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.

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.

Dose of Reality: Obamacare

April's Dose of Reality is a discussion of the 900-page Patient Protection and Affordable Care Act, which may, says Davis, actually do some good.

Anyone aware of the control that the health insurance and pharmaceutical industries exert over Congress should not be surprised that the new law does good things for these industries, and very little that may harm their profitability right away. The surprise (for me at least) is that the new law actually does do some good for the public—and in ways that might and should eventually lead to the demise of the for-profit health insurance industry and the continuing obscene profits of the pharmaceutical industry.

The act allows for self-insuring, although it does not include a public option, unfortunately. Health care cooperatives already exist, and this bill may strengthen them by providing an option that costs less. (Obamacare doesn't do much to reduce health care costs, alas--some, but not much.) Neil uses the example of the Seattle-based Group Health Cooperative. The more people who join health care cooperatives, the stronger they will become. And cooperatives, unlike insurance companies, exist to benefit their members. (Insurance companies, you recall, exist to make a profit for their investors.)

Dose of Reality: ACHIA's a bad deal unless you're desperate

In the March 2010 Dose of Reality, Davis takes on ACHIA and the sudden spate of cheery ads and announcements publicizing Alaska's Comprehensive Health Insurance Association:

These ads stress the idea that every Alaskan already has the ability to buy health insurance. Why do you suppose that is? Could it be that the ads are a propaganda ploy trying to promote the idea that we don’t really need health care reform just because it promises that everyone will be able to get insurance despite pre-existing conditions? Also, we might ask, why are so few Alaskans enrolled in the ACHIA program?

Davis tackled the ACHIA program in an earlier article, too, in February 2009, describing how the program works.

Dose of Reality: We Haven't Hit Bottom Yet

In the February Dose of Reality, Neil Davis writes:

Back in the 1950s before Alaska achieved statehood, my father was assistant director of the Fairbanks federal prison and then director of the Nome federal prison. In those capacities he saw many people with problems that they sometimes surmounted but often did not. That experience led him to believe that a person headed downward had to hit a floor before bouncing back upward to put his life back in order. I recall him saying of one of his prisoners, “That guy has not hit bottom yet; his life will get worse until he gets there, then maybe he can rebound up to where he can live a decent life.”

It seems to me that this is where the American public now is on health care reform: things are bad but they are going to have to get a lot worse before the public finally rebels against the insane for-profit health care system that it has allowed to come into existence.

Davis provides a few grim statistics to show just how bad health care in this country really is—and worse, how bad the trends in heath care have become, relating to bankruptcies, child mortality, poverty, and CEO salaries.

Dose of Reality: Looking at 2009

In Davis' January Dose of Reality, he observes that "for the first time, health care reform bills have actually gotten to the House and Senate floors—and been passed." This is a significant achievement, despite the problems associated with them. A comparison of the two bills (PDF) was provided by the Kaiser Family Foundation, but, Davis writes,

Reading through the Kaiser report the main impression I got was that neither the House nor Senate bills do much if anything to reduce the incredible complexity and cost of the American health care payment system. This complexity adds much to the system’s dysfunctional nature and allows uncontrolled escalation of costs.

In other words, both bills miss tackling the main problems with our system.