Wellpath Recovery Solutions, a private contractor, is taking over administration at the beleaguered Alaska Psychiatric Institute. The Alaska Department of Health and Social Services made the announcement in a press release Friday.<\/p>\n
Alaska’s state-run psychiatric facility, where patients receive emergency and court-ordered treatment, has been proven to be a dangerous place for employees and patients in recent years, according to a DHSS report released last year<\/a>.<\/p>\n State law allowed DHSS Commissioner-designee Adam Crum to assume management of API because there is, as the press release states, “reasonable cause to believe there is a danger to the health, safety or welfare of individuals receiving care from that entity.” Crum was then able to award the no-bid contract (meaning there was no competitive bidding process) to Wellpath. <\/p>\n Wellpath had a recent success in bringing a Massachusetts hospital back into federal compliance, according to the release.<\/p>\n “During the course of recent investigations at API, we determined immediate steps were needed to protect patients and staff and ensure complete compliance with federal regulations, which also allows the facility to continue to receive federal funds,” Crum said in the release.<\/p>\n Wellpath will bring in a team of specialists to fill key leadership roles while Gavin Carmichael will continue as acting chief of staff at API, the release says. All state employees will remain in their positions too. If Wellpath “is successful” it will completely take over the operation of API on July 1, according to the release.<\/p>\n “It certainly can’t be worse than we’ve done, can it?” Alaska Senate President Cathy Giessel, an Anchorage Republican, said on Friday. “I am very pleased that the effort is going forward.”<\/p>\n “If we need to spend more money to help them, it needs to be done,” Giessel added.<\/p>\n Would privatizing API save money?<\/strong><\/p>\n With the state of Alaska in a fiscal crunch<\/a> some may wonder if this move is worth the money. In 2017, DHSS hired consulting group PCG Health to conduct a feasibility study<\/a> to see if privatizing API would save the state money.<\/p>\n “Based on these analyses, PCG’s assessment is that a blended approach to privatization is in the best interest of API and the state,” according to the study’s executive summary. “Our findings demonstrate that continued state management is not only the most advantageous route for generating overall cost savings, but that it also avoids many of the risks involved in contracting out the management of critical public infrastructure.”<\/p>\n The report advised against a comprehensive outsourcing of API.<\/p>\n “Cost-benefit analysis revealed that this option failed to produce cost savings, making it infeasible on fiscal grounds. The higher cost was due largely to expense of privatizing psychiatric services,” the report says.<\/p>\n A troubled past<\/strong><\/p>\n Sen. Bill Wielechowski, D-Anchorage, spoke out against the contract during an interview with the Empire on Friday.<\/p>\n According to the DHSS news release, Wellpath Recovery Solutions is “a nationally recognized health care company with a proven record of success,” but Wielechowski said that description of Wellpath is not very accurate.<\/p>\n “Well, Wellpath by that name has been in existence four months,” Wielechowski said. “It’s a combination of two other companies that have an extremely disturbing track record.”<\/p>\n The companies Wielechowski referred to are Correct Care Solutions and Correctional Medical Group, which merged in October 2018.<\/p>\n