Privatization could save some money at API, not at youth centers

Alaska’s state government can save money by privatizing some services at the Alaska Psychiatric Institute, or API. But it doesn’t look like it would save if it privatized all services.

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Consultants who studied the privatization for the state found that management of the institute, as well as operating the state’s juvenile justice detention centers, are better done by the state.

Coy Jones is the senior consultant for Public Consulting Group and said savings depend on how many patients are at the psychiatric institute.

“We definitely made some recommendations where there are some limited cases of privatization that we would recommend implementing,” Jones said. “They’re easy to do, and they will generate some cost savings.”

For example, the consultants recommend there could be savings in privatizing the institute’s communication center.

But a different consultant that looked at youth detention centers couldn’t find any opportunities for privatization.

Consultant Carl Becker of CGL – a consulting company that specializes in corrections — said local organizations operate juvenile facilities in other parts of the country. But local organizations weren’t interested in operating the facilities in Kenai, Nome and Palmer.

We found basically no private or governmental in any of these regions that had either the interest or the capability to operate standalone detention facilities for these youth,” Becker said.

The state also couldn’t find savings in privatizing pharmacy services at Pioneer Homes.

The state studied privatizing services as a result of a new law that overhauled Medicaid in Alaska. The Senate Health and Social Services Committee held a hearing on the studies Monday.