The public pays. Evidently the private medical company pays at least part of the law suit damage when they fuck up. Prisoners are the consumers and their needs probably come long after budgetary concerns. I have trouble thinking of a market system beyond the provider getting a bonus for things like low death count (it might work). I wish that someone would do a pilot program where private prisons got a hefty bonus payment if they reduced recidivism. Not likely to happen knowing what I know about funding of recidivism programs in general. Police should have to carry their own liability insurance. Give every cop a raise amounting to the cost of the average officers policy and let the bad officers price themselves out of the market for police work.