Jailhouse Medicine - A Private Contractor Flourishes Despite Controversy Over Prisoner Deaths

by Brian Joseph, FairWarning

In July 2011, a jailhouse nurse in Imperial County, California found prisoner Marsha Dau lying naked and dazed on the concrete floor. Charged with illegally transporting aliens, Dau, 58, recently had been exhibiting strange and aggressive behavior. For her own safety, the jail put her in an empty, beige cell with no clothes. Now, three days later, she was on her back, semi-conscious and pale.

The nurse who found her was Elisa Pacheco, an employee of the California Forensic Medical Group, a private company that provides correctional medical services to rural counties like Imperial, near the Mexico border. Pacheco later would testify Dau looked dehydrated. But she didn’t treat it as an emergency.

Rather than call an ambulance – which the company said would have cost several hundred dollars – Pacheco, in her testimony, acknowledged that she instructed guards to get Dau to a hospital in 30 to 40 minutes. Two guards dressed Dau in orange shorts, a yellow shirt and a yellow jumpsuit, then chained her to a wheelchair. As they wheeled her to a van, Dau’s head slumped forward. One of the guards later remembered her colleague saying Dau “looks dead.”

That comment, recalled in a deposition, would come to haunt California Forensic. Months after that July day, Dau’s hospital trip became the subject of a lawsuit, one of more than 80 filed against the company since 2000. The state’s largest private correctional health care provider, California Forensic, or CFMG, is a growing regional power in an obscure, multi-billion-dollar industry. It contracts with 27 California counties, overseeing the health care of some 13,000 prisoners of jails, juvenile halls and other detention facilities. CFMG and a new sister company recently secured contracts in New Mexico, Arkansas and Oregon, and they have their sights set on expanding into Texas, Colorado and Washington, among other Western states. But like other private correctional medical companies, CFMG has been accused of providing negligent care that puts profits before people.

Several county grand juries have investigated the company and faulted its practices. “CFMG staff failed to identify and treat symptoms of methadone overdose,” a Santa Cruz County Grand Jury found after a prisoner died in November 2012. A grand jury in Sonoma County concluded CFMG protocol “lacks the formality and specificity” necessary to identify prisoners at risk for alcohol withdrawal syndrome. When a prisoner in alcohol detox died in August 2012, the Ventura County Grand Jury recommended that the jail consider replacing CFMG “to ensure standards of care are met and carried out.” (The county stayed with CFMG, but is considering other providers when the company’s contract expires in January 2016.)

About 200 California prisoners have died under CFMG care since 2004, according to a FairWarning analysis of state Department of Justice records. For the 11-year period that ended in 2014, FairWarning found that where CFMG provided both medical and mental health services, jails had a slightly higher mortality rate than other county lockups. The CFMG rate, excluding homicides, was 1.7 deaths annually per 1,000 prisoners. The rate for non-CFMG jails was 1.5 deaths per 1,000 prisoners. CFMG says the gap is “not meaningful” because of differences in the types of jails compared and in the demographics of the prisoners.

Push for Privatization

The outsourcing of medical care in jails and prisons reflects a nationwide push for privatizing government duties. The private sector, outsourcing advocates say, offers better services at a lower cost. But while other government services have outspoken constituencies, jails and prisons do not. Prisoners usually have little clout to demand change if they believe they are receiving poor health care.

“Society doesn’t really care about prisoners,” said Neville Johnson, a Beverly Hills lawyer. Johnson sued CFMG and Yolo County, near Sacramento, over the August 2000 jailhouse suicide of Stephen Achen. A drug addict, Achen warned some jail staffers that he could become self-destructive but promised another that he wouldn’t hurt himself. “As we got into it, we were astonished at what we felt [was] the deliberate indifference of the jail staff and especially CFMG, which is nothing but a money-making machine,” Johnson said. CFMG settled with the Achen family for $825,000 after a judge found evidence of medical understaffing, according to media reports.

The private sector started providing health services to jails and prisons in the 1970s, when negligent medical care became a foremost prisoners’ rights issue. Prisoners across the country filed lawsuits alleging inadequate care. Courts ruled that depriving prisoners of competent medical services was unconstitutional and in some cases ordered states and counties to take corrective action. Wardens and sheriffs, lacking backgrounds in medicine, turned to outside contractors for help.

In California, substandard medical care in state prisons led to a 2006 federal court ruling putting prison health care and spending under the authority of a federal overseer. Recently, responsibility for prisoner health care at Folsom State Prison was transferred back to the state corrections department, and the court-appointed overseer said that in the wake of improvements in prisoner care he planned to restore authority for more of the state’s 33 prisons in the coming months. The California prison system, other than sometimes contracting with medical specialists, does not outsource its health care services.

When private providers like CFMG receive any attention at all, it’s usually because a prisoner has died. But industry experts say outsourced services are often no worse than the care provided by the government. “Whether a jail health care system is being run by the county or whether it’s been outsourced to a private company, my experience is in both cases it’s underfunded,” said Marc Stern, a former health official with the Washington Department of Corrections who now teaches at the University of Washington. Prisoners are more likely than the general population to have chronic or infectious diseases, and many take medications.

Today, experts estimate that roughly 40 percent to 50 percent of the more than 2.2 million incarcerated Americans receive their health care from contracted providers. Some large state prisons outsource their medical care to university health systems, but most contracts in the sector are handled by private businesses like CFMG or Corizon Correctional Health Care, the largest provider in the nation. Industry insiders say private correctional health care firms typically have a profit margin of about 8 percent on contracts that pay them either a flat fee per prisoner or reimburse them for costs plus an administrative fee. Critics say flat fee contracts give companies, including CFMG, an incentive to skimp on care. Company executives declined to discuss profitability or other financial information.

Plaintiff lawyers such as Steven Yourke of San Francisco, who has settled two suits filed against CFMG, are sharply critical. “Based on the cases that I have done, I have a pretty negative impression of this company,” Yourke said. He filed one suit for the family of Craig Prescott, a prisoner who, according to the complaint, exhibited “delusional” behavior for half a week in Stanislaus County jail before dying after a scuffle with guards in 2009. Yourke said the company should have done more for the prisoner, a common complaint among lawyers who have sued CFMG.

The company dismissed the Yourkes’ claim, saying its staff knew Prescott as an aggressive prisoner. CFMG executives routinely reject accusations against the company as ill-informed and insignificant. They say CFMG has never lost a civil trial in its 32-year history and that most settlements it pays are small. “I think that the most important thing to us is providing quality service,” said CFMG Chief Operating Officer Elaine Hustedt, who founded the company with her husband, Dan, and psychiatrist Taylor Fithian in 1983. Indeed, the company receives high marks from some cash-strapped California sheriffs who oversee county jails. “CFMG offered more services at a lesser cost than our old system,” former Santa Cruz County Sheriff-Coroner Phil Wowak wrote in a recommendation letter for the company.

Hustedt said personal relationships are the backbone of CFMG’s business strategy. She described the company as a family, where employees stay for a decade or more. CFMG touts a nurse turnover rate of less than 10 percent a year – below the average attrition for hospitals. “We have a staff that really cares about what they do. We want to do the right thing,” Hustedt said.

In fact, that’s CFMG’s corporate motto: “Always do the right thing.”

A Troubled Life

Marsha Dau concealed a struggle with addiction beneath makeup and a playful, gentle spirit. A petite woman with an oval face, dyed blonde hair and false teeth, Dau was a “hippie in high heels,” as her sister called her. She favored polka dot skirts, studied Native American beliefs and collected gems. Twice divorced and childless, Dau lived in Cathedral City, near Palm Springs, where she cared for her elderly mother. “She was about the best daughter a person could have,” Dau’s mom, Ruth Ann Hall, later testified in the family’s suit against CFMG.

But Dau had problems – namely an addiction to pain killers that she developed following a motorcycle crash in her teens. For most of her life, Dau kept it together, but things started to unravel around 2009 when she was working as a bus driver. One day, she saw a man get hit by a car and thrown onto her bus. According to Dau’s sister, the experience traumatized Dau so much she left her job, leaving her with little money to care for their mother.

On June 30, 2011, U.S. Border Patrol Agents near Westmorland, east of San Diego, stopped Dau as she was driving a blue 2009 Toyota Camry. Two Mexican nationals were found in the trunk, along with methamphetamine in the car, according to a criminal complaint. Dau admitted the drugs were hers and said she was being paid $800 to transport the men after they had illegally crossed into the United States.

Dau was booked into the Imperial County jail at about 3:30 a.m. the next morning. A medical intake form filled out at the time noted she suffered from fibromyalgia and panic attacks, had a history of lung cancer and once had surgery to remove part of her lung. (On a subsequent medical history form, Dau would reveal she also had one functioning kidney and a history of Hepatitis C.)

For anxiety, Dau reported taking prescription Valium, as well as medication for chronic pain. CFMG’s contract physician in Imperial County ordered Dau to partially replace her pain meds with Tramadol, the dosage for which he later tripled, according to medical records and legal filings. Tramadol can cause agitation or confusion in patients. Meanwhile, Dr. John H. Baker, Jr., CFMG’s contract psychiatrist, ordered Dau to cut her Valium dosage in half, then stop taking it after a few days, according to evidence presented in court. Patients who stop taking Valium also can experience anxiety or psychosis.

Nearly two weeks later, Dau started exhibiting “bizarre behavior,” according to nurses’ notes. One day a CFMG nurse found Dau naked in a cell where she was permitted to wear clothing. The floor was covered in urine, her clothes stuffed in the toilet, covered in feces. Dau also had feces on her back, buttocks and feet, which she didn’t seem to know. “Many days just run together and I don’t know if I should still be here,” Dau told the nurse, who recorded the incident, but, according to court records and deposition testimony, never contacted a physician.

A few days later, Baker, the psychiatrist, saw Dau via video conference. Baker would later testify that he primarily provided psychiatric services to eight CFMG jails this way, seeing as many as 140 prisoners in a single week. Because he saw prisoners remotely, it was Baker’s practice to rely on nurses to tell him what was in their charts. He would testify that he couldn’t remember if he knew Dau was taking Tramadol.

That day, Baker later testified, he decided Dau could be experiencing a psychosis related to her previous meth use. He prescribed her an anti-psychotic and another drug to reduce the side effects of the anti-psychotic.

Dr. Paul Appelbaum, a professor of psychiatry at Columbia University and a former president of the American Psychiatric Association, told FairWarning that psychiatrists rarely see 140 patients in a week, but it’s standard for one practicing telemedicine to rely on nurses to review patient charts. The nurse who aided Baker that day later testified she couldn’t remember if she knew about Dau’s recent behavior, but said she doesn’t always have the time to look at notes like that.

Dynamic Growth

CFMG’s first contract, in 1984, was with Monterey County, where the company is based. Early on, CFMG sought to differentiate itself from its competitors by offering its services only to county facilities, not to state prisons. The strategy paid off as over the years CFMG came to dominate the market in California.

In 2012, the private equity firm H.I.G. Capital purchased about 80 percent of the company with designs on exporting CFMG’s brand of correctional health care. Since then, it’s launched a sister company, the Southwest Correctional Medical Group, to lead the expansion, although CFMG also is seeking contracts outside of California. “We feel really proud of what we do and felt like we almost had an obligation to go someplace else,” said Kip Hallman, CEO of the sister company. Today, CFMG and its sister company employ more than 900 people, mostly nurses. They also contract with 20 dentists, 11 psychiatrists and 52 other doctors.

For much of its history, CFMG has remained out of the spotlight, but that’s starting to change. A grassroots protest group in Santa Cruz called Sin Barras, Spanish for “without bars,” has held public demonstrations calling for the local jail to end its contract with CFMG. The group has been protesting ever since four prisoners died in short succession after CFMG arrived in 2012.

Meanwhile, CFMG recently negotiated a preliminary settlement in a high-profile, class-action lawsuit over conditions in Monterey County. The settlement requires CFMG to make several improvements to the medical services at the jail, although the company admitted no wrongdoing in the case. Among the listed plaintiffs was Wesley Miller, a prisoner with Type 1 diabetes who, according to the suit, was improperly administered insulin by a CFMG employee in February 2013. According to the complaint, Miller nearly died from the injection, a contention that CFMG disputes.

“This company should be taken out. They should not be allowed in any institution in the world,” said Valerie George, whose son died of complications from sickle cell anemia while under CFMG care in Sonoma County. Ryan George, age 22, was serving time for domestic violence in 2007 when he experienced the onset of a sickle cell crisis, a painful, but treatable, condition where blood vessels become clogged by the misshapen cells. For days, Valerie says, Ryan called her from jail in obvious pain, complaining that he was being neglected.

Finally, when he was found “unresponsive” in his bed, Ryan was taken to the hospital, according to court records. But after a couple of days of treatment, doctors there decided Ryan was exaggerating some of his symptoms and sent him back to jail. Shortly thereafter, Valerie said, a CFMG doctor called her, saying Ryan was getting worse. She says she demanded that the doctor take him to the hospital, but he said “that’s not a possibility.”

The company doctor acknowledged in court papers that he spoke with Valerie George, but disputed her version of what was said. CFMG executives also acknowledged that the company would have incurred more costs if Ryan was sent back to the hospital, but denied that financial concerns had anything to do with his death.

Failing to Intervene

A few days later, Ryan George was found dead in his cell, with dark green fluid oozing from his mouth and eyes, according to the civil complaint. A subsequent Sonoma County Grand Jury investigation found that the “Sheriff’s [department] and CFMG medical staff failed to fully intervene” when Ryan’s condition worsened. “He was not re-hospitalized, despite exhibiting symptoms of jaundice, severe dehydration, bone pain, altered level of consciousness and loss of urinary and bowel control,” the grand jury found. Said Valerie George, whose family settled with CFMG: “They let him die like a dog in a cage because this company would not pay for him to get proper medical treatment.”

Former CFMG employees interviewed by FairWarning were largely complimentary about the company. Cheryl Sumers, a licensed vocational nurse who worked for CFMG in El Dorado County, near Sacramento, said she “never saw anything bad” during her time with the company, from 1998 to 2005. “They were a good company to work for. They took care of their employees. They paid well,” she said. Colleen Patten, a former administrative assistant for CFMG in Sonoma County from 2003 to 2009, agreed. “Sometimes the workload was pretty heavy,” she said, but it was no different than a busy hospital. Patten said she was “envious” of the prisoners for how quickly they received medical care.

Dana Hudgins, a former licensed vocational nurse for CFMG in Ventura County from 1999 to 2006, said the company provided good medical care for most of the time she was with them, until the last six to eight months. That’s when a new nursing supervisor came in. Hudgins said this new supervisor replaced nurses with unqualified medical assistants. Prisoners who once received their medications within hours of being admitted now had to wait three days. “I didn’t like the situation it was coming to,” said Hudgins. “I felt it could become a potential lawsuit.” A CFMG spokesman said Hudgins was fired for performance issues and was not credible, but Hudgins denied she was fired, saying she left for a better job.

One of the most recent prisoners to die under CFMG care was 33-year-old Jacob Parenti, who, according to his family, was serving a one-year term in Monterey County for a probation violation for possessing marijuana. According to court records, fellow prisoners noticed he had stopped breathing and turned a bluish color on the morning of January 15, 2014. His cause of death has been officially ruled a drug overdose, but his half-sister, Amy Vye, says she’s spoken with prisoners who said her brother died of a horrible flu that swept through the jail. “Jacob was left to die of a treatable, jail-acquired illness, one for which basic medical intervention could have saved his life,” Vye wrote in an email. In court filings, CFMG said Parenti submitted a slip saying he had the flu, but the company denied that he died from it.

Vye says prisoners told her that Parenti was coughing up blood for days and twice requested medical care, but was ignored until it was too late. Her family, which is suing CFMG and the county, commissioned an independent autopsy that found Parenti died of the flu. “At no point did any CFMG employee ever respond in any way to my brother’s prolonged and preventable death,” Vye said in an email.

“They Just Rolled Right Over Us”

“Why wasn’t an ambulance called?” a guard later recalled someone asking when he wheeled a pale Dau into El Centro Regional Medical Center at about 9:30 a.m. on July 23, 2011. A doctor rushed to her side and felt her neck. “She has no pulse!” the doctor yelled, according to a deposition given later by the physician. Hospital staff cut off her jumpsuit and attempted CPR, but it was no use: at 9:56 a.m. Dau was declared dead.

A subsequent autopsy by Imperial County Chief Forensic Pathologist Darryl Garber determined Dau died of heart disease with a contributing factor being acute drug intoxication from the multiple medications she was prescribed. Garber also discovered Dau had a bed sore on her lower back, suggesting that she had been unable to move for some time.

Later, according to the minutes from a meeting about Dau’s death, CFMG and jail staff decided that an ambulance should have been called and that Dau was “probably” going through Valium withdrawal. In March 2015, the California Board of Registered Nursing brought incompetence and gross negligence charges against Elisa Pacheco, the nurse who acknowledged saying it wasn’t necessary to call an ambulance. She still works for the company. CFMG executives declined to speak about specifics of the case or to make Pacheco or the psychiatrist, John Baker, available for an interview, citing the Board’s pending action to revoke the nurse’s license.

Ruth Ann Hall, Dau’s mother, sued Imperial County and CFMG in federal court in February 2012, but died herself before the end of the year. Dau’s siblings pursued the suit in her place, taking the case to trial in July 2013. But just before the proceedings, the lawyer for the family said, CFMG told Dau’s brother and sister that if they lost in court the company would seek tens of thousands of dollars in fees from them. Scared, the family reached a confidential settlement with CFMG during the trial. CFMG denies that it made any threats, saying that it’s not unusual for losing plaintiffs to pay fees. When pressed about the case, company executives said “it was settled very much in our favor” but refused to elaborate.

“We were nothing. They just rolled right over us,” said Dau’s sister, Rebecca LaRue, who described suing CFMG as the scariest thing she’s ever done. She says she’s let go of her anger, but talking about Dau still brings her to tears. “My sister was a beautiful human being,” LaRue said. “I mean, she made mistakes. She deserved to pay, somehow. But not with her life.” 

This article was published on July 15, 2015 by FairWarning, and was accurate at the time of publication. It has not been updated to reflect changes that may have occurred since. Reprinted with permission.