2 June 1997
US corporations continue to move into
SUN HEALTHCARE the Pacman of subacute and aged care.
Past US corporate activity in Australia:- I have written to you in the recent past about Columbia/HCA and may also have written to you about National Medical Enterprises (NME) in 1993/4. NME has been renamed Tenet Healthcare in order to escape its past. You may recall that Tenet/NME vacated Australia after over half of its US hospitals were listed in a guilty plea to grossly unethical practices as it exploited the trust of patients in order to defraud insurers. My concerns about Columbia/HCA were confirmed to be valid when the FBI raided its hospitals earlier this year. Columbia/HCA abandoned its attempt to enter Australia.
Corporate activities in disrepute:- Corporate medicine has been characterised by dysfunctional business activities and corporate fraud on a massive scale. Medical fraud costs the USA $100 billion each year. The FBI is rapidly becoming more effective at prosecuting corporations and the fallacy of allowing market forces to regulate health care is increasingly recognised. Most states in the USA are regulating to control corporate activity although at this stage they are still patching the system and not addressing fundamental issues. The consequence is that corporations are looking abroad and like a Medusa, a multi-headed monster US corporate medicine grows again in Australia in a related form as each head is cut off. Our region is seen to be ripe for exploitation and Australia is the prize.
Our federal health minister and the corporate medusa:- It seems that US corporate advisers have the ear of our health minister. At this time Sun Healthcare which has displayed PACMAN characteristics similar to Columbia/HCA and has also in the past been raided by the FBI is moving in under the umbrella of Singapore and Malaysian interests. Our government will not want to upset the already critical politicians in these countries. I am concerned that a "mad cow" approach will be adopted to our health system and to the welfare of Australians. Our minister has nailed the flag of corporate competition to his political mast. If he fails to corporatise our health system and make it profit driven then his political career will suffer. His recent strong support for the contracting of care by subsidiaries of the French multinational AXA suggest that he knows time is running out.
SUN HEALTHCARE enters Australia:- An overview of the information available to me and some of the documents are attached. Sun Healthcare is applying to the FIRB to enter Australia. It has joined Alpha in purchasing Healthcare Corporation Pty. This transaction will make Sun the major holder in Alpha and give it control over large numbers of hospitals in Australia. It will be the second largest owner in NSW next to Mayne Nickless which is under a cloud with the present state government because of the Port Macquarie fiasco.
Suggested action:- The FIRB is able to use Federal government resources in order to investigate corporate activities in foreign countries. State governments are unable to do so. In the past FIRB has simply asked state health authorities who do not have the knowledge or the resources whether they have any objections and then granted licences. They have given approval to undesirable multinationals and then refused to withdraw that approval when confronted with evidence. I urge you to take this matter up with FIRB to ensure that they do their job properly.