Dose of Reality: Teamsters Tango with Alaska Regional Hospital

In the latest in his investigation of Wells Fargo, the State of Alaska, and the sudden status of a for-profit hospital as preferred provider, Davis delves in to Alaska Regional Hospital's history.

…the present hospital was actually built and owned by Teamsters Union Local 959 in 1976. It is easily understandable why the hospital’s website does not dwell on this chapter of its history that took place during pipeline construction days.

The era of construction of the Trans-Alaska Pipeline, 1973 to 1977, was a wild time in Alaska, and during that period the Alaska portion of the Teamsters Union, Local 959 with its 23,000 members, was making money hand over fist, taking into its pension trust funds $1 million each week. Head of Local 959 was the notorious Jesse L. Carr who in the late 1960s was charged with extortion, embezzlement, and making false claims to secure a government loan.…Under Jesse Carr’s leadership, the Teamsters Union chose to build an empire by investing in real estate and construction.

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.