The many extracts on these pages are from copyright material. They are owned by the reference given or its owner. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. The comments made on this page are personal opinions held after writing the other pages on this web site and reviewing the material summarised there.

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Corporate Practices

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Main Australian sections

Hospital Corporatisation
Privatisatio & Colocation
Pathology & Radiology
General Practice.
Corporate Markets & aging

Introductory page
This corporate web site addresses the issues of corporate health care within a broad framework. A web page describing this broad context should be considered as an introduction to each page on the web site. If you have not yet read it then
CLICK HERE to open it in another tab or web page.

Content of this page
This page is the root page for the Australian section. It was completely rewritten in 2006 and now provides a broad overview of the corporatisation of health and aged care in Australia. There are links to pages which address different sections of the health system in Australia.

 Australian section   

The Corporatisation of Health and Aged Care
in Australia



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These web pages started as a whistle blowing exercise in my battle to get Tenet Healthcare out of Australia. It was a response to the defamation actions they took against me. It changed to become a dissent site when our government welcomed a succession of similar dysfunctional health care multinationals into our health and aged care systems.

When these companies dissolved in a series of scandals the government pursued its marketplace agenda for health and aged care by using local companies, with varying degrees of success and failure. The Australian pages became a critical examination of these developments. The repeated additions have made this page cumbersome and I have decided to rewrite it.

The best way to see what is now a very large site and select the material to read is to use the Australian site map where the structure still roughly follows the order in which the pages were written. During this period a tree like structure developed with proximal pages offering overviews and summaries of more peripheral and detailed pages.

I suggest you read this page and then go to the site map to see what is there. There are now a large number of pages and you will need to be selective.


Click Here to go to the Australian site map

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Political Story

1861 On hundred and forty year old truth!

"The truth is that medicine, professedly founded on observation is as sensitive to outside influences, political, religious, philosophical, imaginative, as is the barometer to the changes of atmospheric density.
[Actually there is] a closer relationship between the medical sciences and the conditions of society and the general thought of the time, than would at first be suspected"
Oliver Wendell Holmes - US doctor - (1861)

The global background

The corporatisation of health care must be seen against the background of the society in which it has occurred and the political ideologies of the day. During the postwar years Australia followed other Western countries including much of Europe, Canada and the United Kingdom in adopting socially conscious patterns of thinking when addressing social and community issues. Health care was at the centre of this. The outcomes ranged from a National Health System in the United Kingdom, a universal government run health insurance system in Canada, a mixed public/private system in Australia, and various systems of not for profit group insurance in Europe. Among western countries only the USA was the exception. It maintained a user pays, strongly market focussed health system. Only a few selected groups were socially supported.

The health systems in Canada and Australia were the consequence of bitter battles between pro market thinkers and socialist forces in which the socially conscious benefited in the compromise. Citizens in both countries have been very satisfied with the systems put in place. In both countries this has come under attack (pdf file) by a resurgent and dominant right.

Globally socialism has not prospered and the collapse of communism saw it lose credibility. High taxing socialist countries did not encourage business and suffered economically. Free market countries and the USA in particular prospered and came to dominate the capitalist world. With the loss of credibility of the left, the extreme right and its interpretation of democracy has become an unchallenged global ideology.

Not all sectors have benefited from a market system. In health and aged care the free market system in the USA has become by far the most expensive, the most inequitable, the most inhuman and the most distrusted in the world. The system is plagued by fraud and the ruthless exploitation of vulnerable citizens.

While the USA offers the wealthy some of the best care in the world the overall care provided to the citizens, and the health outcomes (WHO figures) is among the worst in the developed world. In contrast to Canada and Australia citizens in the USA are extremely unhappy with their marketplace health and aged care systems but are unable to find a way out. Health care expenses are a critical component in over half of all banruptcies in the USA. The market focus has been shown to be the root cause of the problems. A number of pages on this web site address the social dynamics involved in the marketisation of health care.

It is readily apparent that for many reasons (pdf file) a full free market corporatised health and aged care system is not in citizens best interests. In spite of this strong forces in Canada are pressing for such a system and Australia has adopted such a system claiming that it differs from that in the USA. There appears to be a considerable degree of ideological blindness.

The argument in these pages is not for a return to left wing socialism but for a more balanced society in which a one size fits all political agenda is replaced by a multifaceted society in which different sectors operate under paradigms suited to their successful operation.

This is an argument for developing new more appropriate paradigms for some sectors, balancing well established and valid understandings with modern developments and plans for the future - not for returning to past models. Health and aged care are two areas where this is critical, both for the systems themselves and for a global society that is becoming progressively dehumanised, socially fragmented and deficient in social capital. I addressed some of these issues in the latter part of a talk I gave in Canada (pdf file) in 2004.

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Politics in Australia

Early years:- Historically health care was a combination of not for profit humanitarian services, professionally controlled medical businesses, and largely community focused individual businesses. The professional ethic of care first and the not for profit focus on humanitarian service dominated. This is not to deny that there were problems or that the system at the time was unsuited to the rapid advances in health care. It is to point out that the underlying premise underpinning the service were congruent with the objectives for the system. Conflicts came from pressures generated outside the system.

As the costs of care increased individual payments and charitable donations were insufficient. A number of insurance and medical benefit schemes were formed to protect citizens from excessive expenses. The taxpayer was forced to come to the rescue and pay for the poor.

Socialism:- Since the second world war political thinking in Australia has been polarised between the right and the left. An equilibrium without excesses by either was maintained by strong credible criticism from the other, by regularly alternating governments, by electing different parties to state and federal governments, and by giving minority parties the balance of power in the senate.

A national health system:- The shift towards socialism after the war culminated in the landslide election of the socialist labour Whitlam government in the 1970s. Its plan to introduce a national health system similar to that in the UK was bitterly opposed and fought by the medical profession. The resulting compromise saw the establishment of a mixed system with universal Medicare insurance for every one and free public hospital access, but with a parallel private insurance system funding care in private hospitals.

Medicare comes, goes and then comes again:- The Whitlam government's spending on social services had serious economic consequences and resulted in one of Australia's most serious political crises. Whitlam was fired by the governor general and the coalition government regained power. It abolished the Medicare system. Instead it set up a government run private insurance company Medibank Private.

Medicare had been very popular and when a labour government was re-elected the universal Medicare system was re-established.

A new threat of a nationalised system:- The Medical profession was reasonably satisfied with this arrangement. At the beginning of the 1990s there was once again talk of a national health system and the medical profession swung sharply to the right to oppose this. Those doctors who had fought Whitlam's proposals were elected to positions of power and a pro-market focus dominated in the profession. The Health minister who favoured nationalising health moved on and the threat passed.

Labour moves to the right:- A general move to the right commenced with the Keating labour government. The sharp policy differences between the parties were lost as was the balance between conflicting ideologies. Keating had been treasurer under the Hawke labour government. He moved to an economic rationalist position deregulating industry and floating the Australian dollar on world markets. The threat of a nationalised health system receded.

Private sector in decline:- By this time the private sector was in serious trouble. The costs of insurance were increasing and the number taking out insurance was declining putting pressure on the increasingly popular public system. This provided a good service (see below). Private care and the private hospitals that the majority of doctors supported were struggling.

Self-interest before care:- The West Australian government welcomed the company National Medical Enterprises - NME (now renamed Tenet Healthcare) into Australia in 1991 to buy Markalinga. This was an Australian hospital company facing bankruptcy. The Australian Medical Association was aware of NME's unsavoury practices. Its previous administration had assisted me in challenging the company. NME was in the early stages of a massive scandal in the USA. In a sad example of self-interest and a betrayal of Australian citizens the Australian Medical Association (AMA) went along with this sale. I was critical and we clashed. In fairness they became more wary as the US scandal unfolded, but still failed to speak out decisively against the company fearing a defamation action if they did.

Managed care resisted:- The new labour health minister, Carmen Lawrence set out to introduce a managed care system into Australia in which doctors and hospitals would operate under contracts. This would have impacted on the autonomy of doctors and limited their control over the care given to patients. The AMA bitterly opposed these measures and doctors refused to enter into any contracts.

This bitter opposition led to the profession largely supporting the pro-business, pro-market liberal/nationalist coalition party at the 1996 election.

A radical shift to the right:- The election in 1996 saw a much more radical shift in Australian politics to the right. A small government, privatisation agenda was adopted and applied across every sector of society. Marketplace competition was seen as the solution to all problems. While this has had spectacular economic benefits for the country there have been serious consequences for some sectors particularly aged care.

The coalition seized on Keating's groundwork and extended labour's policies. Federal labour was left without a credible alternative policy. Their lack of credible leaders counted against them. The coalition has been repeatedly re-elected with larger majorities since. It has recently gained a majority in the senate so that there is very little restraint on its policies.

In contrast labour has gained and retained control in all of the state parliaments. They too have adopted market style managerialism and have moved to the right. This style of management has probably contributed to problems in health care in NSW and in Queensland.

Ideological disputes:- The divide between right and left has narrowed as the right has repeatedly attacked and discredited those with contrary moderate or left leaning views. The Murdoch owned papers, in particularly "The Australian" have been particularly aggressive in their criticism. Only the taxpayer funded but independent ABC television has remained critical of the extreme right. It has been repeatedly attacked as left wing, lacking objectivity and exhibiting bias.

One of the clearest signs of the ideological bias of the right is the dominance and increasing frequency of derogatory attacks by the market and the media on individuals and on practices or ideas which have social, academic, reflective or left leaning implications. There are few similar attacks from the left on the far more extreme right. Ex-South African, Australian author Bryce Courtney recently commented on the similarity of this pattern of behaviour with the early years of apartheid. I can vouch for that. I was in South Africa at that time too.

Coalition health policy:- The coalition had promised their corporate supporters that they would reverse the decline in private insurance and turn health and aged care into competitive marketplaces - as contrasted with a professional and community service. The new health minister, Dr Michael Wooldridge spelled out this philosophy in a credible sounding speech to the doctors in May 1996. He did not mention the extent to which he planned to corporatise and consolidate the industry. The electorate was strongly supportive of Medicare. Political risk ensured an undertaking to preserve Medicare, but this was reluctant.

The doctors now found themselves to the left of a radical right government with a dysfunctional agenda that challenged the Hippocratic tradition. Wooldridge too set out to force a managed care system onto Australian doctors. He joined with the global insurer AXA and the Australian giant Mayne Health to tempt and drive doctors into a system of contracts. The doctors were aware of the dangers and refused. A bitter battle culminated in the trading of law suits between the president of the AMA and Dr Wooldridge, a scandal involving the minister, an impasse, and the minister's ultimate departure.

The importance of this victory:- I believe that it was the success of the doctors in resisting these pressures which enabled them to maintain their independence. That their own interests as well as those of their patients was at stake fuelled their determination. They were subjected to intense political and media criticism.

Doctors retained control of the flow of patients. Corporate economic success now depended on their support. They exerted economic leverage. This differs from the USA where doctors freedom is restricted by contracts with managed care companies and corporate providers.

It is because of this, rather than government policy, that the Australian health system has not yet gone the way of the US system and that we have maintained reasonable standards of care. We have not encountered the sort of exploitation of the vulnerable seen in the USA.

This is well illustrated in the case of Mayne Health, an Australian company with a tawdry history. Doctors believed that it was cherry picking profitable patients and rejecting the more needy because they were less profitable. They also felt that the market management changes introduced into hospitals compromised care. They simply took their patients to other hospitals. Profits crashed forcing the company to sell its hospitals. The lesson has not been lost and other companies now go to some lengths to keep doctors on side.

Aged care confirms this:- In aged care doctors have no control over the admission of residents and the nursing homes often decide which doctor they will call to attend residents. Doctors have no leverage but the homes have some economic leverage over them. This is similar to the USA. It is no surprise that the consequences of turning aged care into a marketplace have closely followed the USA into dysfunction, neglect and elder abuse. Profit making wrinkle ranching and warehousing of frail elderly have become far too prevalent.

The way in which the Australian health and aged care system has been turned into a dysfunctional marketplace is documented in the sections and links below.

The corporate political mix.:- The coalition government is the government of the corporate sector. There are and have been close ideological, financial, and other links between politicians, lobbyists, and the corporate world. Australia has followed the US pattern. In a world where marketing has become critically important, funding to pay for this marketing often determines the outcome of elections.

Much of this funding comes from large company donations. Lucrative directorships await politicians who have performed well for the market. This puts the politicians in the pockets of the corporations. While they loudly proclaim their independence, this is seldom visible. It requires a vocal, independent, suspicious, and active public to redress the social balance and force political action in their interests.

In the USA it has been the market which has been the driving force in imposing market changes in health and politicians who have given support. In Australia it has been politicians that have driven the health system towards a corporate marketplace and the market which has enthusiastically followed. The system in Australia is far more dependent on government policy and support.

One of the pages on this web site examines the relationships between different understandings of capitalist democracy, marketplace thinking, politicians, companies and health care. It compares and contrasts the USA and Australia.

Evidence ignored:- As long ago as 1992 Ron Williams wrote his book warning Australian citizens of the pressures on politicians and urging citizens to act before our system followed that in the USA. No one was listening.

Since about 1993 I have made a practice of sending or emailing large numbers of politicians selections of the material I was receiving about the health and aged care systems from the USA. None of them can claim that they did not know what they were doing or that they were not warned. The arguments have been made ad infinitum.

A new labour government Nov 2007- New Aug 2008:- Labor governments were elected in all states. Federally, prime minister John Howard's extreme conservatism had become progressively more unpopular. He retained power largely because of the absence of a credible alternative labour leader. When Kevin Rudd became labor leader, the electorate rallied behind him and the coalition was swept from power at the end of 2007.

To provide a credible alternative labor has swung further to the right than any pre-1996 conservative government. It too became a party for the corporate marketplace, paying service to these powerful sponsors. The prime ministers wife was a prominent and successful businesswoman.

The left of the party have been unhappy about this but as power depends on cohesion this has been muted. Nevertheless policy has moved away from the extreme right but there is little to suggest that they will change the marketplace thinking now accepted across the country. The government has set up a plethora of committees and consulted widely but it is far from clear whether anything will come from this.

The new government was faced with a major economic downturn, a spiraling cost of living, an aging population and an undertaking to address global warming - all costly items. While ministers promise much there has been little to suggest that it has any intention of making real changes to health care. There is every indication that it is burying its head in the sand when it comes to aged care. State labour governments have enthusiastically embraced public private partnerships (PPPs) and federal labor has refused to commit to making even the minor changes to aged care regulations promised by the coalition when in power. In fairness a radical change of health and ageing policy in the midst of the ageing baby boom bulge might well cause major short term problems. Caution is wise and they do need to tread carefully.

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Health Insurance

Health care has become far too expensive for most individuals to pay for. As a consequence private medicine came to depend on private insurance and the care of the uninsured was delegated to government.

Many of the insurers were mutual or benefit groups founded to serve members. A few were for-profit operators.

Some commercial for profit insurers soon attempted to grade payments according to risk and so exclude high risk expensive citizens. This offended Australian's sense of equity and they were soon forced to charge the same rate and accept all comers regardless of age or risk, although there was a wait period.

At the same time the public hospital system had been providing good care but with long waiting lists. Trauma, cancer and other urgent costly conditions received prompt care. Increasingly the low risk young and the healthy elected to pay for their less serious surgery at private hospitals out of pocket and rely on the public system for the less common urgent and costly procedures.

Private insurers were left with the older, less healthy and more costly citizens. The costs of insurance soared driving more and more people into the private system. Private hospital beds were empty and they were struggling. By the mid 1990s when the coalition gained power the percentage of citizens with private insurance had dropped to the low 30s. There was a problem.

The coalition had promised to reverse this trend but it took them some years to do so. It was not until about 2000 that the trend was reversed and the benefits flowed through to the hospitals. This fuelled a profit bonanza and the rapid consolidation of the corporate for profit hospital sector.

The coalition diverted billions of dollars of taxpayers funds into subsidies to those who took out private insurance so keeping the costs down. Critics have argued that this money would have provided more health care far more cheaply had it been used to expand the public hospital system and they are probably right.

In addition to this government set a scale of fees so that those who tried to delay insurance until they were older and at risk paid higher premiums when they took out insurance.

These policies were successful and the rate of private insurance has increased to over half the population.

In addition to this the government has pressured the insurance system to make it more market like and competitive. It still owns Australia's largest insurer Medibank Private but plans to sell this to a marketplace company claiming that premiums will fall. Logical critics claim that the need to generate profits will push premiums up.

While health care insurance has been a major political issue it is not something which has particularly concerned me. I have not bought into the debate or written any pages about it. It is nevertheless an important factor in the provision of health care in Australia.

My view was that I was less concerned about how money was raised provided there was money to pay for care and provided that the medical care all received, whether public or private was good.

It is clear that in our society some of those who can pay will want greater luxury and choice than the community can reasonably be expected to provide. Can we deny them this?

There is also the issue of rationing which seems inevitable if medical advances exceed what the community can reasonably expect to pay. Choices may have to be made as to who will benefit most. I find it difficult to oppose the right of those who have money, or will sacrifice their life styles, to pay for, or insure for care they would otherwise be denied provided that does not reduce their responsibility to fund the system, or deprive others of care.

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The concerns on this web site

I am concerned at the conflict created for providers of care by a competitive market system driven by profits and the consequences of pressures (pdf file) to put the interests of shareholders ahead of the duty of care. Rationing for the benefit of shareholders is obscene. The way in which competitive market pressures drive this process, the way individuals respond to these pressures, and the consequences is what this web site is really about.

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From humanitarian service to markets

Health and aged care are provided by a range of public (taxpayer pays) and private (individual pays) systems. Because politics and access to health care is based on who pays this is the distinction commonly used in Australia.

More important for citizens and for society is for whose benefit the care they are given is provided. Is it for the citizen, or for the benefit of shareholders who have no interest in the care that is being given, other than the profit that can be generated from it? The important distinction is between "not for profit", mostly religious groups and "for profit" providers. The primary focus of not for profit providers is on serving the community and its members. The primary focus of for profit providers is on profits and this frequently conflicts with their duty of care.

Both for profit and not for profit providers can be subdivided further. Both can and do provide both public and private care. The patterns are discussed elsewhere.

In Australia humanitarian services such as health and aged care have traditionally been provided by not for profit operators. Although there have been an increasing number of for profit operators, the ethos, the patterns of thought and the manner in which the service operated was set by the not for profit sector. For profit operators were required to conform if they were to be accepted.

This changed for hospitals during the early 1990s when coalition governments held office in the states. Hospitals were a state responsibility. The change was far more rapid after the federal coalition parties gained power in 1996. It was extended to all of the welfare sector. Although not for profit providers still owned half of all private hospitals and nearly 75% of all nursing homes, the ethos, patterns of thinking, manner of operation and credibility shifted to the market as government policies were implemented.

These changes directly challenged the entire focus of operations by the not for profits and the very reason for their existence. The dilemmas for them are enormous. The market was incompatible with their core beliefs yet if they abandoned the sector those they served would suffer. Most compromised. As happened in the USA some have come to accept this as the real world, and have appointed market focussed managers. When these managers have imposed a more ruthless market discipline which has brought them marketplace success and credibility they have internalised and accepted market values.

While the not for profits have become far more commercially focussed the situation in Australia has not reached that in the USA where some not for profit operators have become as ruthless in exploiting vulnerable patients and defrauding the system as the market listed for profits.

The developments, the issues and the conflicts for the not for profit groups are discussed on a web page. A linked page illustrates the issues facing not for profit operators using an insightful 2003 article from The Age.

(Added June 2007) A key marketplace catchphrase has become "productivity". Every facet of our lives has been uncritically subjugated to it. Care of the sick and the aged are not excepted. All sectors including government services suffer as a consequence. An insightful article "It costs a bundle to give a damn" comparing the difficulties in improving productivity in aged and health care with the rest of the market was published in the Syney Morning Herald on 27 June 2007. It explains why from a productivity point of view so much downward pressure is being put on staff and other aspects of care. We are all experiencing the consequences.

see http://www.agedcarecrisis.com/index.php/news/68-media/2088-it-costs-a-bundle-to-give-a-damn


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The multinationals

Australia has been targeted by a succession of dysfunctional US multinationals. Each has been welcomed by Australian politicians. The conduct of these companies has been so unsavoury that concerned citizens have challenged their probity and forced them all out of the country. As in the USA, Australian regulators proved to be singularly ineffective in protecting citizens in the face of strong political and market forces. To their credit some tried very hard.

In spite of all this politicians continue to maintain that the nature of a company, its origins, and its culture is irrelevant to its operations in Australia. A recent letter (pdf file) from my local politician expresses this view. I responded by challenging his justifications. This was enshrined in the coalitions aged care regulations in 1997. When the new minister (2007) for ageing was asked to change the regulations she responded by simply explaining what the regulations were. I responded by attacking them and asking politicians to press for change. (see web page)

The early US companies

Two giant US corporations HCA (Hospital Corporation of America) and AMI (American Medical International) entered Australia in the 1980s. Their market approach to health care was viewed with some suspicion but when it was realised that large sums of money could be made business interest increased. Although both companies had sold up and gone by 1989 they had a profound effect on thinking in Australia. At this time an excess of bureaucracy and under funding had alienated many managers in Australia's public hospitals. They readily embraced market thinking and joined with Australian business to form private hospital companies, some of which listed on the sharemarket. This was even though there was a steady decline in privately insured citizens to fill these hospitals.

By the end of the 1980s the private hospitals in many city's consisted of large numbers of ill equipped small cottage hospitals. Doctors were performing major surgery in unsuitable settings. Large injections of funds and consolidation were required to build better hospitals. The sector was languishing.

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The second US invasion started in 1991 when the West Australian company Markalinga was threatened with bankruptcy. The US giant National Medical Enterprises (NME) seized the opportunity and bought into Markalinga renaming it Australian Medical enterprises (AME). It had promised to revitalise the private hospitals in Sydney.

At the time a massive scandal involving fraud and the misuse of patients was unfolding in the USA. A long, complex and protracted battle to force the company out of Australia followed. It had paid about $1 billion to settle fraud and patient actions in the USA.

Politicians were extremely resistant to confronting the damning facts. They continued to procrastinate and support the company until the exposures became so embarrassing that they had no choice but to act. The company sold up in 1996. In 2002 a new US scandal occurred. Hundreds of patients had been needlessly subjected to open heart surgery in California in order to increase profits. The CEO of the Australian operations was an executive in that region. West Australian Health authorities had been concerned about something like this happening in Australia. Their advice in 1993 to eject the company had been ignored. By 2006 the company, now called Tenet Healthcare had paid another US $1 billion to settle a multitude of fraud charges. Could this have happened in Australia?

Attempts by inexperienced Singapore company Parkway Holdings and the French General de Sante International (GSI), to buy AME were apposed by many. GSI was in the midst of a scandal involving inappropriate market focussed care in the United Kingdom. The Australian company Mayne Nickless bought AME.

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Columbia/HCA (now renamed HCA)

The new coalition government was more enthusiastic than labour in welcoming multinationals. In February 1997, Columbia/HCA the largest company in the USA and the world announced plans to invest $1 billion in Australian hospitals and rejuvenate the private system. Politicians were delighted and welcoming. Its business practices at the time were the subject of intense public and medical criticism. Objections were lodged with the Australian Foreign Investment Review Board (FIRB) and a group of doctors visited the USA where they were unimpressed.

When FBI raids swept through Columbia/HCA hospitals in March 1997 the company abandoned its plans to operate in Australia. This was the first of a series of raids and investigations into a massive company fraud. The company paid US $1.7 billion to settle the allegations.

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Sun Healthcare

This was a nursing home company with a dysfunctional business model and a poor track record for care and fraud. It had built its empire by providing step down care where it was able to exploit weaknesses in the US Medicare system. It entered Australia by buying into Alpha Healthcare at the end of 1997 and planned to buy into nursing homes here. Objections were lodged with FIRB. NSW, the state where it would operate also objected and asked FIRB to reject the company. FIRB is only a confidential advisory body and the final decision is made by the deputy treasurer. The decision was made to overrule the NSW objection and allow Sun into Australia. Within weeks the minister for health announced plans to revolutionise Australian hospital care by using step down care, a Sun specialty.

Sun Healthcare's expansion was curtailed when a probity review in Victoria found it wanting. At the same time the US government had stepped in to stop the rorting of Medicare by step down care providers. Sun could no longer pay the interest on its loans. It entered bankruptcy in the USA and then in Australia where its interests were sold.

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This giant US rehabilitation company dominated that sector in the USA. It bought a rehabilitation hospital in Melbourne in 1998 but made no attempt to expand further. At the time it was probably the only US giant with a clean record. In March 2003 the FBI raided its headquarters in the first step of an investigation which revealed that its success was based on a US $4 billion accounting fraud.

Victorian authorities were immediately advised and kept fully informed. They were extremely tardy in acting and it was not until 2006 that the hospital was sold.

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Vista Healthcare

Tenet Healthcare sold its international holdings, based in Singapore in 1996. In 1997 several of Tenet's international executives and some of those from Parkway Holdings formed the company Vista Healthcare. Its major shareholder was the New York banking group CHASE ASIAN EQUITY ASSOCIATES (Chase Manhattan). It maintained close links with Tenet Healthcare. Vista expanded in Asian countries.

In spite of its recent experience with Tenet, Australian authorities allowed Vista to quietly buy an Australian hospital in 1999. It did not expand further. I only learned of this much later after the UK insurance giant BUPA had bought Vista in 2001. I suspect that BUPA has since sold this hospital.

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The US Wall street company Citigroup is probably the worlds largest financial and banking conglomerate. Citigroup, its predecessors, and its subsidiaries have been at the centre of scandal after scandal over the last 10 to 15 years. It has paid out many billions of dollars to settle fraud actions and actions claiming that it had set up frauds for others including Enron and Worldcom. It has also been involved as banker and adviser to US health care corporations including HealthSouth.

Purchase of Mayne Hospitals:- In 2003 Citigroup's Asian venture capital arm CVC Asia Pacific led a Venture capital buy out of Mayne Health's troubled hospitals. The new group was called Affinity Health. It was not publicly disclosed in Australia that this was a Citigroup operation although the international press reported this. To bring the issues to the attention of the profession an article setting this sale into the context of what had been happening in Australia was published (pdf file) in New Doctor at the time.

When it was learned that this was Citigroup objections were lodged to the transfer of hospital licences to Affinity Health. NSW spent 18 months doing a probity investigation and then granted licences with conditions limiting operations and requiring compliance processes.

Citigroup elected to sell its hospitals at this time, two years earlier than it had originally planned. One can only wonder if this was for the reasons Affinity Health gave. One can only speculate as to whether NSW would have withheld licenses had they not sold, or whether the conditions imposed precipitated the sale. As far as I am aware the imposition of these conditions was never publicly disclosed.

STOP PRESS Purchase of Development Corporation of Australia (DCA):- DCA entered radiology and the nursing home sector in 1998. It rapidly expanded until it became the largest nursing home operator in both Australia and New Zealand. By 2006 it was in some financial difficulties and its share price plummeted. CVC Asia pacific and another Citigroup entity, its European venture capital group, CVC Capital Partners, mounted a takeover. DCA shareholders accepted the offer. The deal was approval by the FIRB and by other regulators.

For a variety of reasons nursing homes are many times more at risk from inappropriate commercial pressures than hospitals. I have indicated above that it is the leverage which doctors exert that has protected hospitals from the US fate. They have no leverage in nursing homes and the consequences of this are already apparent in Australia where the situation has gone from bad to worse and now resembles the USA.

Objections had been lodged with the FIRB and with the federal authority approving aged care providers. Even though this was a group which had so concerned regulators in the hospital sector that restricting conditions had been imposed, it was permitted to dominate our nursing home sector.

In 1999 I had corresponded with the minister for aged care's department and with authorities. From that correspondence I deduced that the probity provisions about which the department had boasted to me in 1994 had been removed by the 1997 aged care legislation. The most that they could say was that they were concerned that only suitable people provided aged care and that the regulations had been structured to accomplish this. I have put some of that correspondence on to this web site.

Some months after I lodged my objection, and after a request, the government body assessing approval status replied to tell me that Citigroup's CVC Asia Pacific had not been required to seek approval as an operator because it was buying a company that already possessed approval status. - so contradicting the assurances I had been given in 1999. This matter was taken up politically and I received assurances from the two ministers concerned that the regulations would be revised. These events are described on a web page with links to copies of the correspondence. By October 2007 there were serious doubts about what the ministers actually planned and whether they did anything at all.

STOP PRESS Oct 2007/Aug 2008 BUPA Purchases the DCA nursing home empire:- In October 2007 the giant British not for profit (but commercialy focused ) company BUPA (new web page Oct 2007) purchased DCA's nursing home empire from Citigroup. Efforts to find out whether the promised changes had been made and whether BUPA would have to seek approved provider status in its own right met a brick wall.

I eventually learned that nothing had been done but by this time a new government was in power. I have attempted to press labor to make changes but it is clear that the new minister does not intend to do so. These efforts and governments responses are tracked on a separate page where this important issue is canvassed fully.

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STOP PRESS Home Instead Senior Care:-

Australia's new market in aged care has proved to be a disaster. The number, quality and motivation of staff in nursing homes has plummeted. The sector is characterised by disinterest. Neglect and elder abuse are rife.

One of government's more sensible responses to the 2006 elder abuse and rape scandal in nursing homes has been a concerted effort to keep people at home by providing home care. Incredibly they have elected to bring in a US giant home care fanchising company - probably the largest in the world.

Home care is provided by individuals in the residents own home where there is no supervision or oversight. If marketplace practices have the same demoralising effect on home care staff as they have in nursing homes then this may become a far more serious problem than in nursing homes.

Home Instead seems to have a good track record but so did HealthSouth in 1998. Competitors may not behave as well. Home Instead is unlikely to have become the largest in the world by being nice to little old ladies. Marketplace success comes from smart market practices, shrewd marketing and branding.

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Multinational Insurers:- The French company AXA bought into Australia by purchasing National Mutual. It became the major health insurer in Victoria and South Australia. It joined with Mayne Health and the federal health minister in an attempt to drive doctors into managed care contracts. It sold its health insurance business to the United Kingdom health insurer BUPA. BUPA has been particularly aggressive and hard nosed in negotiating contracts with hospitals.

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Quest Diagnostics:- Quest Diagnostics, an operator of diagnostic laboratories entered Australia when it bought Smith Kline Beecham's laboratories. Quest was formed when Dow Corning spun off those laboratory subsidiaries that had been involved in the massive labscam fraud in the USA. It still operates here. Smith Kline Beecham was also involved in this fraud and paud US $325 million.

For more information click on the company name links above

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Hospital corporatisation

The early years

Not for profit church groups typically operated private hospitals the proceeds of which were used to provide care to those who could not afford it. With the establishment of the public hospital system these not for profits continued to operate private hospitals and use the proceeds for charitable purposes. Some were funded by government and continued to operate their charitable hospitals as public hospitals.

During this earlier period a number of doctors and private individuals established private hospital companies. Paul Ramsay established his company in 1963 and a number of other entrepreneurs followed. Moran built his nursing home empire. Some of the practices of these early medical entrepreneurs were questionable.

Not for profit groups still operate half of all private hospitals in Australia. The sector now operates as a competitive marketplace and they have been forced to adopt a market mode of operation. I believe that their ethos and culture has suffered.

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The birth of market medicine

Some of these early Australian companies also entered the US and other international health care market places. Paul Ramsay operated in psychiatric care and owned a managed care company in the USA. Their influence and the influence of the two US companies that operated in Australia popularised marketplace thinking in health care and made it legitimate.

By the early 1980's the public hospital system was in crisis because of its increased popularity, bureaucracy, and the refusal of government to properly fund the system. Unhappy hospital administrators like Dr Barry Catchlove were the meat in the sandwich. The marketplace was booming and to these idealistic administrators the ready access to capital and private funding promised them the freedom to provide the sort of hospital care they dreamed of.

Many left the public system and formed companies in partnership with businessmen. These groups started buying hospitals. They borrowed and listed on the buoyant share market. They promised their shareholders growth and profit. Their idealism was soon blunted by the harsh realities of a cost cutting profit centred marketplace. I argue that only those able to do whatever it takes while deluding themselves that they are meeting their ideals survived. Not many did.

Crunch time came with the market crash at the end of the 1980's and some of these companies including Ramsay and Healthscope only narrowly survived.

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Public hospital privatisation and colocation

The 1990s were bad years for private hospital companies. Private insurance rates were falling rapidly and hospital beds were empty. In addition to this most of the hospitals they had purchased were too small to be viable. They did not have adequate resources for more complex procedures and major surgery was being performed in facilities without the intensive care backup required.

The 1990's were the years when state coalition party governments saw savings in contracting public hospitals to private operators and private operators saw themselves as so much more efficient that they could do this and generate a steady profit.

At the same time governments saw savings by colocating private hospitals on public hospital campuses and sharing their costly MRI scanners and other facilities. Companies saw the public hospital emergency departments as a source of large numbers of referrals. Both saw this as a way of providing more resources for more sophisticated care.

Most of this was wishful thinking. Public hospital privatisation was a disaster as the companies were unable to operate as efficiently as public hospitals could. Huge sums were lost and the public most of whom had opposed the idea from the outset were disenchanted.

The disparity in ethos and mode of operation in colocated hospitals was so different that this sharing did not work well. The flood of referrals did not eventuate. Only those hospitals in wealthy areas which would have been viable anyway prospered. Most contracts awarded for colocated hospitals lapsed and the hospitals were never built.

The concepts behind these ideas were idealistic pie in the sky and most companies sustained further losses at a time when they were already struggling. Healthscope and Australian Hospital Care suffered huge losses. Labour had been ideologically opposed to privatisation and had fought this bitterly in some states. When labour regained power in most states in the late 1990s the privatisation era came to an end. In most threatened hospitals there was a huge sigh of relief.

Paul Ramsay had been far more astute. He operated privatised Veterans Affairs hospitals where the arrangements were far more realistic. These were profitable so that Ramsay had a steady source of capital. He was also more selective in his colocations and these were either profitable or broke even. He was able to harbour his resources and put himself in a strong position to capitalise on the boom in private insurance which the coalition parties promised would occur when they gained power.

Click Here to explore the privatisation of public hospitals and the colocation of private hospitals

STOP PRESS (Oct 2006):- Unbelievably ideology continues to triumph common sense. The October 2, 2006 ediction of Australian Medicine, the AMA's mouthpiece reports that the federal minister for health is once again advocating the privatisation of public hospitals using the same disproven one size fits all arguments. The logic is like saying that because a horse has 4 legs and we can ride it, therefore we can ride a mouse because it also has 4 legs. The argument fails because we all know the difference in size makes this ridiculous. Because most attending the doctor to not appreciate the essential differences (pdf file) in health care the argument sounds credible and floats. Even the minister responsible can accept it and not challenge his ideology. The AMA opposed the suggestion.

This is particularly worrying as there are moves to resolve the federal/state health problems by handing state control of hospitals to the federal government. The coalition federal government also controls the senate so can pass any legislation without opposition and curtail debate. The dragon keeps growing new heads.

2006 Privatising public hospitals

Health Minister Tony Abbott has flagged the idea of having Australia's public hospitals run by private companies, saying private operations might do a better job than governments.
"Its near universally agreeed that the private sector has much to contribute to running banks, airlines, drug companies, shipping lines, and engineering projects." Mr Abbott said.
Public hospitals private? by Kylie Walker, Australian Medicine October 2, 2006

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Managed Care and Leverage

During the 1990s doctors resisted all efforts to induce them to enter into managed care contracts. Hospitals had no choice. Many of the hospital companies in fact strongly supported government and the insurers in advocating managed care contracts. Mayne Health joined with both in an attempt to tempt and pressure doctors into contracts. Mayne akienated doctors and kater paid a heavy price. Paul Ramsay owned an HMO in the USA and supported the concept.

Under this system insurers offered hospitals contracts to care for their insured citizens. Providers competed by tendering to provide the services and win the contracts. Although this was supposed to be about quality as well as costs, quality is a nebulous feel good concept which is unmeasurable. The contracts were about cost and what they could get away with.

What happened was that in areas where there were competing hospitals, the providers were forced to tender at or below cost in order to win the contract and not have their hospital standing empty. Empty hosptals lost even more money. To avoid losing money providers were forced to reduce standards and staffing. Care was put under pressure.

Success came to depend on avoiding competition by securing leverage. Mayne Health which owned half of all for profit hospitals attempted to do this by using its size as leverage to dominate the negotiations. Unfortunately for Mayne its hospitals were all in large cities where there were many competitors. Its hospitals stagnated and management was under pressure. Mayne still had a large capital reserve built up over many years from its trucking business - a business that collapsed when the collusive practices on which it was based were stopped.

Ramsay and Healthscope succeeded in avoiding competition by owning hospitals where there were no local competitors. These included hospitals in country towns and specialist hospitals where there was sufficient work for only one in each region. They were in a position to dictate the terms of the contracts. This put them in a position to acquire competitors and harbour their resources.

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The boom years

Although the coalition gained power in 1996 it was not until 1998 that they introduced measures which effectively reversed the decline in private health insurance. Insurers benefited immediately but it was not until 2000 that the benefits flowed through to hospitals.

At this time Mayne Health blundered again by turning to marketplace solutions. They appointed a renowned corporate takeover expert and business Mr Fixit with no health care experience to sort out their problems. The doctors were already alienated and when Mayne's new manager rode roughshod over their concerns, by introducing marketplace changes which they believed impacted on care, they took their patients elsewhere. Mayne's profits collapsed and Mr Fixit was replaced. The hospitals were sold to Citigroup Venture capitalists and renamed Affinity Health.

Ramsay and Healthscope were in a strong position to acquire the competitors who had been drained during the lean years. Both expanded rapidly and in 2005 Ramsay bought Affinity Health's hospitals.

Australia is now essentially a two hospital company country. There are only one or two other small hospital operators. Ramsay dominates. Hopefully these two companies will be sensible and work together successfully with insurers. The sector needs to be protected from any more damaging competition. The danger is that blind ideologists in government will see this situation as anti-competitive and will try to bring in another giant multinational.

To understand the thought processes behind the competition ideology which gave rise to these policies we need only examine a speech given by Graeme Samuel to the World bank in 2000. The lack of insight is revealed in that he was advocating a similar system for the developing world. This is bizarre to anyone who has been there. It is like advocating this for Arnhemland in the Northern territory. Samuel now chair of the ACCC was at the time the government appointed chairman of the National Competition Council (NCC).

I have examined the corporatisation of hospitals in greater detail on other web pages and there are multiple pages examining the operation of each of the major Australian companies.

Click Here to explore the corporatisation of Australian hospitals


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Diagnostic Services

Radiology and particularly pathology are capital intensive and technology dependent. They are better suited to consolidation and corporatisation. The market has seen the potential. An industry which was once dominated by groups of medical specialists has rapidly consolidated. Companies rushed to buy up radiologists and pathologists practices turning many of them into instant millionaires. Almost all pathology and radiology is now provided by a small number of corporate operators.

Both radiology and pathology depend on referrals from general practitioners and specialists. Although lip service is paid to competition most services are adequate and competition based on standards is not a major factor. While branding helps geographical location is the key to success.

The competition is to locate their services within hospitals and in complexes housing GPs and specialists or to gain control of General Practices and specialists, then house their businesses in the same company owned facilities where their diagnostic services are located.

There is consequently considerable pressure to find ways of enticing general practitioners to refer them work. There are many accounts and accusations about unprofessional and illegal activities, although these seldom lead to convictions. They include paying excessive rental to GP owned complexes when renting space, and hidden kickbacks such as supplying staff for the referring doctors. It is clear that unsavoury practices have been common in some sections.

Click Here for the web pages exploring the corporatisation of pathology and radiology, and the companies involved


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Dialysis Services (New August 2008)

Renal Dialysis (artificial kidney) services in Australia have traditionally been provided by hospitals and by doctors. There has been an increasing trend to provide dialysis services in clinics nearer to the patients home and even in the patients home. Over the last few years three large for-profit multinationals have been welcomed into Australia by politicians and granted licenses to operate dialysis services and clinics by state authorities. States have entered into PPP agreements contracting the dialysis of public patients to them.

Studies in North America have shown that the death rate in for-profit dialysis services is higher than in not-for-profit. The dialysis marketplace in the USA has been plagued by numerous fraudulent practices. Fraud investigations are ongoing. Fresenius has the distinction of paying the largest fraud settlement in the sector and is again under investigation. Gambro Healthcare (now Diaverum) is a repeat offender, re-offending when operating under an integrity agreement. Faced by a third investigation it recently sold its US dialysis clinics. Baxter has a better track record for fraud but there have been problems with the safety of its equipment.

All Australian states have probity requirements for licenses. State authorities are responsible for vetting applicants. Information about the increased death rate and all of these frauds was readily available and widely publicised in the USA but it was not reported in the Australian press. By any reasonable standard such companies would fail a probity assessment and not be eligible to provide these services in Australia.

The web pages in this section examine what happened and asks how such a situation came about. They ask who the authorities we pay to look after our interests are actually looking after, and the politicians we elected to serve the nation are actually serving?

Click Here to explore the dialysis frauds and the entry of these companies into Australia

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General Practice

The early years

The corporatisation of general practice has been a contentious issue and occasioned much debate. This commenced in the late 1970s and early 1980s when a number of entrepreneural doctors entered the sector. The pioneer was the notorious Dr Geoffrey Edelsten who set up a chain of fast food style smart medical clinics across the southern states. The general market ambience and style of practice upset much of the profession. Edelsten ended in prison and was suspended from practice. I simply have not had time to go back and explore his career so there is no web page.

A one time colleague Dr. Ian McGoldrick operated hospitals, general practices and a number of other businesses. His career was almost as chequered as Edelsten's and he spent most of his life struggling to get back onto the medical register after a series of quality of care scandals in his own practice.

Dr Tom Wenkhart was another colleague and one time partner of Edelsten. His main focus was pathology but he also operated hospitals and medical clinics. His career was also chequered.

Primary Health founded by Dr Alan Bateman was far more successful and is still thriving. Its early years were characterised by some spirited disputes with the Health insurance Commission who were concerned about its practices.

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The modern era

General Practice corporatisation took off as an acceptable but controversial marketplace activity in the early 2000s. Even though similar enterporises had failed disastrously in the USA a number of business groups saw potential and large profits. Pathology providers saw benefit in capturing a market of compliant GPs. There was wild enthusiasm in the sharemarket and these new companies raised large sums by floating on the share market.

There was a wild scramble to buy up general practices and companies paid huge sums to buy practices and then entered into contracts with GP's. About 6% of general practices were corporate owned before the bubble burst. This was another market illusion.

General practice is person intensive and each GP requires support staff. The system promised to relieve them of administrative duties and allow them to concentrate on care. GPs were already stretched and overworked and there was little room for efficiency gains. The groups who benefited were the pathology and radiology companies who provided services in the complexes where the companies housed their practices.

There was at this time intense concern in the medical profession about the contracts with the companies. The concern was that companies would use unethical pressures and financial carrots on GPs to induce them to provide poor care money making services (5 minute medicine) and over-service with diagnostic tests.

The Australian Medical Association (AMA) engaged in discussions with the companies and an agreement in regard to acceptable conduct was signed. It is interesting that Primary Health remained highly critical of the AMA and refused to sign the agreement.

Almost all of these companies failed to make money and were dissolved or sold to one of the pathology groups. Independent Practitioner Network(IPN) in spite of its name was closely related to the successful pathology firm Sonic Healthcare to which its referrals went. Sonic supported it, kept it out of bankruptcy and when a hostile takeover was mounted bought it.

The exception has been Primary Health. It has gone from strength to strength and is still growing and offering doctors large sums for their practices. I do not understand its model or why it has succeeded so spectacularly where others have failed.

I wrote a number of pages about the corporatisation of general practice in 2002. Not all of those pages have been updated.

Click Here to explore the corporatisation of general practice

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Wrinkle ranching - the aged care bonanza

Aged care on this site

Aged care has not been one of my interests and I have previously avoided this in Australia. No multinationals had entered the sector. I did explore and write many pages about aged care in the USA. This was to repay the debt I owned all those wonderful US citizens who had so willingly sent me information about Sun Healthcare and the many other nasties from that country. Without them some would still operate in Australia. This aged care information came with the information about Sun Healthcare. It seemed appropriate to bring it together in web pages. The response from US citizens who email me suggests that it has been useful..

I have been concerned at the consequences of Australian government aged care policies and had corresponded with various bodies about this on a number of occasions. The aged care crisis group had already developed an excellent site and was providing a good service.

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Deciding to write about aged care

The rape scandal in January 2006 was the catalyst that caused me to turn my attention to Australian aged care and look at what was happening there more carefully. I found myself wading through vast numbers of wildly enthusiastic business reports beating up the opportunities for profit in the crumbling elderly population and capitalising on the misfortunes of the aging baby boomers. I felt my approach to these problems was sufficiently different for me to organise this material and write pages about retirement villages and nursing homes.

My response to the prospect of greedy investors scrambling to be involved - gloating as they squeezed profits from the frail bedridden, the demented and the incontinent is best described as "YUK". That this is what nursing home care has become is readily apparent when all the material is brought together. This situation is well illustrated by a satirical piece written by a disillusioned nurse aid in which this nurse compares for profit nursing homes with battery farming. In the USA it is usually described as warehousing.

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Comparing with the USA

The situation differs from the USA in that step down care (subacute care) has not yet become a bonanza and a source of great wealth as it did in the USA. Nursing home providers are consequently under greater pressures when trying to wring profits from care.

Unlike the USA only 25% of nursing homes are for profit. Despite this the mode of operation in all sectors has shifted from a humanitarian focus towards market thinking and a focus on profitability. This has created a crisis of identity for the not for profit operators.

The other difference is that the for profit sector is still fragmented and the majority are privately owned for profit companies. There is only one large market listed for profit nursing home company, Development Corporation of Australia (DCA). It has only been in the market place for a few years and remained in a money spending expansionist phase for several years. There was insufficient time for the adverse changes and poor care encountered in the US market listed sector to appear.

When DCA cane to the stage where it had to deliver the profits from nursing homes that it had promised it faltered. The indications were that it was unable to do so and its share price tumbled. Its founder and its managers seized the opportunity to get out. DCA sold to a Citigroup Venture Capital group (private equity) marketing themselves as turnaround experts. Citigroup is a company tarnished by frauds and scandals involving the exploitation of vulnerable and trusting citizens.

Although there are few studies available the differences between for profit and not for profit services are readily evident from the accreditation agency's sanctions. They mirror the USA. The same pattern of a wide spread of very bad to very good care in the services provided by private for profit companies is clear. The clustering and distinction between nor for profit and market listed companies so evident in the USA has not yet appeared.

As in the USA there has been a steady deterioration in care and a failure of the oversight and regulatory mechanism. This is in spite of multiple attempts to address the failures.

As in the USA the financial risks associated with providing care have been reduced by the formation of trusts which own the nursing homes and then lease the homes to other operators. The banks (private equity) have played a major role in this in Australia. This has advantages in protecting investors. As I see it this increases the number of shareholders demanding profits and puts the people actually providing care under even more pressure from market focussed entities far removed from the coalface. They do not see what is done there to meet the financial objectives they set.

Private equity has come to play a dominant role in aged care in Australia. In 2007 two submissions indicating the likely adverse impact of private equity ownership on health and aged care were made to a senate inquiry into private equity. Both were discounted but, within weeks, studies in the USA showed that this had occurred there. Hearsay accounts and confidential information given by nurses afraid to speak out publicly suggests that this may be so in Australia as well. There is insufficient transparency in Australia and so not enough information to determine whether this is so here

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In Australia

The root cause of the problem in both countries lies with staff and with the impact of a market and profit focussed system on them.

In both countries altruism, dedication, professionalism and personal responsibility have been degraded and replaced by a focus on profits and process, a focus in which caring individuals become employees - economic entities whose value is measured in terms of cost, efficiency, productivity and throughput.

Not surprisingly skilled and motivated staff become demoralised. They have walked away in droves. Few young people are motivated to train as nurses and enter the sector. Senior nurse managers have baulked at what was required of them. There has been a high turnover of nurse management. Nurses prepared to abandon their humanitarian mission and do what was required have been promoted at the expense of those who were critical. This has resulted in severely dysfunctional management.

The vacuum has been filled by people off the street who lack training and motivation. They are not there for the residents but for a job. Understaffing, deskilling, disillusionment, apathy, and disinterest are widespread.

The consequences became apparent within 3 years of the new 1997 policies. Gross neglect, appalling standards and the use of cheap outmoded treatment resulted in serious complications at Riverside in 2000. An ongoing series of scandals followed over the years as the situation continued to deteriorate.

The situation was so bad that by 2006 there were reports of staff taunting demented residents for amusement and management ignoring this. Residents were it was claimed sedated and kept in bed so that they did not require care. A number of rapes and sexual abuses occurred around the country. In one instance this was observed by a nurse who did nothing for 2 months. A nurse manager did not see it as her role to report the rape of one of her charges.

This is a frightening reflection of what has happened to the carers who once sought to make the last years of life tolerable and even rewarding for the old folks they had come to know and love at an intimate personal level.

There can be no doubt that what we are seeing is symptomatic of a malaise that is systemic and across the entire industry although it is likely that the for profit sector is most affected. This is reflected in accreditation findings.

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Political dishonesty

Politicians including the prime minister and the minister for aged care have rushed to isolate these events and claim that what has happened is isolated and the exception. The rest of the system is they claim exemplary, and the failed oversight system is one of the best in the world. This is disgraceful, dishonest and a disservice to Australians.

Instead of addressing the problems the government has placated advocates and the public by making much of their efforts to once again tighten and reinforce the oversight process. These processes do not cause the problems and they are increasingly burdensome for those who provide the care.

The major cause of the problem is government policy. This is a policy that turns a humanitarian and caring service into a battery farm, in order to generate greater profits for shareholders. Worse still soon after the rape scandals in 2006 the minister for ageing was out there promoting the government's marketplace policy to Australian citizens as the solution. Our gullibility it seems is endless.

This is an unforgivable betrayal of Australian citizens. It is past time that Australians woke up and made it very clear that any government which does not reverse these policies before the next election will not be elected. They did it to preserve Medicare in the 1996 election. It is time to do it again.

The labor opposition did not offer to do so in the 2007 election. Disillusionment with the coalition government was such that labor were elected anyway. The new labor government did not have a different aged care policy and have not indicated that they plan anything different. When challenged they have simply repeated the previous governments rationalisations.

A tree of web pages explores the market's interest in aged care in progressively greater depth.

Click Here to go to the root page of the Australian aged care section.

Click Here to go directly to the section of the site map listing the aged care pages

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Private Equity STOP PRESS October 2007

Private Equity Investment has boomed first in the USA and then in Australia. Health and aged care have been targets in both countries and this investment has grown almost exponentially. Two submissions pointing out the threat of this to the sector were made to a senate inquiry in 2007. The concerns were discounted in their report but within only 4 weeks a major study in the USA had shown a marked negative impact on nursing home care in the USA where it has now become a major issue.

It has also been revealed that in spite of the potential adverse consequences most of these private equity groups have very probably not been required to seek "approved provider status" from the agency set up to vet them and consequently have not been assessed to see whether they are the sort of "suitable organisation" which authorities claim the vetting process ensures.

Click Here to go directly to the web page dealing with these types of investment and the senate inquiry.

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International operations

Only a very few years ago Australia was bringing in multinationals to build up its health care marketplace. That process has now been reversed. Mayne Health expanded into Asia as did Gribbles Pathology and some other companies. Paul Ramsay operated in the USA for a number of years. Doug Moran ventured into the UK and Ireland. The diagnostic companies have targeted radiology and pathology in the UK, Europe and the USA. None of these ventures have been spectacular successes and some were disasters.

The major recent ventures have been in retirement villages and in nursing homes. DCA, and the trusts formed by banks have led the charge into New Zealand and Canada where they have become among the largest providers of these services.

These ventures are described on the web pages of the individual companies.

Click Here to go to the Australian site map to see what is there.

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Web Page History
This page created in 2000 by
Michael Wynne
Completely rewritten Sep 2006
Update July 2007, Oct 2007, Aug 2008