This letter was written to FIRB after
Columbia/HCA abandoned Australia, and in response to Sun Healthcare's
planned entry into Australia. It describes my concerns about a number
of companies and corporate medicine in general.
22 May 1997
Mr A Hinton
Foreign Investment and Review Board
Dear Mr Hinton,
Kaiser, Vista Healthcare, Alpha Healthcare and Sun Healthcare.
Kaiser:- I believe that the US managed care company Kaiser has been looking for opportunities and has acquired a small foothold in South Australia. It is subject to intense criticism in the USA. Several patients died in two California hospitals owned by Kaiser and investigations revealed major deficiencies in standards. They were forced to sell these hospitals. Kaiser went to court in an attempt to suppress the publication of a damning report by the Texas Department of Insurance. I have a copy of that report and will be posting it to you. I sincerely trust that you will critically review Kaiser's track record before you allow it to expand into Australia in any way. Kaiser's conduct is representative of US corporate managed care companies. Many states in the USA are now legislating in an attempt to control the ruthless manner in which managed care companies refuse or limit care for those who are entitled to care under the terms of their insurance. It is therefore disturbing to see reports that our health minister is supporting the introduction of managed care in Victoria, by a company which is controlled by the international giant AKA.
Sun Healthcare and Alpha Healthcare:- Sun Healthcare, another unsavoury health corporation is I have recently heard coming into Australia under the umbrella of the Singapore Healthcare company Alpha Healthcare. It is likely that Sun is attempting to get its foot in the door and will eventually become the major financial backer. I understand that Alpha is expanding. Alpha and Parkway do not have experienced profit making business managers. It is likely that the managers of Alpha's hospitals will come from Sun Healthcare.
I have 1996 reports from the UK indicating that Sun is a major provider of aged care and nursing home facilities in the USA. Outside reviews of its facilities found dreadful standards of care. It was raided by the FBI and a fraud investigation was commenced. I have a hearsay report that the US Department of Justice is currently prosecuting a fraud action against them. I am initiating inquiries and will supply information as it becomes available.
A new company called Vista Healthcare has been formed in Singapore. Five of the seven directors are past Tenet/NME staff. These include Michael Ford who was president of Tenet/NME's international division in Singapore. Dr Alan Ng accused him of attempting to trade patient admissions with him. Neither Ford nor any other of the NME staff present gave evidence to refute the allegations. Five of the seven directors are US citizens. The major backer is a US company called
Chase Asian Equity Associates L P
380 Maddison Avenue 12th Floor
New York NY10017
I have been unable to track this company and do not know who is behind it.
Alpha Healthcare is largely owned by the Tan family which also owns Parkway Holdings in Singapore. Parkway purchased Tenets international holding in Singapore and had some arrangement with Tenet/NME to run its hospitals. You will remember that it bid for Tenet/NME's holding in Australian Medical Enterprises. It intended to continue a contract providing access to NME's notorious business practices and the services of Dennis Brown, the NME administrator. It was aware that Brown had failed to confront allegations made by a Singapore doctor claiming that Brown had attempted to trade patient admissions with him.
I note that some of Vista Healthcare's directors were very recently Parkway staff. I do not know what the current relationship between Parkway, Alpha, Vista and Tenet is but I believe we should be very cautious.
Your responsibilities:- I sincerely trust that you will give those of us with knowledge, the opportunity to track down documents. I trust that you will also make inquiries yourself and that you will carefully explore the relationships between these various companies. You will need to find out who the ultimate financial backers are? Our healthcare system is much more vulnerable to dysfunctional corporate practices than that in the USA. We do not have the complex and costly regulatory oversight which they have in the USA. The government has not provided the vast financial resources needed to police health care and we do not have anything which approaches the FBI. The FBI is at last beginning to make inroads into corporate healthcare fraud in the USA. This is why these companies are now moving internationally.
Policing and prosecution of offenders in Australia:- You will be aware that the police in the NSW, Queensland and Victoria have all become accomplices of criminals in response to financial incentives. US corporations operate by offering incentives and had no compunction about breaking the law if this was profitable. You will know that a judge delegated to investigate the conduct of Tenet/NME had an established relationship with police to protect him. He rendered himself at risk of improper influence by continuing to indulge in sexual exhibitionism with young men in public places. The politician who blew the whistle on this claims that other judges behave similarly. The NSW police were quite recently found by ICAC to be selling confidential information to business groups. US corporations have a track record for criminal activities and for threatening people. One of Tenet/NME's hospital executives was recently convicted after it was revealed that he had threatened that someone would be killed if they did not comply.
Fit and proper:- I remind you again that the owners of hospital licences in Australia are required to be "fit and proper persons". I sincerely trust that you will investigate properly and explore these issues before giving your approval for any of these companies to operate in Australia. State licensing authorities do not have the resources to investigate in foreign countries.
Dominance of criminals in health care:- It is not a coincidence that so many large corporations adopt unethical and criminal practices. Competition on the sort of "level playing field" which our minister advocates is not about quality or cost. Experience in the USA shows that it is about marketing, control and market share. Profits compete with care for the insurance dollar. It is inevitable that those corporations willing to disregard care and indulge in unethical or criminal activities will thrive in a market dominated by profit. Those who attempt to maintain a humanitarian service will go under and are taken over. The unscrupulous thrive and become more powerful with more control. Caring medicine disappears. This has happened in the USA. Our health minister assures us that we will not get the US health system in Australia. He fails to indicate how his proposals and belief in the self regulatory effect of the marketplace differ from the situation in the USA.