Press coverage of API privatization nearly misses the privatization part

The Anchorage Daily News story on the privatization of the Alaska Psychiatric Institute downplayed the privatization part.

The Dunleavy aministration has kept top leadership positions at the hospital open and is saying that because there is a lack of leadership, the only option is to bring in a private manager until July 1 under a no-bid contract.

The state has refused to release any details of the arrangement, but union leaders said they were told Friday that Wellpath is to get $1 million a month and that API will hire lots of new staff. Adding staff is the key to turning this around and the new workers will be state employees for the time being.

My comment about downplaying privatization relates to what the Dunleavy administration plans for the summer.

“After July 1, Wellpath could assume full responsibility of API, officials said. It was not immediately clear how that would happen. (Health commissioner Adam) Crum could not say Friday whether the state planned to accept bids from other companies,” the Anchorage Daily News said.

The ADN also mentioned that mental health director Mike Abbott said, “trust officials have not decided if API should make a permanent transition to a private operator, Abbott said.”

But that contradicts what Crum told legislators Friday. There is no question that the Dunleavy plan is to privatize, an approach to government that temporary budget director Donna Arduin has pursued in other states for various services.

This has to be seen in that context.

Crum didn’t tell legislators that Wellpath “could assume full responsibility.” He said, “If the company is successful in this first phase, Wellpath will assume full responsibility of API after July 1, 2019.”

The same line was in the state press release. The important word is “will” and the statement leaves no room for going to a competitive bid. Is it legal? I don’t know.

One reason we haven’t seen the sole-source contract with Wellpath is that perhaps it hasn’t been signed yet.

Sen. Bill Wielechowski said on Twitter, “I asked Dept. of Health & Social Services about API privatization contract. I was told they didn't know if there was a contract, didn't know how much the private company was being paid, didn't know if it was a sole source contract, didn't know when they'd have this info.”

Top management and leadership positions at API are open. Instead of filling them and adding staff to fix problems, the state is giving $1 million a month to Wellpath and adding staff to fix the problems.

Adding staff will be costly, but necessary. This approach will “prove” by July 1 that privatization works, to be followed by prisons, etc.

Anchorage Sen. Cathy Giessel was quoted as saying she likes the idea of turning this over to a private company and that things at API couldn’t get worse. I hope that was a dumb off-the-cuff comment that she realized later was a mistake.

Dermot Cole12 Comments