with the local staff responsible for these activities, and gives  an oral report once it concludes its work. As a result of these mission  analyses, BOP institutions have adjusted or added new health care  programs. For example, FMC Butner officials stated that after a mission  analysis was completed there, BOP saw the need for, and subsequently  established, hospice care services. Also, according to BOP, the mission  analysis can provide officials with the information needed to consolidate  or shift resources from one care level 4 institution to another. BOP  recently made this kind of shift in resources in December 2016 when it  converted Federal Correctional Institution Fort Worth to a Federal Medical  Center and has already requested 36 full-time equivalents and over $4.7  million to expand and renovate the facility.
When we asked BOP for more information on how they conduct the  mission analysis process or examples of written materials that guided  their decision making, BOP officials told us they only document what  participants consider the highlights in an executive summary. For  example, the 2016 mission analysis for FMC Rochester that BOP  provided to us was an overview of its health care services and staffing,  and recommendations for consideration. While the summary included  recommendations, it did not include the analysis and findings to support  the recommendations. BOP officials stated that the mission analysis was  an opportunity for Central Office, region and institution leadership to meet  and verbally discuss the status of the institution’s missions, challenges,  resources and ongoing activities. Nevertheless, Standards for Internal  Control in the Federal Government calls for documentation as a  necessary part of an effective internal control system, which is required to  demonstrate its design, implementation and operating effectiveness.  Documenting its analyses and findings could help provide reasonable  assurance that recommendations to shift resources at its higher care level  institutions are based on sound evidence. According to BOP data, those  higher care level institutions account for a sizable portion of medical  services costs. Specifically, BOP’s six care level 4 institutions—prior to  adding Fort Worth to this list—accounted for about $350 million (or about  30 percent) of BOP’s medical services costs for fiscal year 2015 while  housing about seven percent of the inmate population.
section_title: Conclusions
paragraphs: Providing health care, including medical, dental, and mental health care,  to the federal inmate population is an important and required part of  BOP’s broader mission to safely, humanely, and securely confine  offenders in prisons. While BOP’s inmate population has fallen since  fiscal year 2014, health care costs have continued to increase in total,  and on an annual per capita basis, due in part to factors that BOP cannot  control, such as the aging inmate population, increasing pharmaceutical  costs, and increasing costs of medical care in the community. Given the  fiscal pressures facing BOP, as well as the rest of the government, it is  critical that the agency focus its efforts on factors within its sphere of  influence to ensure the prudent use of resources.
In many ways, BOP’s efforts to understand and control its costs have  been thwarted by limited data or limited applications of data already  available. Although BOP recognizes the need for health care utilization  data, and has identified a number of options for collecting these data, it  has not yet assessed the most cost effective approach for obtaining such  data. Conducting a cost-effectiveness analysis of the competing  alternative solutions, and taking steps toward implementation of the most  effective solution, would allow BOP to dedicate its resources judiciously.
Further, while BOP has engaged other federal agencies to leverage  purchasing power, it has not consistently collected and analyzed health  care spending data across its institutions. Conducting a comprehensive  spend analysis could help BOP identify additional strategic sourcing  opportunities to acquire medical goods and services more efficiently.
In addition, BOP has undertaken various initiatives to control health costs  but does not have assurance that these initiatives are achieving their cost  control aim because it has not evaluated its initiatives on a regular basis.  BOP has also not incorporated certain elements of sound planning into its  strategic health care plans, including identifying a means to measure  progress toward goals and objectives and a means to measure  effectiveness of activities. BOP also has not identified the resources and  investments needed to implement its initiatives, an additional element of  sound planning that can help ensure successful implementation. By  incorporating these sound planning elements, BOP could enhance its  planning and implementation efforts before expending resources, better  positioning itself for success as it aims to control health care costs.
Finally, when BOP sets out to make decisions about how to shift or  consolidate resources—as it does when conducting its mission  analyses—it does not document its analyses and findings to support its  recommendations for decisions about resources. Strengthening this  process would enhance its internal control system and better support the  decisions it makes.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Director of BOP take the following five actions:  1.  To better understand the available opportunities for collecting inmate  health care utilization data, BOP should conduct a cost-effectiveness  analysis of potential solutions, and take steps toward implementation  of the most effective solution.  2.  To better understand the available opportunities for controlling health  care costs, BOP should implement its guidance to conduct “spend  analyses” of BOP’s health care spending, using data sources already  available.  3.  To determine the actual or likely effectiveness of its ongoing or  planned health care cost control initiatives, BOP should evaluate the  extent to which its initiatives achieve their cost control aim.  4.  To enhance its strategic planning for and implementation of health  care cost control efforts, BOP should incorporate elements of a sound  planning approach and establish a means of measuring progress toward and  effectiveness of its activities for its current strategic objectives and  goals related to controlling health care costs; and  identify the resources and investments necessary for  implementation of its planned health care cost control initiatives.  5.  To improve the reliability and utility of its Federal Medical Center  mission analyses, BOP should document the analyses and findings  that underlie its recommendations.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOJ for review and comment. DOJ  did not provide official written comments to include in this report.  However, in an e-mail received on June 20, 2017, a DOJ official stated  that BOP concurred with all five recommendations.
BOP also provided technical comments, which we incorporated as  appropriate.
We are sending copies of this report to the Attorney General, selected  congressional committees, and other interested parties. In addition, this  report is also available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff have any further questions about this report, please  contact me at (202) 512-8777 or goodwing@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. Key contributions to this reported are listed  in appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives for this report were to examine: (1) how much the Bureau  of Prisons (BOP) has obligated for inmate health care from fiscal years  2009 through 2016 and the factors that affect BOP’s costs, (2) the extent  to which BOP has data available to understand and help control its costs,  and (3) the initiatives BOP has identified and implemented to help control  health care costs and the extent to which BOP has effectively planned its  health care cost control efforts.
To examine how much BOP has obligated for inmate health services over  the past 8 fiscal years and the factors that have affected BOP’s costs, we  interviewed officials from BOP’s Administration Division, Health Services  Division (HSD), Psychology Services Branch, and Field Acquisition  Office, as well as officials within BOP’s six regional offices and at the 10  individual BOP institutions we visited, to understand why obligations have  changed over time and the factors that have impacted those changes.  We selected the 10 BOP institutions to visit based in part on factors that  both BOP and existing research indicated could be affecting costs, as  well as other factors that allowed for variation in our sample. These  factors included the institutions’ medical care levels; their total and per  capita medical services costs; the characteristics of the institutions’  population, including gender and percentage of inmates age 55 or older;  and geography. The 10 institutions we visited encompassed all four  medical care levels, had a range of per capita medical services costs  from low to high, included both male and female populations, housed  lower and higher percentages of inmates age 55 or older, were located in  remote and metropolitan areas, and covered all six of BOP’s regions.  Although not generalizable, the visits provided important insight into how  different institution and inmate characteristics impact costs. In addition,  we reviewed key documents, such as BOP’s Congressional Budget  Justifications for fiscal years 2009 through 2018, BOP’s Annual Financial  Statements, and the Department of Justice’s Financial Management  Information System Sub-Object Classification (SOC) Code Guide.
We also analyzed BOP obligation data from fiscal year 2009 to 2016 on  medical services, psychology services, drug and sex offender treatment  programs, and medical staff training. We included 8 years of obligations  data in order to observe trends over time in health care costs. We  decided to be inclusive of all categories of health care that are considered  to be essential to treating health, which includes mental health and  substance use disorder treatment. To determine the per capita  obligations, we divided the total obligation by the inmate population at the  end of each fiscal year. To adjust the per capita obligations for inflation,  we used fiscal year 2016 as the baseline and adjusted each prior year to  2016 dollars by the Bureau of Economic Analysis and the IHS Global  Insight Outlook inflation factor. To better understand the composition of  medical services obligations, we analyzed the breakout of these  obligations by SOC code. Specifically, we used the SOC Code Guide to  understand the various codes and how they could be grouped. We settled  on five overarching categories: (1) salaries and benefits for medical staff,  as well as related employee expenses, such as work travel; (2) outside  medical care, which includes contractual medical services provided both  inside and outside of BOP institutions by non-BOP medical staff; (3)  supplies and materials, which includes pharmaceutical purchasing and  other materials used in the provision of health services; (4) equipment of  a durable nature, such as tools and implements, machinery, and  information technology hardware; and (5) other, for all obligations that did  not fit into the other categories, such as transportation of things, rent,  communications, utilities, printing, and insurance claims.
To better understand the changes in pharmaceutical obligations over our  time period, and what illnesses were impacting those obligations, we  analyzed BOP’s list of top 50 medications for fiscal years 2009 through  2016, and compared the medications to the U.S. National Library of  Medicine’s MedlinePlus list of drugs and supplements in order to  determine the uses. We compiled a list of medications used to treat  hepatitis C, cancer, human immunodeficiency virus/acquired immune  deficiency syndrome (HIV/AIDS), and psychotropic medications, which  are generally used to treat mental illness. The remaining medications  were used to treat a variety of illnesses, or were too few to create a  category. We therefore created a category of other for the remaining  medications. To assess the reliability of BOP’s obligations and  expenditures data, we (1) performed electronic data testing and looked  for obvious errors in accuracy and completeness, and (2) interviewed  agency officials knowledgeable about BOP’s budget to determine the  processes in place to ensure the integrity of the data. We determined that  the data were sufficiently reliable for the purposes of this report. Finally,  since geographic location may impact the provision or cost of inmate  health care, we analyzed BOP institutions’ proximity to hospitals. To do  this, we used geographic information services software to map the  addresses of all BOP institutions, and verify how many hospitals were  within a 20 mile radius of the institution. We created four categories— institutions that had no hospitals within 20 miles, institutions that had 1 to  5 hospitals within 20 miles, institutions that had 6 to 10 hospitals with 20  miles, and institutions that had 11 or more hospitals within 20 miles.
To examine the extent to which BOP has data available to understand  and help control its costs, the initiatives BOP has implemented and  identified to help control health care costs, and how effectively BOP has  planned and implemented these initiatives, we reviewed relevant BOP  program statements. We conducted interviews with BOP officials from the  Health Services, Reentry Services, and Information, Policy, and Public  Affairs Divisions, as well as the Office of General Counsel in BOP’s  Central Office, given their responsibilities in this arena. We also  interviewed officials from each of the six BOP regions and the Field  Acquisition Office. Further, we reviewed current Office of Management  and Budget (OMB) and BOP policies on cost-effectiveness analysis to  analyze BOP’s efforts to gather data. Additionally, for background on  correctional health care costs and BOP health care, we reviewed articles  and reports from various organizations, including the Congressional  Budget Office, Congressional Research Service, and several academic  and research institutes and interviewed researchers and economists from  some of them to understand their methodologies and explore their  findings. Further, we interviewed two correctional health clinicians from  non-federal medical institutions due to their knowledge of the aging  inmate population and telehealth. To determine the extent of available  data on BOP health care costs, we searched the Federal Procurement  Data System-Next Generation (FPDS-NG) for BOP contract actions by  institution for fiscal years 2009 through 2015 and obtained  pharmaceutical obligations data from BOP for that same period. Based on  these steps, we determined the data were sufficiently reliable for the  purposes of our reporting objective. In addition to interviews, to determine  how well BOP’s health care cost control planning mechanisms work, we  obtained and reviewed selected portions of the annual BOP-wide  strategic plans, the BOP’s HSD Governing Board Meeting Minutes  through 2015, and the HSD Strategic Plan for 2015 through 2019. To  identify BOP’s health care cost control efforts, their status of  implementation, and the extent to which BOP had conducted cost  estimates for each, we relied on the testimonial and documentary  evidence the aforementioned BOP officials provided, reviewed previous  GAO reports, Department of Justice (DOJ) Office of Inspector General  (OIG) reports, and BOP Congressional Budget Justifications for fiscal  years 2009 through 2018. We summarized this information into a data  collection instrument for verification by BOP officials and requested  additional data and supporting documentation for each. We reviewed the  information BOP provided in the data collection instrument to identify  missing or unclear information and resubmitted the data collection  instrument for BOP’s secondary verification. We also interviewed officials  from DOJ OIG and DOJ’s Justice Management Division to discuss prior  report recommendations on BOP health care costs. Further, at the 10  institutions we visited, we interviewed institution officials and observed  health care programs and cost control efforts. We also requested and  obtained several documents relating to the costs and cost savings of  regional and institutional initiatives to control health care costs.
We conducted this performance audit from February 2016 to June 2017  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Bureau of Prisons (BOP) Institutions by Medical Care Level as of March 2017
subsections: section_title: Total care level 1 institutions = 21 Care level 2
section_title: Medical care level Care level 2
section_title: Medical care level Care level 2
section_title: Total care level 4 institutions = 7
paragraphs: BOP has seven care level 4 institutions, also referred to as Federal  Medical Centers (FMC), spread out throughout the United States. The  FMCs provide care to inmates in need of more advanced medical or  mental health care. Following are descriptions for each FMC.
FMC Butner (Butner, North Carolina) is part of an FCC and serves as  a major medical and psychiatric referral center for male inmates. FMC  Butner has all specialty areas of medicine and is the primary referral  center for oncology, providing chemotherapy and radiation therapy.  FMC Butner also manages a broad range of subacute and chronically  ill inmates and has an orthopedic surgery program available. Dialysis  services are provided on-site. Butner also has an extensive inpatient  forensics program. As of May 2017, there were 927 inmates at FMC  Butner.
FMC Carswell (Fort Worth, Texas) serves as the major medical and  psychiatric referral center for female inmates. All specialty areas of  medicine are available through in-house staff and community-based  consultant specialists. As of May 2017, there were 1,171 inmates at  FMC Carswell.
FMC Devens (Devens, Massachusetts) serves both medical and  mental health care needs for male inmates. All specialty areas of  medicine are available through in-house staff and community-based  consultant specialists. Additional services provided include dialysis  treatment for inmates with end-stage renal failure. As of May 2017,  there were 956 inmates at FMC Devens.
FMC Fort Worth (Fort Worth, Texas) officially began its medical center  mission on December 7, 2016. When fully operational, FMC Fort  Worth will serve both medical and mental health needs of male  inmates. The institution will expand from 36 to 72 medical beds having  24-hour nursing care, and will include a 21-bed inpatient forensics unit  and a care level 3 Mental Health Step Down Unit Program. BOP  anticipates that all necessary building renovations and hiring of  medical center staff will be completed within 24 months of its formal  conversion to a medical center mission. As of May 2017, there were  1,492 inmates at FMC Fort Worth.
FMC Lexington (Lexington, Kentucky) serves male inmates. All  specialty areas of medicine are available by in-house staff and  community-based consultant specialists. FMC Lexington serves as  the primary referral center for inmates with most types of leukemia  and lymphoma, and performs outpatient forensic studies. As of May  2017, there were 1,356 inmates at FMC Lexington.
FMC Rochester (Rochester, Minnesota) serves as a major medical  and mental health referral center for male inmates. FMC Rochester is  the primary referral center for inmates with end-stage liver disease  and advanced HIV infection, as well as other infectious diseases  requiring long-term management. FMC Rochester provides extensive  psychiatric and psychology services, including inpatient psychiatry  services and forensic studies. As of May 2017, there were 665  inmates at FMC Rochester.
U.S. Medical Center for Federal Prisoners (MCFP) Springfield  (Springfield, Missouri) serves as a major medical and psychiatric  referral center for male inmates. MCFP Springfield provides all  specialty areas of medicine through in-house staff and community- based consultant specialists, and is the primary referral center for high  security inmates. The institution maintains extensive psychiatric and  psychological services, to include inpatient forensic studies. It is the  major kidney dialysis center for the BOP. As of May 2017, there were  1,031 inmates at MCFP Springfield.
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Joy Booth (Assistant Director);  Valerie Kasindi (Analyst-in-Charge); Dina Shorafa; Sara Rizik; Lori  Achman; Pedro Almoguera; Willie Commons, III; Eric Hauswirth; Susan  Hsu; Amanda Miller; Claire Peachey; and William T. Woods made key  contributions to this report  .