A private health provider being sued over the death of Indigenous woman Veronica Nelson in custody has lost its contract for Victoria's two women's prisons.
Primary health services at Melbourne's maximum security Dame Phyllis Frost Centre will transition from Correct Care Australasia to Western Health from July 1.
Dhelkaya (Castlemaine) Health will also take over from Correct Care Australasia at Tarrengower Prison, a minimum security facility near Bendigo.
Victorian Corrections Minister Enver Erdogan said Western Health and Dhelkaya Health's close proximity to the facilities and ability to meet female prisoners' distinct needs were key to the services securing the contracts.
"We want to avoid people coming into contact with the justice system in the first place but for those who do, the system has a duty of care to look after them and help them get their lives back on track," he said on Friday.
"We recognise in the past this hasn't always been the case for women in custody - a more tailored and appropriate standard of health care is needed."
An inquest into Ms Nelson's death at the Dame Phyllis Frost Centre in January 2020 heard she screamed for help for hours before she was found dead in her cell.
The Yorta Yorta woman's partner of 20 years, Percy Lovett, launched a wrongful death lawsuit against the state of Victoria, Correct Care Australasia and three others earlier this month, alleging her death in custody breached human rights.
Coroner Simon McGregor is scheduled to hand down findings into Ms Nelson's death in late January.
An incredulous Mr Lovett said the decision showed how bad health care was at the women's prison in Ravenhall and "how bad these companies are".
"I can't believe it," he said.
"I hope this means that things will be better for the other women in prison and that what happened to Veronica never happens again.
"Blackfellas also need Aboriginal health services. It's hard for us to talk to the officers and people inside."
The incoming providers will have designated Aboriginal health roles, with all First Nations people entering custody to undergo a health check to develop a tailored care plan.
Victorian Aboriginal Legal Service chief executive Nerita Waight said the changes were a momentous first step towards bringing prison health care into line with the broader community.
"Prison health care in Victoria is in a state of emergency," she said.
"We speak to clients daily about poor quality health care in prisons.
"Four Aboriginal people have died in Victoria's prisons since Veronica Nelson."
Ms Waight said the next step for the Victorian government was to rid private healthcare companies from all public-run prisons in the state.
"Private for-profit corporations have no place in providing health care to Aboriginal people," she said.
Correct Care Australasia declined to comment.
It comes after US-owned contractor GEO Group last week announced it had signed a five-year deal with the Victorian government for its Australian subsidiary to deliver primary health services across 13 men's prisons.
The contract was previously held by Correct Care Australasia, which was part of GEO's Australian subsidiary before being bought by US-based Correct Care Solutions - now known as Wellpath - in 2014.
Senior minister Lily D'Ambrosio refused to speculate on whether the government would consider ending private health care in men's prisons when the contract expires.
Victorian Greens Leader Samantha Ratnam said the government must set its sights on further justice system reforms, including raising the age of criminal responsibility to 14 and fixing bail laws.