Education Funding Policy Systems

Jail Costs versus Hospital Costs.

We received the State of Washington Voters’ Pamphlet in the mail today. One of the initiatives, I-1401, concerns “trafficking of animal species threatened with extinction”.

Have no fear: This post is unrelated to trafficking of animal species threatened with extinction.

The “Fiscal Impact Statement” includes a statement about jail costs (highlighted for emphasis):


“No wonder why people with psychiatric conditions end up in jail!” I exclaimed. “It’s so much cheaper for them to be there!”

Information about hospital costs are public. This page shares inpatient hospital rates for people who have Medicaid insurance in August 2015. All the hospitals in Washington State are listed in the leftmost column. One of the columns has the title “Psych_ Per Diem”. That column tells you how much money each hospital is paid if a patient with Medicaid is admitted there for psychiatric reasons. First, you will note that hospitals are paid[1. Forgive the passive voice when I write “hospitals are paid”. In Washington, hospitals send bills for Medicaid patients to the state. The state pays the hospital bill. The state then turns around and sends a bill to the region that the patient “belongs” to. The region then pays that state bill. The region gets money to pay that bill from a mix of federal and state Medicaid dollars, which ultimately come from taxpayers. Confusing, right?] different amounts. That alone is fascinating—what accounts for that? who decides how much money each hospital will receive?

More to the point, it costs anywhere between $711.55 and $1788.93 per day for an adult with Medicaid to stay in a hospital. The average cost of incarceration in Washington is $88 per day. Thus, it is at least eight times cheaper for someone to stay in jail than in a psychiatric hospital.[2. This page shares inpatient hospital rates for people who don’t have any insurance. Note that the rates are lower compared to the Medicaid rates. They are nonetheless still much higher than the daily jail rate.]

On the one hand, the differences in cost aren’t surprising: Hospitals often have more staff, equipment, and services. On the other hand, we also know that jails are often the largest psychiatric hospitals in any given region. For example, in Seattle, the jail has about 120 psychiatric beds. The largest psychiatric hospital in Seattle has about 61 beds.

I really want to believe that no one intentionally designed the system this way. Surely no person or system could be so heinous and miserly to funnel people into jail instead of a psychiatric hospital. Right?


But, then the disgust kicks in: What if the costs were reversed? What if it cost $88 a day for someone to stay in a psychiatric hospital and $712 a day for someone to stay in a jail? Would we see as many people with psychiatric conditions in jail? Of course not.[3. To be clear, we should also help people stay out of psychiatric hospitals, too. Inpatient services should be available if people need them, but let’s focus on prevention and help people stay in their communities. Being in a hospital generally sucks.]

It shouldn’t be all about money, but when the cost differences are that big, money has undue weight. If we actually want to help people with psychiatric conditions, we must pay for services. Otherwise, we will only see more and more of them in jail.