HomeMy WebLinkAboutAgenda - 06-20-2023; 8-f - Renewal of Health Services Agreement with Southern Health Partners for Medical Services at the Orange County Detention Center 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 20, 2023
Action Agenda
Item No. 8-f
SUBJECT: Renewal of Health Services Agreement with Southern Health Partners for
Medical Services at the Orange County Detention Center
DEPARTMENT: Sheriff's Office
ATTACHMENT(S): INFORMATION CONTACT:
Renewal Letter Dated April 13, 2023 for Sheriff Charles S. Blackwood,
Contract Period July 1, 2023—June 919.245.2900
30, 2024 Jennifer Galassi, Legal Advisor to the
Sheriff, 919.245.2952
PURPOSE: To approve a renewal of the Health Services Agreement with Southern Health
Partners for medical services at the Orange County Detention Center for Contract Period July 1,
2023 through June 30, 2024.
BACKGROUND: Since 2009, the County has contracted with Southern Health Partners (SHP)
to provide a structured and comprehensive medical program for inmates housed in the Orange
County Detention Center (OCDC). SHP is experiencing rising costs associated with providing
competitive pay rates to staff and inflationary costs related to supply lines and core business
insurance.
FINANCIAL IMPACT: Upon approval of the renewal, the monthly contract price will increase
$19,500.94 per year ($1,625.07 per month). The new contract price, effective July 1, 2023, will
be $409,518.48 annually ($34,126.54 per month). If the average daily population (ADP) exceeds
140 inmates, the compensation payable to SHP shall be increased by a per diem rate of $1.60
for each inmate over 140.
Other financial obligations under the Agreement remain unchanged.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this item:
• GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND
INEQUITY
The fair treatment and meaningful involvement of all people regardless of race or color;
religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic
background; age; military service; disability; and familial residential or economic status.
• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
2
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
• GOAL: CREATE A SAFE COMMUNITY
The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang
activity, substance abuse and domestic violence.
ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal
impact associated with this item.
RECOMMENDATION(S): The Manager recommends that the Board approve the renewal of the
Health Services Agreement with Southern Health Partners for medical services at the Orange
County Detention Center; and authorize the Chair to sign on behalf of the Board.
Southern Health 3
Partners
April 13, 2023
Sheriff Charles Blackwood
Orange County Sheriff's Office
106 East Margaret Lane
Hillsborough, NC 27278
Re: Health Services Agreement
Dear Sheriff Blackwood:
Southern Health Partners has been proudly partnering with Orange County since 2009. With our
contract anniversary approaching, I want to welcome you to reach out with any questions or needs. I
would be happy to speak with you if there were any areas of the contract you would like to discuss.
Being on the front lines caring for patients and serving our customers' correctional health care needs,
SHP has repeatedly confronted a range of financial and operational challenges since the outset of
the pandemic, including substantial growth in expenses across labor, drugs, and supplies, let alone
higher economy-wide inflation. Labor costs have presented a dramatic and extended wave of
challenges. Quality staffing is central to the care process and represents a significant portion of our
operating budget. With nursing shortages being what they are nationally, we have continued to
experience considerable issues with recruitment and retention of nurses, especially in perspective to
correctional work.
As we strive to ensure coverage at our facilities, we have become increasingly reliant on utilizing
current staff, Operational managers, travel nurses and agency staffing as resources for providing
coverage until we can bring on permanent team members to fill open positions. We have increased
recruitment efforts as well as added higher pay rate scales, sign-on on bonuses, and other benefits
to help attract applicants. These coverage and recruitment practices, of course, come at a much
greater cost to SHP than originally budgeted for in our contracts, as the parties could not have
foreseen such an unprecedented hike in healthcare labor costs.
Professional lines of insurance and employee benefits costs have continued an upward trend, as well
as expenses for prescription drugs. Medical supply costs are another area which has hit hard over
the past few years, considering supply chain disruptions and infection control practices/procedures
put in place to comply with governmental regulations and to assure the health and safety of patients,
and facility/medical staff. A major driver in increased medication costs has been the continued spike
in drug prices, coupled with increased utilization, treating sicker patients in the correctional
environment during and since the pandemic.
Despite persistent cost pressures, SHP has tried to price annual contract adjustments modestly over
the history of the contract. Unfortunately, our direct and indirect costs have escalated to the point of
being unsustainable without an adequate annual increase for the new contract year. We have
incorporated a 5% adjustment on the base fee and per diem rate based on continuation of the
program at the current level of staffing/services for the 2023-2024 period. The new rates are provided
for you below.
Place2030 Hamilton Blvd,Ste.140
Chattanooga,
423.553.5635(phone)423.553. .-
Southern Health 4
Partners
Sheriff Charles Blackwood
Orange County Sheriff's Office
Page 2
April 13, 2023
Contract Period: July 1, 2023 through June 30, 2024
Base annualized fee: $409,518.48 $34,126.54 per month
Per diem greater than 140: $1.60
Annual outside cost pool limits: $60,000.00 first tier ; $140,000.00 second tier
Again, please feel free to reach out to me directly with any questions at 423-553-5635, ext. 922. 1 will
ask that you keep this letter on file with your contract and return a signed copy to me at your
earliest convenience, or by May 26, 2023, for the historical contract record and to confirm the
renewal of our original Health Services Agreement dated August 18, 2009 with Orange County.
A scan to email will be fine at Jeanette.rod rig uez(absouthern health partners.corn or if you prefer
by direct confidential fax at 423-305-6964. If this letter is not signed in a timely manner, then
billing will be prorated back to the contract inception date. Except as stated herein, or as may
be amended or modified in writing by mutual agreement of the parties, all provisions of the contract
will remain in full force and effect.
We appreciate the support and resources provided by our customers, and we will continue to look
toward mutually beneficial solutions in partnership together so that SHP can stay strong in providing
high-quality care to the patients we serve.
Sincerely,
SOUTHERN HEALTH PARTNERS, INC. ORANGE COUNTY, NC
BY:
Jeanette Rodriguez
Contracts Administrator
cc: Chief Deputy Jamison Sykes
Jennifer Galassi, Legal Advisor