THE WALL STREET JOURNAL. ***** Monday, February 24, 2020 |B3
BUSINESS NEWS
In January, men walked through the area of the 2019 Brazilian dam burst, which killed 270 with a wave of muddy mining waste.ANTONIO LACERDA/EPA/SHUTTERSTOCKbought up physician practices.
Insurer-owned clinics might re-
fer patients away from certain
hospital systems, cutting off
important revenue.
Referrals are a focus for
clinics owned by a joint ven-
ture involving Florida Blue’s
corporate parent, said Chuck
Divita, executive vice president
at the Florida insurer. Florida
Blue offers plans largely built
around primary care at clinics
where members don’t have a
copay for those visits. Mr. Div-
ita said the clinics would aim
to refer patients to specialists
and other health-care providers
that deliver the best outcomes.
Some companies have of-
fered both insurance and
health care, includingKaiser
Permanente, the big Califor-
nia-based health plan that has
its own network of hospitals
and doctors. InsurerHighmark
Healthtook over a Pittsburgh-
area hospital system in 2013.
And some hospital operators,
such as Virginia’s Sentara
Healthcare, have sold their
own health plans.
But deals like the CVS-Aetna
merger and Optum’s provider
acquisitions have created inte-
grated health-care giants on a
new scale. HumanaInc. re-
cently joined with a private-eq-
uity firm to expand its pri-
mary-care clinics serving
Medicare members, and it has
taken on home-health and hos-
pice assets.rooms and improving preven-
tive care, said Shara McClure, a
senior vice president at the
Texas insurer, a unit of Health
Care Service Corp.
Generally, plans built around
a health insurer’s own clinics
include smaller networks with
more limited choices of doctors
and hospitals. That can lowerpremiums—but the insurers
also can benefit because they
keep revenue inside their own
holdings rather than paying
outside companies for the care
of their members.
“It’s very worrisome for
hospitals,” said Chas Roades, a
health-care consultant. “Sud-
denly, the plan you’re relying
on for payment is also compet-
ing with you at the front end of
the delivery system.”
Hospitals’ biggest concern
may be the power that pri-
mary-care doctors have over
where their patients go for
care such as imaging scans and
specialist procedures. Hospitals
rely on doctors to direct pa-
tients to them for such ser-
vices—one reason they have‘Health care has got
to be more seamless
and more integrated,’
one executive said.issues at the structure, which
held back mine waste at an
iron-ore mine in Brazil.
The new report focused on
corporate culture and prac-
tices that an independent
committee, appointed by Vale,
said contributed to the disas-
ter. Committee members in-
cluded a former Brazilian su-
preme court justice.
A Vale spokeswoman said
recommendations provided by
the committee match those it
has been taking since the di-
saster. It is making a “deeper
analysis” of the report and
will act accordingly, it added.
Last month, Brazilian pros-
ecutors charged 11 Vale em-
ployees, including former
Chief Executive Fabio Sch-
vartsman, with homicide. Vale
has denied being aware of any
critical or imminent risk to the
Brumadinho dam. All individu-
als charged have denied
wrongdoing.
The report findings mirror
reporting contained in a year-
long investigation of the disas-ter by The Wall Street Journal.
In December, the Journal
reported that negligence,
coverup and a compliant state
all contributed to the tragedy,
citing contractors, employees,
lawmakers and investigators.
The Journal described a model
inside the company that inves-
tigators labeled “compensa-
tion and retaliation,” in which
a bonus system encouraged
employees to hold down costs
and muffle safety concerns.
The new report, which Vale
is sharing with authorities,
said the independent commit-
tee reviewed Vale’s compensa-
tion and incentive structure
and found safety goals were
taken into consideration for
bonuses, but that often those
considerations related to man-
agers being able to obtain
safety certifications from out-
side auditors.
The report found potential
conflicts of interest between
Vale and its auditors, includ-
ing German firm TÜV SÜD.
The Journal reported in Febru-ary last year that TÜV SÜD in-
spectors knew of dangerous
conditions at the dam but cer-
tified it as safe, in part be-
cause they feared losing Vale’s
business which involved
scores of other contracts.
The report also cited find-
ings that it said showed Vale
knew about the fragile state of
the dam for years. It said it
found evidence that a decision
by Gerd Peter Poppinga, a top
Vale executive, to stop dump-
ing waste at the dam in 2016,
may have been based on con-
cerns about the dam’s safety.
A lawyer for Mr. Poppinga,
who hasn’t been charged,
called the committee’s find-
ings about his client “grossly
untrue.” He reaffirmed his
previous statement that issues
raised by Mr. Poppinga
weren’t related to the dam’s
safety, saying documents sup-
port that assertion. He said
state prosecutors dropped
their investigation into Mr.
Poppinga because of a lack of
evidence of wrongdoing.An independent report
commissioned byValeSA into
last year’s deadly mine-dam
failure found conflicts of inter-
est between the mining com-
pany and its auditors, faulty
information-sharing inside the
company and a compensation
structure that prioritized fi-
nancial returns. The commit-
tee that wrote the report said
all these factors contributed to
the disaster, which killed 270.
The report, which Vale
made public last week, was
the second commissioned and
released by Vale into the cir-
cumstances and causes of the
January 2019 dam burst. The
first report focused on techni-
cal and engineering aspects of
the dam, including drainageBYPATRICIAKOWSMANNReport Faults Vale Culture
Independent
committee links
conflicts of interest
to deadly dam failure$14.99 a month. HBO’s current
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“Friends” was on the air for
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Terms of the deal weren’t
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The stars shared the news
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ing service will include a spe-
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The company said that all of
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part of the show’s celebration.
The Wall Street Journal pre-
viously reported that Warner
Bros. was finalizing agreements
with the cast of the show. Exec-
utive producers from “Friends”
will also be involved in produc-
ing the special, WarnerMedia
said. HBO Max will be free for
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ANDJOEFLINT
HBO Max Readies
‘Friends’ Special
Some of the largest health
insurers are capitalizing on re-
cent massive deals by steering
patients toward clinics they
now own, controlling both de-
livery and payment for health
care.
The trend creates worries
for rival doctor groups and
hospital companies that have
invested deeply in buying up
physician practices, which now
increasingly compete against
offerings from insurers.
UnitedHealth GroupInc.’s
insurance unit is offering a
plan in the Los Angeles area
built around doctors who work
for its Optum arm, which has
acquired a sprawling network
of doctor practices, surgery
centers and urgent-care clinics.
The company says it is working
to offer similar designs in
other markets, though they
might also involve non-Optum
doctors.
“Health care has got to be
more seamless and more inte-
grated,” said Rob Falkenberg,
chief executive of United-
Healthcare’s California opera-
tion.
At Aetna Inc., which was ac-
quired byCVS HealthCorp.,
many insurance plans this year
have dropped copayments for
members if they go to the
drugstore chain’s MinuteClin-
ics. Going to other retail clinics
would generally require a co-
pay. CVS says the free Minute-
Clinic visits are to benefit
Aetna members,and not aimed
at bolstering the drugstore
chain’s customer traffic.
Blue Cross & Blue Shield of
Texas launched a plan this year
that includes free primary-care
visits at clinics it recently
opened with a partner com-
pany in the Houston and Dallas
areas. It priced the coverage
12% to 18% below a different
product it offers statewide. The
new plan includes some inde-
pendent doctors and clinics,
but members who use them
would have a copay for pri-
mary-care visits.
Blue Cross of Texas expects
the clinics will lower costs by
reducing use of emergency
BYANNAWILDEMATHEWS
Clinics Owned by Insurers
Challenge Doctors, Hospitals
CVS provides flu vaccinations at its MinuteClinic and pharmacy.JOE RAEDLE/GETTY IMAGESA Canadian mining company
shelved a proposed multibillion-
dollar energy project that the
federal cabinet was days away
from issuing a verdict on, citing
political uncertainty over oil-
and-gas development.
The surprise Sunday night
move byTeck ResourcesLtd.
likely intensifies a feud between
the western Canadian prov-
inces—home base of the domes-
tic energy sector—and the fed-
eral Liberal government run by
Prime Minister Justin Trudeau
over environmental policy. The
decision also emerges at a time
when rail blockades in support
of an antipipeline fight by some
indigenous leaders have closed
rail traffic on a key corridor.
Mr. Trudeau and his cabinet
were due to decide this week on
whether Teck Resources could
proceed with its Frontier Project
in Alberta. The project would
cost over 20 billion Canadian
dollars ($15 billion) to build and
produce up to 260,000 barrels
of crude oil a day.
Teck Chief Executive Don
Lindsay said the company was
withdrawing its application for
approval. He cited the heated
political battle between re-
source development and envi-
ronmental policy, and how the
Frontier project had emerged as
a flashpoint in that debate.
“It is now evident that there
is no constructive path forward
for the project,” Mr. Lindsay
said. “Investors and customers
are increasingly looking for ju-
risdictions to have a framework
in place that reconciles re-
source development and cli-
mate change, in order to pro-
duce the cleanest possible
products. This does not yet ex-
ist here.”
Following the Teck decision,
the Canadian government said
the country’s competitiveness
depends on a “serious plan to
protect the environment.”BYPAULVIEIRA
Miner Abandons
Big Canada Plan
! !
! !
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