Monday, July 12, 2010

Double Dose: Wells Fargo and Alaska Regional Hospital

Neil Davis has been on the trail of some interesting, and rather peculiar, wrinkles in the State of Alaska's new AlaskaCare health plan administration. Wells Fargo Insurance Services is the current administrator of AlaskaCare for the state, and something is fishy in their new choice of preferred provider. In an early release of the June Dose of Reality, Davis describes the document that tweaked his curiosity about the recent change from a nonprofit, Providence Hospital, to a for-profit, Alaska Regional Hospital:
The reason for the change in preferred provider, the Wells Fargo document implies, is to save money. In support of that idea the document contains a table showing dramatically different costs for medical procedures undertaken at Alaska Regional Hospital and Providence Hospital, both in Anchorage. This is the fishy part: the cost figures given are so different for the two hospitals that something has to be wrong and probably purposely misleading.…Having previously looked a bit at the pricing structure and markups over cost of these two hospitals, I could not accept the idea that to be treated at Providence, on average, costs AlaskaCare members 3.4 times as much as at Alaska Regional.
Following up on this for the July Dose of Reality, Davis discovered that Wells Fargo and Alaska Regional's parent company have a long history together. And that history reveals some shady dealings:
Among the allegations that led to Columbia/HCA’s guilty plea and payment of fines were that Wells Fargo CEO Carl E. Reichardt and four other directors of Columbia/HCA were fully aware that senior management had “devised schemes to improperly increase revenue and profits, and perpetuate a management philosophy that provided strong incentives for employees to commit fraud.” Reichardt and the other four also were charged with knowing about HCA’s improper acquisition practices, which involved offering personal benefits and perquisites to hospital executives during HCA’s negotiations for the purchase of their hospitals.

Dose of Reality: Discount Health Cards

Neil Davis' May Dose of Reality offering features an analysis of discount health care cards (a bad deal). Davis' attention to this middleman scam in the health care business was drawn by a full-page ad in the Ruralite, GVEA's member magazine. The ad, Davis decided, is deceptive and close to fraudulent. The skinny on discount cards boils down to this:
If you look into the matter you will find that the best approach is to forget the discount cards altogether. A discount card is not likely to get you a discount greater than 10 percent, and if you are not insured you can probably do better by paying cash right away every time you go to the doctor or hospital.