The criteria for assessing feasibility were ease of implementation, effects on the quality of service delivery, and costs to the Federal government. A number of officials at the Bureau of Prisons were interviewed to determine how services are currently being delivered. On-site inspections were conducted of three hospitals in the system. Researchers also collected and analyzed data pertaining to budgets, expenditures, use, staffing, and the organizational structure of the referral centers. Relevant literature was reviewed, and State and local governments' experience with the privatization of health services was examined. The study concludes that contracting for total managerial and operational responsibility of an entire prison hospital is not feasible, because each of these facilities is but a division of a larger prison with which it shares services and staff. The transfer of ownership of any prison hospital is also deemed infeasible, given the absence of competitive industry for operating prison hospitals; the likelihood of thereby creating a monopoly provider is too high. 19 tables and appended supplementary information