Here’s a new twist on outsourcing: housing U.S. inmates in Mexican prisons.

This week, California Governor Arnold Schwarzenegger suggested that the state might outsource incarceration by opening prisons in Mexico in order to house jailed undocumented immigrants.

Sfgate.com reports the governor saying, “We pay them to build the prisons down in Mexico and then we have those undocumented immigrants be down there in a prison. … And all this, it would be half the cost to build the prisons and half the cost to run the prisons.”

Of the state’s 171,000 prisoners, approximately 19,000 are illegal immigrants. The state spends more than $8 billion a year on the prison system. Schwarzenegger predicted housing prisoners in Mexico instead of California would save the state $1 billion that could be spent on higher education.

The idea has a certain logic: Under the terms of the 1977 Prisoner Transfer Treaty between the United States and Mexico, United States prisoners in Mexican jails and Mexican prisoners in United States jails may choose to serve their sentences in their home countries.

But there’s a definite taint of “let’s send the illegals back where they came from” anti-immigrant sentiment in the governor’s comment. Beyond that, it’s just a very odd idea. When one breaks the law within a given set of borders, it makes sense to be punished within the limits of that same country. Each country has its own philosophy of crime and punishment. Mexico tends to have longer waits for sentencing, for instance, but shorter prison terms.

And though there’s no yelp.com for prisons around the world, it’s pretty clear that Mexican prisons aren’t known to be models of modern and humane incarceration.

An analysis of Mexican prison conditions (drawing from The Library of Congress Country Studies and the CIA World Factbook) concludes that “overcrowding of prisons is chronic. Mistreatment of prisoners, the lack of trained guards, and inadequate sanitary facilities compound the problem. The United States Department of State’s country reports on human rights practices for 1992 and 1993 state that an entrenched system of corruption undermines prison authority and contributes to abuses. Authority frequently is exercised by prisoners, displacing prison officials. Violent confrontations, often linked to drug trafficking, are common between rival prison groups.

In fact, just this week, a prison riot in the Mexican state of Durango left 23 inmates dead.

Female inmates in Mexican prisons are allowed to have their children under 5 live with them in prison. Photo: Caroline Bennett

Not that Mexico suffers in every prison-related comparison. The U.S. enjoys the dubious distinction of having the highest incarceration rate in the world. And Mexico has some prison policies that are more humane than those in the U.S. For example, women inmates are allowed to have their children under 5 live with them in prison. The Huffington Post recently published a photo essay on Mexican Prison Life: Babies Behind Bars.

Even if the prisons in Mexico were built and run by the U.S., Schwarzenegger ’s idea would still be problematic. Donald Specter, director of the Prison Law Office, said it “would be like the state of California having a separate island of its own government in Mexico. It just seems like that would be impossible.”

The not-so-sweet spot where privatization meets outsourcing

Schwarzenegger’s suggestion sits at the intersection of privatization and outsourcing. Earlier this month, our my-governor-can-beat-up-your-governor called for allowing private companies to compete with state-run prisons, which he claims would save billions of dollars.

And beyond privatization, it seems that in this era of free trade in a global economy, everything’s on the table for possible outsourcing: manufacturing, telephone help centers, retirement, medical care, and now, imprisonment.

What’s next—the outsourcing of education? Maybe public school would be more viable if you only had to pay teachers a few dollars an hour. And how about outsourcing funeral services? We could send our loved ones abroad for cut-rate embalming, Fed Ex them back to the local cemetery, then hire illegal immigrants to help us mourn.

Individuals saving thousands of dollars by having elective surgery abroad is just part of the story. More and more U.S. insurance companies are providing a medical tourism option for their clients. A recent USA Today article reports that “The four largest commercial U.S. health insurers — with enrollments totaling nearly 100 million people — have either launched pilot programs offering overseas travel or explored it. Several smaller insurers and brokers also have introduced travel options for hundreds of employers around the country.”

In addition, the very fact that the medical tourism option exists fosters healthy competition, allowing U.S. insurance companies (or whoever ends up being our ‘provider’) to negotiate better rates on procedures right here in the United States.

USA Today reports that “Shortly after Hartford, Conn.-based Aetna Inc. and the Maine-based grocery chain Hannaford Bros. Co. launched a program to send patients to Singapore for hip and knee replacements, some New England hospitals countered with their own deals. So far, three patients have benefited from the competitive pricing; Hannaford has sent no one overseas, even though the program pays travel and lodging costs.”

Everywhere you look, newspapers and magazines are reporting on Americans going abroad for elective procedures and saving thousands, or even tens of thousands of dollars. For example,

Elizabeth Kunz of South Carolina needed eight crowns, a filling and a root canal. Though she had insurance, the procedures would have cost around $10,000 in the U.S. Her insurance company, BlueCross BlueShield, said they’d pay for her to see a dentist in Costa Rica. She booked a trip. The work cost her $2,800.

Ben Schreiner, 63, also of South Carolina, was going to wait until he turned 65 (and qualified for Medicare) to have his hernia surgery. Without Medicare, but with his current medical insurance, he would have had to pay a $10,000 deductible. After hearing about medical tourism, he did some research, and then flew to Costa Rica for the surgery. He ended up spending $4,400, including travel expenses.

Some say that medical tourism is not yet common enough to play a role in health care reform. Paul Keckley, executive director of the Deloitte Center for Health Solutions, estimates that medical tourism spending accounted for no more 1% of the $2.36 trillion spent on health care in the United States in 2007.
But the practice is on the rise. And knowing that many Americans must go abroad to afford the medical care they need gives the push for health care reform even more urgency.

Photo by Erin Van Rheenen: Children’s examination room, at Hospital CIMA in Escazú, Costa Rica.

More information on healthcare in Costa Rica.

1. Johannesburg, South Africa
2. Monterrey, Mexico
3. Asuncion, Paraguay
4. Karachi, Pakistan
5. Wellington, New Zealand (pictured)

Above are the 5 least expensive cities for expat living, according to consultant firm Mercer UK.

The survey covers 143 cities across six continents but concentrates mostly on Europe,  Asia, and the Middle East.  The only countries in the Americas covered, for example, were the U.S., Canada, Mexico, and Brazil. Mercer looks at more than 200 factors, including the cost of housing, transport and food.

Note that just because a city is cheap for expats doesn’t mean it’s cheap for native residents. In Johannesburg, for instance, costs are rising for local residents, with even basics such as bread becoming more expensive.