By Mathew Keller
Integrity. Respect. Trust. Compassion. Stewardship. These are the core values of Allina Health. The Oxford dictionary defines integrity as “the quality of being honest and having strong moral principles; moral uprightness.” So why, then, does Allina continue to tell its nurses that it needs to shift $10 million in healthcare costs to them? In 1,664 pages of financial disclosures to the IRS and its bond investors from 2001–2014, Allina never once represents that it is anything but highly profitable, making a reported $1.3 billion dollars in net revenue over the past 6 years alone.
Allina, in fact, pulled in $130 million in “net revenue” (fancy word for profit) after expenses in 2015, according to its “audited” consolidated financials (prepared by KPMG, a business represented on Allina’s Board). That’s $130 million after writing off $33 million in losses on investments, after writing off $17.6 million on “interest rate swaps” it has with certain businesses represented on its Board of Directors, after paying its top 25 executives $23.9 million dollars in salary alone.
Besides that spending spree on salaries, Allina has taken out $880 million in loans, mostly underwritten by businesses on Allina’s Board; lost $60 million on bad deals made to many of those same businesses; spent another $108-million-dollar investment in a for-profit company called Health Catalyst where Allina CEO Penny Wheeler is also a Board member; and now wants to cut $10 million in healthcare expenses to nurses.
Allina is making money and spending money, but it’s also saving money too. There’s plenty of money stashed away, including $1.2 billion invested in the stock market, hedge funds, private equity, etc.; and $350 million in cash. All told, Allina is sitting on $2.3 billion dollars in net assets after liabilities, including its investments, cash, and infrastructure after accounting for all of the various debts it owes. Let’s call that 2.3 billion reasons for the state’s Attorney-General to take a long and hard look at the way this community resource is conducting itself in business.
Despite its big debt and questionable business deals, providing healthcare remains extremely lucrative for Allina. But the core value of stewardship, or “the job of… taking care of something,” demands that Allina stop throwing money away on bad business deals and debt on which businesses on its Board of Directors profit, or on short-sighted attempts to diminish the healthcare benefits of its nurses, and instead start investing more in the healthcare of its employees. All of them.