Alaska Psychiatric Institute (Photo courtesy of the Alaska Department of Health and Human Services)
A union is suing the Dunleavy administration to stop the privatization of Alaska’s main psychiatric hospital.

In February, the administration introduced a plan to turn over management of the troubled Alaska Psychiatric Institute to Wellpath, a private company based in Tennessee. The move has been criticized for bypassing the competitive bidding process, and because of the extensive number of federal complaints filed against one of the two companies that merged to form Wellpath.
And now, the Alaska State Employees Association is suing the Administration in state superior court to halt the change.
“We are facing an emergency situation where we want to save our members’ jobs,” said ASEA Executive Director Jake Metcalfe.
The union represents around 8,000 workers across the state, 211 of whom are employee’s at API and could eventually see their jobs eliminated under the privatization plan, according to Metcalfe. The organization is pursuing a restraining order to immediate block Wellpath’s management of the facility.
While there are concerns about patient well-being, the union’s actions are based on what Metcalfe says is a breach of labor laws that affect employees.
“The state has gone ahead and signed a contract with a private employer and not given our members the contractual rights that they have, or the opportunity they have to show they can do the job cheaper and provide a better service,” Metcalfe said. “That’s a violation of contract law. It’s a violation of the state procurement law. And we think it’s a violation of the Alaska constitution.”
As of noon Tuesday the state had not responded to the motion in court.
Dunleavy spokesperson Matt Shuckerow said the administration cannot comment on pending litigation.
But he rejects assertions that recent decisions about API are driven by budgetary concerns. The facility has faced a barrage of problems: from working conditions to employee vacancies to patient safety concerns. According to Shuckerow, the administration moved swiftly to transfer control of the hospital to Wellpath because it was at imminent risk of losing federal funds and even being forced to shut down completely.
“There’s a healthy understanding that this system was broken. And that without doing something that we were in a very, very difficult situation,” Shuckerow said.
The union expects the court to hear arguments before the end of the week.
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