By Mathew Keller, RN JD
Regulatory and Policy Nursing Specialist
Regulatory and Policy Nursing Specialist
It’s been well reported that Allina Health, a $3.9-billion nonprofit healthcare organization, “invested” $108 million in Health Catalyst, a private for-profit technology company. As part of the deal, Allina is outsourcing its “data warehousing, analytics, performance improvement technology, and personnel to Health Catalyst.” In fact, the money Allina spends on Health Catalyst “represents the cost of what the staff and tools” were costing Allina, according to Allina CEO Penny Wheeler. In other words, Allina took a segment of its business and paid to outsource it to a for-profit company.
The conflicts of interest abound. For starters, Allina CEO Penny Wheeler is on the Health Catalyst Board of Directors. While she claims she’s not being paid to be on the Health Catalyst Board, we’ve seen no such proof.
And even if it were true that she’s not being paid, there’s a natural conflict of interest between being on the board of directors of a for-profit company where you have a fiduciary duty to the company to maximize profits, while you’re at the same time running a nonprofit where you have an ethical duty to provide charitable care. Which one wins out: maximizing profit for your for-profit company, or providing a community service through your nonprofit? When the two are doing business together, it stands to reason that the aims are mutually exclusive.
As Health Catalyst CEO Dan Burton wrote in a press release, one of the aims of the deal with Allina Health is to “’Turbocharge’ financial… outcomes.” But is turbocharging financial outcomes really what non-profit healthcare is all about?
Perhaps Allina has given us our first glimpse of where its priorities lie when it comes to Health Catalyst vs. Allina Health. While 4,800 of its nurses are on the outside of the hospitals, asking for Allina to come to a fair deal, Abbott Northwestern Hospital’s senior vice president couldn’t be bothered — he’s in Salt Lake City, at Health Catalyst’s annual conference.
Make no mistake: at a time when Abbott Northwestern is facing a crisis, at a time when the employees who actually deliver the care patients receive are outside of the hospital doors, at a time when leadership is needed more than ever, Abbott’s senior vice president’s time and attention are focused on one thing: Health Catalyst.
So….she says she’s not being paid to be on the board…. But I’m sure she’s a stock holder. Were the stocks purchased or offed in lieu of direct payment? And why isn’t the state’s AG office looking at this? Is this not a conflict of interest?
Yesterday, on Labor Day, Keith Ellison our U.S. Representative posted pictures of a bygone era in union history. The first of these following is my reaction to his post after having spent time walking with my daughter, an Abbott Northwestern nurse. The second is a letter I sent to Penny Wheeler, CEO of Allina Healthon the evening before Labor Day. I know this is long. I wanted to share what I wrote.
Sept. 5th
Keith Ellison, seeing these photos today, and having walked with my daughter around Allina, makes me weep. Their being treated as if they do not exist, that sense of being devalued is not healthy; sadness, disappointment, anger, hurt. And then they go home to families. It’s not right! I am a mother supporting my most amazing daughter. My heart aches for all of them. Here is a letter I wrote to Penny Wheeler, CEO of Allina, last night. I hope you are able to read this.
To: Penny Wheeler, CEO of Allina Health
Re: The Allina Nursing Community
Sep 4, 2016, 9:17 PM
Penny,
My name is Brigid. My daughter is a nurse at Abbott Northwestern Hospital. As a member of the community you serve, I am writing in response to the situation regarding the contract negotiations between Allina and the Minnesota Nurses Association.
Our country, the United States of America, has a history of unions going back as far as the late 19th Century and early 20th Century: the mining industry in 1890 with the United Mine Workers Association, the International Ladies’ Garment Workers’ Union in 1900, the Minnesota Nurses Association in 1905. And These are just three of many. The work of unions created forty-hour work weeks, improved working conditions for all laborers, child labor laws, health care, safety in the workplace, minimum wage, among others. Unions are the backbone in the history of our country for fair and equal rights.
But you, Allina, in your avaricious, greedy need for control, are trying to break the Minnesota Nurses Union, while sitting on millions and millions of dollars; enjoying the shameful self-righteousness of being members of the one-percenters. There are women and men, nurses in your hospitals, some of whom are single parents, with mortgages, school loans, car payments, taking care of aging parents, their children, daycare costs, and you dare to turn your egregious behavior on those women and men who are devoted to your patients’ care…your mission, I assume!
Many unions will be supporting and walking with your nurses, police and firemen, teachers, along with legislators, leaders in the community, and a plethora of families and friends. Can you see us? Can you hear us? Your patients will! Your reputation will suffer. Your nurses have improved the lives of many a patient. Why disregard the dedication of so many women and men? Why devalue these women and men? Shame on you…shame! With respect for my daughter and her amazing friends, I will not write what I’d really like to. Suffice it to say, I am angry.
May the lives of those lost in the fight for unionization in this country be honored on this Labor Day!!! May the heart and soul of Cesar Chavez be with the nurses as this continues!
I agree completely with the above comment. Allina is totally beyond words!! As a recently retired RN from Southwestern MN, I fully support the nurses and MNA. I walked the picket line during the week long strike and will do so again!
I agree with the above comments. What I would like to know is where is the Attorney General in all of this? It seems the nonprofit status is in name only since Allina is sitting on millions in off shore accounts, is acting in several ventures that are for profit and/or a conflict of interest. Those on the Allina Board are not acting in the best interests of the community, nor the patients Allina has a mission to serve. It seems they are on the board to enrich themselves and act in their own best interests. How can the community trust Allina? It would seem their actions are certainly unethical and perhaps illegal.
Thank you Brigid. So very well said. Too bad Allina does not care.
Thank you for speaking up Brigid. You are saying what so many would like to say. The fear of retaliation at the hands of Allina is real. Have we all forgotten the trouble Allina got into with Minnesota Attorney General Mike Hatch. That too was based on dirty dealing and the same types of underhanded business practices. Hopefully their business practices are still being monitored.
Just curious do you know for sure that Dr. Bache Wiig actually ended up presenting at the Summit. I know he’s listed as a keynote speaker but I posted a link about this on Facebook and a friend who works at Abbott and is involved in the command center said that neither he or Penny Wheeler are out of town. Want to be sure I have things straight.
Thanks!
I want to know when she is going to be held accountable and who is going to do it?! She is already held in contempt!
Michelle D. RN
Do you understand that when you say Allina “outsourced” to Health Catalyst what actually happened is a large group of us (yes, ME included) became Health Catalyst employees. So, Allina NO LONGER PAYS us. Instead, they pay Health Catalyst for our services. We all still work in the same building in the same seats we always have, but get paid by someone else. The deal with Health Catalyst was money NEUTRAL.
I read an article in Forbes that indicates that Health Catalyst may be preparing for an IPO. Its current valuation is $500 million. It may be that Allina made a revenue neutral deal, though, $100+million hardly seems revenue neutral, it is not the actual issue. Allina, a nonprofit has a significant stake in a for profit company. Penny Wheeler has a conflict of interest in her role as a member of the board of Health Catalyst, which, if it goes public, could personally enrich her. It is the conflict of interest that is the problem. It is the greed of the CEO and thus, Allina, that is the problem.
Well said Beth, but I would add that nonprofits outsourcing labor to for-profit companies seems to be unethical as well. If Allina consists only of penny wheeler outsourcing 2 billion in revenue to employees of for-profit companies, is Allina still a non-profit? Would also add that the 60 Allina (now health catalyst) employees are widely reported to have received an ownership stake as well… I’ve always wondered how much that’s worth, Lisa?
In regards to the battle with Allina, has there been any communication to AG Lori Swanson or the Dept of Revenue in regards to their non-profit status? I have read about other states that have challenged and won in the elimination of insurance and hospital’s “non-profit” status. This may seem like an unfair tactic, but I have seen plenty of untruths from them and as a MN taxpayer; they should pay their fair share too! The state is leaving a ton of tax dollars (income and property) on the table.