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 all of 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.

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Small Hosp groups

This page examines Benchmark, a private for profit hospital company owned and run by one man. It wanted to list on the stock market but never did electing instead to sell itself. It is an Australian example of a subgroup in the for profit system. Unlike publicly listed companies hospitals in this category sometimes work well but they are also at greater risk of abuse.

Australian section     

Benchmark Group
(1991 to 2004)



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Benchmark falls into a subgroup of the for profit hospital system. In this subgroup hospitals are purchased and run by individuals or small groups for primarily commercial reasons. They are not listed on the share market. The responsibility falls squarely on the shoulders of the owner who must set his personal profit priorities against the needs of patients and the community..

These owners are shielded from share market pressures so have greater freedom to serve the community. But they have their own commercial problems due to size. The care given is highly dependent on the motivation and character of the businessman - how he or she resolves the profit vs care dilemma.

My impression from what I have read and my reasoning is that because the care provided is so dependent on the sort of person leading the business and his or her motivation, these hospitals can be among the best, and also among the worst examples of poor services.

Benchmark became for profit when National Mutuals not for profit hospitals was bought by Robert Scarborough, a businessmen who already owned one hospital.


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National Mutual Hospitals

Health Funds in Australia were once not for profit mutual organizations which insured and also often provided services for their members. Many owned hospitals to serve their members.

Mutual Community operated in South Australia and Health Benefits of Australia (HBA) in Victoria. General insurer National Mutual took over these two groups in 1991.

Nov. 1990 Acquires hospitals

National Mutual is expected to continue to operate the six hospitals run by MCL-HBA, - - - - - .
NATIONAL MUTUAL TO ACQUIRE TWO MAJOR HEALTH FUNDS Australian Financial Review November 8, 1990

Jun. 1998 Benchmark status

Benchmark is one of the largest providers of private hospital services in Australia, with more than 700 beds under management in Victoria and South Australia.

It is 62 per cent owned by National Mutual subsidiary National Mutual Health Insurance and the remainder is held by medical professionals.
NatMut pulls the plug on hospital assets

Not for profit National Mutual operated Benchmark which owned seven hospitals in Victoria and South Australia. It was shortlisted to build a privatised public hospital in Port Augusta, South Australia in 1995 but this does not seem to have gone ahead.

The dominance of market ideology in the 1990s led to the privatisation of health insurance. Health insurance became a competitive market. Being both a payer (ie insurer) and a provider of hospital services with whom you negotiated competitively was now a conflict of interest.

National Mutual became a for profit organization in the early 1990s. Its health funds became for-profit. It was sold to the giant French insurer AXA around this time.

In 1997 AXA set up a competitive bidding system for hospitals in South Australia. It entering into managed care style contracts with the hospitals it chose to serve its Mutual Community members in South Australia - a choice based largely on costs. At the time this was fiercely disputed government policy. Doctors refused to be part of it.

When AXA awarded several contracts to the hospitals it owned, unsuccessful tenderers complained. AXA denied claims that it had favoured its own hospitals when awarding the contracts.

Aug 1997 Contracts with hospitals

National Mutual. Mutual marketing manager, Richard Bowden, denies that the five hospitals owned by its subsidiary, Benchmark-Mutual, were preferred for inclusion on the list, and competitors, Healthscope, and Ramsay Health Care, disadvantaged in the tendering process.
Backlash at health insurer's changes The Advertiser August 23, 1997

The strong pressures to win contracts are one of the reasons why hospital payments in South Australia are lower than in other states, resulting in arguably poorer services. Hospitals are tempted to bid too low to remain viable and must then reduce services to stay in business.

AXA's aggressiveness in keeping payments down undoubtedly laid the foundation for the bitter dispute between Healthscope and BUPA in 2003. AXA’s holdings had by then been sold to the UK multinational BUPA.

In the marketplace owning both the insurer and the hospitals with which it negotiated payments created a conflict of interest. It did not fit with the complex, competitive, multi-layered managed care like system advocated by the chairman of the National Competition Council (NCC) and largely supported by the government.

In 1998 National Mutual put its Benchmark hospitals up for sale.

June 1998 Benchmark

NATIONAL Mutual is looking to dispose of its hospital asset, the Benchmark Group, as part of a strategic redirection to concentrate on health insurance.

Analysts said the business would be worth up to $120 million.

Benchmark is one of the largest providers of private hospital services in Australia, with more than 700 beds under management in Victoria and South Australia.

It is 62 per cent owned by National Mutual subsidiary National Mutual Health Insurance and the remainder is held by medical professionals.
NatMut pulls the plug on hospital assets THE WEEKEND AUSTRALIAN June 27, 1998

July 1999 The story

The Benchmark Group, which owns a total of seven hospitals in Victoria and Adelaide, was until recently 80 per cent owned by National Mutual Health Insurance.

National Mutual acquired its interest in Benchmark as part of its takeover of HBA and Mutual Community health insurers in 1991.
$70m Spree Sets Up First Hospitals Trust Australian Financial Review July 14, 1999


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Robert Scarborough’s Hospitals

Robert Scarborough was a lawyer. He was reported as first buying a hospital in 1978. He must have sold it as it was later reported that his company started when he bought a single hospital in 1986, 8 years later. From the reports I deduce that he only had one hospital in his company Marrego when he bought Benchmark, which had seven in 1999.

May 2002 Scarborough's history - 1978

A former lawyer. Owns 100% of Benchmark Healthcare. Bought first hospital in 1978.
Health is wealth. Business Review Weekly May 23, 2002

May 2002 Scarborough

Melbourne lawyer Robert Scarborough is the sole owner of Benchmark Healthcare, which owns and operates nine private hospitals in Victoria and South Australia.

His net wealth is estimated to be $71 million, and could rise dramatically if rumors are correct that Benchmark will float.
Just a few dollars more Business Review Weekly May 23, 2002

Apr 2004 First hospital 1986

Mr Scarborough, a former lawyer who built Benchmark's portfolio from one hospital purchase in 1986
Scarborough Sets Benchmark For Sale
Australian Financial Review April 15, 2004


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Scarborough Buys Benchmark

Although several of the market listed companies were interested in Benchmarks hospitals, they were sold to Scarborough in 1999. He kept the Benchmark name. The sale was mediated through a property trust which listed on the market to raise the money for 5 of them. Benchmark remained a wholly owned private company leasing the hospitals but with plans to float.

July 1999 Purchase arrangements

Financial services and health fund group Australian Unity is to launch Australia's first hospital property trust with a $170 million-plus listing on the back of a major health care acquisition yesterday.

The company has bought four hospitals and a medical clinic from the Benchmark Group in a $70 million buying spree.

The five properties are to anchor a new vehicle which will parcel up additional hospital assets and be floated on the Australian Stock Exchange in the next few months.

The purchase includes 20-year leaseback agreements with Benchmark, which will continue to operate the hospitals.
However, in a pass-the-parcel sale transaction yesterday, National Mutual announced it had sold its 80 per cent of Benchmark, as did the 20 per cent of minority shareholders, to Mr Bob Scarsborough's company Marrego.

In turn Marrego was the official vendor yesterday of five of Benchmark's seven properties to Australian Unity.

National Mutual Health Insurance managing director Mr Richard Bowden said the 100 per cent stake in Benchmark was sold to Marrego for $36 million.

He attributed $28.8 million to National Mutual's 80 per cent shareholding, which was its book value. However, Australian Unity confirmed yesterday it paid $68.8 million for five of the properties, after an independent valuation by Arthur Andersen.
$70m Spree Sets Up First Hospitals Trust Australian Financial Review July 14, 1999


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The Hospital Portfolio

Benchmark bought a ninth hospital in 2001 and a tenth in 2002. In 2003 it entered into a management contract to run a community owned hospital in South Australia which was in financial difficulties.

Although it had roughly the same number of hospitals as Nova Health, it was twice the size. This was because its hospitals averaged about 100 beds each, more than double the size of Nova’s and Healthscope’s when they floated in 2002 and 1994. It was able to provide more sophisticated care and would have been in a much better position than either of these companies were, if it had floated.

Aug 2001 Another purchase

Benchmark Healthcare has bought South Eastern Private Hospital in Noble Park from Mayne Health, bringing to nine the number of hospitals operated by the group.

The sale results from Mayne Health's undertaking to the Australian Competition and Consumer Commission to divest the hospital as a result of Mayne's acquisition of Australian Hospital Care hospitals earlier this year.
Benchmark notches up ninth hospital The Age August 20, 2001

Sept 2001 Hospitals and size

BENCHMARK Healthcare is one of the biggest providers of private health care in Victoria.

It has six hospitals in Victoria and three in South Australia.

The company recently appointed Ian Thorley as its new chief executive officer.
Most of the hospitals have about 100 beds and a range of services including surgery and rehabilitation.
Mark of healthy career. Herald-Sun September 22, 2001

Mar 2002 Another purchase

MITCHAM Private Hospital has changed hands after being bought by Benchmark Healthcare last week.

Mitcham and South Eastern private hospitals were sold by healthcare giant Mayne under the Australian Competition and Consumer Commission's anti-competition regulations.
Benchmark in hospital care. Whitehorse Gazette March 6, 2002

May 2002 Size and services

Another private hospital company attracting investor interest is Benchmark Healthcare, which is 100% owned by a Melbourne lawyer, Robert Scarborough.

It is a bigger company than Nova. Although both have nine hospitals, Benchmark has 943 beds, more than double Nova's total. Benchmark offers a broader range of services: four hospitals have intensive-care units, one does cardiac surgery, two have accident and emergency facilities and four offer obstetrics.
Scarborough says Benchmark has been reviewing its funding and management options, and the most obvious path is a public listing. "We have canvassed a variety of funding source options, including an overseas health group and venture capital," he says, "but I think probably a limited float is the way we will go.

July 2003 A management contract

THE future of North Eastern Community Hospital has been secured with a private company taking over its management.

Benchmark Healthcare last week signed a 10-year contract to manage the 128-bed hospital and nursing home, at Campbelltown.
The NECH board will retain control of the hospital, with Benchmark Healthcare having the option of renewing its contract for a further 10 years when the current one runs out in 2013.
"In recent years, the hospital has endured significant cost pressures in areas such as insurance, medical supplies and the cost of new technology," Mr Allert said.
The 30-year-old NECH, on Lower North East Rd, is a non-profit, community-owned complex with 60 acute-care beds and 68 nursing home beds.
BENCHMARK TO MANAGE HOSPITAL. East Torrens Messenger July 9, 2003


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Company Policies and Practices

The indications are that Scarborough tried and probably did provide high quality care and staffed the hospitals well. Benchmark hospitals won prizes. A new CEO who came from Mayne Health in 2001, during Peter Smedley’s reign expressed all the right motivations about health care and was full of praise for Scarborough. Another CEO became SA Telstra Businesswomam of the Year in 2004.

Benchmark was not listed on the sharemarket so was not under pressure to grow too rapidly. It bought only in moderation. Too many acquisitions would have increased debt or required money from the markets. Instead it increased the size and the number of services provided in its hospitals and probably concentrated on the quality of the services. The former strengthened its position for a float in the competitive corporate marketplace.

When data from aged care in the USA is analysed, care in not for profit facilities is clustered in the upper half compared with for profit market listed facilities, which are mostly in the lower half. Convincing data from hospitals now shows the the same pattern. (see excellent presentation "South of the Border: Lessons From the United States" given to a Canadian Healthcare meeting by Dr. Claudia Fegan MD - downloadable from

When the nursing home data is examined more closely a subgroup of smaller for profit facilities, those not listed on the share market, can be identified. They are owned by individuals or small groups. When nursing home data is examined some of these are among the very best and others among the very worst. I have not seen data for hospitals.

Without the pressure from analysts, bankers and institutional investors these hospital owners have much more flexibility to provide good care and upgrade their facilities rather than grow them for growth’s sake.

This group comprises some highly motivated individuals and also some of the most unscrupulous rogues who can capitalise on the lesser degree of oversight in private companies to defraud the system.. The number of public facilities in the USA is too small for analyses, and there is less information in regard to this subgroup in hospitals but it is likely the same occurs. Perhaps Benchmark fits into this spectrum.

When motivated privately owned companies take their ideas and their practices into the share market by floating they have a rude awakening - as both Healthscope and Nova discovered. Today many smaller groups lack leverage so have difficulty in competing for money from insurers. They cut their losses by selling to large corporate raiders further consolidating the corporate sector.

Oct 2000 Award

The recipient for 2000 is the College Grove Private Hospital, recognised for its implementation of a geriatric assessment unit.

A member of the Benchmark Healthcare Group, College Grove is a 30-bed hospital located in the Adelaide suburb of Walkerville.
Unit's debut shows value / PRIVATE HOSPITAL AWARDS - A special advertising report The Australian October 18, 2000

Sept 2001 A market man claims values

I think people in the industry are aware of the social good they are doing. Thorley does not have a clinical background - he studied accounting and also has a masters degree in medical administration.

Before his latest appointment, Thorley spent 10 years at Mayne Healthcare and at one point was involved in running 20 hospitals.
Thorley says the best part of his role as CEO is that he has an impact on how the company runs and can work towards producing quality services.

"I think what we senior managers enjoy is creating an environment where nurses, doctors and technical staff all come together in what is a very intricate web of services and produce a quality product," he says.
"The owner (Robert Scarborough) has got absolutely tremendous values," he says of Benchmark Healthcare.

"It's a very attractive organisation for everyone."
Mark of healthy career. Herald-Sun September 22, 2001

Nov 2001 Nurse relationships

Beleura Private Hospital in Mornington has a program that's been successful in attracting nurses.

The 118-bed hospital is part of the Benchmark Healthcare group.

It has high-dependency and coronary-care units, surgical and medical services, a psychiatric unit, oncology, palliative care and an alcohol rehabilitation program.

In the past the hospital has had a waiting list of nurses wanting to work there, but the shortage has also affected them.

To counteract this, they have designed a skills program in which the hospital provides up to three weeks of fully supported paid personalised training.
Nurses on the fast track to success. Herald-Sun November 24, 2001

Feb 2003 Expanding hospitals

Meanwhile, private hospital operator Benchmark Healthcare has announced a $4 million upgrade of its College Grove Private Hospital in addition to a $16 million expansion of its Wakefield Hospital, now underway.

The number of beds at College Grove will double to 60 and at Wakefield they will rise from 123 to 160 and create about 80 new jobs.

Benchmark chief executive Catherine Miller said demand for private services justified the expansion.

"Both hospitals are operating at around 95 per cent capacity," she said.
$34m spree to help hospitals. Sunday Mail February 9, 2003

July 2003 New services

TWO new private detox services for people with addictions have opened at College Grove and Central Districts private hospitals, at Walkerville and Elizabeth Vale.

The services are a collaboration between Addiction Counselling Services (ACS), based at Norwood, and Benchmark Healthcare.
IN-PATIENT DETOX SERVICES FOR ADDICTS. Standard Messenger July 2, 2003

Jan 2004 Refurbishing

Benchmark Healthcare, owner of the Noble Park hospital, announced the completion of a building and major refurbishment program late last month.
Hospital facelift finished Oakleigh Monash/Springvale Dandenong Leader January 21, 2004

Apr 2004 Businesswoman of the year

CATHY Miller is the SA Telstra Businesswomam of the Year for 2003. She is chief executive officer of Benchmark Healthcare.
Cathy's money mix Advertiser, The (Adelaide) April 5, 2004 

Apr 2004 Upgrade

COLLEGE Grove Rehabilitation Hospital in Walkerville will be officially opened today as South Australia's premier, purpose-built private rehabilitation facility.
The redevelopment has doubled the hospital's capacity to 62 beds and allowed for its transformation into a specialist rehabilitation centre, including a state-of-the-art gym and hydrotherapy pool.
COLLEGE GROVE HOSPITAL ADVERTISING FEATURE State-of-the art for the best of health Advertiser, The (Adelaide) April 7, 2004


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Bidding for Mayne Hospitals

When Macquarie bank bid for Mayne’s hospitals in 2003 it entered into a consortium with Ramsay and Benchmark. The plan was for Macquarie to form a trust which would buy the hospitals and then lease them to Ramsay and Benchmark who would each take some. This would be a vehicle for Benchmark to list on the sharemarket, something Scarborough had wanted to do since 1999.

This local Macquarie bid was the preferred tender but the fact that the hospitals would be split and that the group was not prepared to assume Mayne’s past medical indemnity risks counted against them. The sale went to a consortium of venture capitalists led by CVC Asia Pacific, part of Citigroup. In 2005 Ramsay bought these hospitals from this group paying nearly 50% more than the venture capitalists. It was a setback to Benchmarks plans to list on the share market.

Oct 2003 Macquarie/Benchmark bid favoured

A Macquarie Bank -led syndicate comprising Ramsay Health Care, Benchmark Healthcare and a listed fund to be known as the Macquarie Social Infrastructure Group is widely seen as the frontrunner. However, the Macquarie camp is facing tough competition.
Mayne Sell - Off Proves Complex Operation Australian Financial Review October 7, 2003

Oct 2003 Structure of the bid

The bank would launch the Macquarie Social Infrastructure Group, housing at least 30 of the Mayne hospitals with a value in the order of $300 million.

Benchmark which is believed to have several fund managers committed to equity if its consortium succeeds would seek a listing in which founder and chairman Robert Scarborough would sell down part of his holding.

Ramsay would take between 12 and 15 of the Mayne hospitals, representing close to half the portfolio value, while Benchmark would take the balance of the domestic assets and three Indonesian hospitals, which would be on-sold to Asian operators such as Singapore's Parkway Holdings.
Mayne's Hospitals Sale To Top $800m Australian Financial Review October 20, 2003

Oct 2003 Pipped at the post

The private equity trio are believed to have outbid the Macquarie syndicate on price, as well as its willingness to take on Mayne's three Indonesian hospitals.
The Macquarie syndicate is believed to have baulked at the lack of ongoing protection against medical malpractice and insurance claims arising before the sale.
Mayne Sells 53 Hospitals For $800m Australian Financial Review October 21, 2003


Listing on the stock market

Scarborough bought the Benchmark hospitals in 1999 with the idea of floating them on the stock market within months. The climate in the market was never promising. He approached it several times but each time backed away.

Nova Health’s successful float encouraged him but when Nova collapsed the market went sour as everyone got the jitters.

The purchase of Mayne hospitals seemed to be the way into the share market, but it was not a good idea to float immediately after the setback of losing the bid.

Scarborough finally decided to do something in 2004.

Aug 2001 Plannng to float

PRIVATE hospital operator Benchmark Healthcare is considering listing on the Australian Stock to allow it to expand further in what it sees as a favourable private hospitals market.
Mr Scarborough, who has built up Benchmark over 25 years, said Benchmark would "certainly consider an IPO in the medium term".
Hospital buy lifts Benchmark pulse The Australian August 15, 2001

July 2003 Not a time to float

It's not a great time to be floating a private hospital operator, as Benchmark Healthcare and its adviser, NM Rothschild & Son, are considering. The business, which lawyer Robert Scarborough owns, has 943 beds and is said to have an NPAT of $10million (sceptics say $6million) rising to $12million next year. One issue is that it does not own the freehold for the properties, which are owned by trusts.
Ramsay merger off Australian Financial Review July 18, 2002

Nov 2003 Impact of losing the bid for Mayne

Melbourne lawyer Robert Scarborough 's plans for his Benchmark Healthcare were altered dramatically when his consortium failed to buy the jewels in Mayne Group's hospital portfolio. Benchmark was all set for a float if it succeeded with its bid, having pinned down commitments from institutional investors for cash.

But now Scarborough, - - - - - will most likely delay a float by 12 to 24 months.
Benchmark blues Australian Financial Review November 3, 2003

Apr 2004 The impact of Nova Health

Some industry analysts have speculated that raising interest in an IPO may be difficult after the poor performance of the last hospital group to list, Nova Health .
Scarborough Sets Benchmark For Sale Australian Financial Review April 15, 2004


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Ramsay buys Benchmark

In April 2004 Scarborough put Benchmark up for sale to see what he would get before deciding to float. The big three were all interested. As Ramsay offered a good price for all the hospitals Scarborough chose this safer option. Ramsay had only one or two hospitals in Victoria and South Australia. The others had several and faced competition regulatory issues

Apr 2004 Benchmark up for sale

Privately owned hospital group Benchmark Healthcare is gearing up for a potential $100 million -plus sale of its hospital portfolio as owner Robert Scarborough examines a variety of exit strategies.

Benchmark has provided financial details to a number of potential buyers of the portfolio of 10 hospitals in Victoria and South Australia.

Benchmark has estimated its portfolio is worth between $100 million and $130 million based on its financial projections and patient volumes for 2004-05 .

Mr Scarborough is believed to still favour an initial public offering of the business and has canvassed likely interest from institutions and fund managers in floating the company.

Mr Scarborough, a former lawyer who built Benchmark's portfolio from one hospital purchase in 1986 , has been seeking an exit strategy for several years and was close to conducting an IPO two years ago before deciding to continue expanding the business.
However, any trade sale could end up dividing the assets between several players due to problems some buyers are likely to face from the competition regulator over their existing market presence in Victoria and South Australia.
Citigroup Smith Barney's Andrew Goodsall said Ramsay would be the logical suitor for a number of reasons: its low-key presence in Victoria, which should enable it to avoid competition implications; its capacity to use cash and/or debt to fund acquisitions; and a "solid free cash flow".
Scarborough Sets Benchmark For Sale Australian Financial Review April 15, 2004

May 2004 Benchmark's value

Annual revenue for the group is believed to be about $200 million while the operating margin on Benchmark's 1000 beds is believed to be close to 15 per cent. Benchmark's asking price of up to $130 million is based on the group capitalising on a expansion of about 100 beds to increase patient volume next financial year.

However, some analysts believe the forecasts are bullish given the difficult regulatory and competitive environment facing most private hospitals.
Benchmark Eyes $130m For Hospitals Australian Financial Review May 3, 2004

May 2004 Ramsay buys

Ramsay Health Care Ltd (RHC) announced it has agreed to acquire all the shares in Benchmark Healthcare Group for $125 million. Benchmark operates 10 hospitals in Victoria and South Australia, comprising 980 hospital beds and 68 aged care beds, rising to 1,119 beds in 2005 as a result of capacity expansion now being developed. The group has an annual revenue of about $200 million.

May 2004 The hospitals

Of the 10 hospitals operated by Benchmark, four are owned outright, five are leased and one is a management contract.
APPENDIX: Benchmark Hospital Profile

Hospital - beds - state - service
  • Beleura -117 - VIC -Med/surg/psych
  • Peninsula - 135 -VIC - Med/surg/obs
  • Donvale - 80 - VIC - Rehab
  • Mitcham - 99 - VIC - Med/surg/obs
  • South Eastern - 116 - VIC Med/surg/A&E
  • The Valley -122 - VIC Med/surg
  • Wakefield -142 - SA Med/surg
  • College Grove - 32 - SA Rehab/geriatric
  • Central - 79 - SA Med/surg/obs
  • Districts - 58 - SA - Nursing home

RHC - agreement to acquire benchmarks 10 hospitals Australian Associated Press Financial News Wire May 24, 2004

May 2004 The decision

Benchmark also received bids from Affinity Health and Healthscope. However, shackled by Australian Competition and Consumer Commission concerns, Affinity was bidding only for the hospitals in South Australia, while Healthscope tendered only for the Victorian hospitals.

The three bids were believed to be similarly priced. Benchmark decided on Ramsay because it would not have to split the portfolio.
Ramsay Beds Down Another Purchase Australian Financial Review May 25, 2004


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One of the interesting things about the sale of Mayne hospitals in 2003 is that none of the multinationals showed any interests. Analysts were silent about multinationals. In the 1990s several multinationals entered or tried to enter Australia. Analysts were upbeat at the time and since then analysts have repeatedly speculated about a multinational takeover of Mayne. Politicians were encouraging multinationals.

In this firesale local groups were not really in a position to buy such a large business outright. The favoured local bid by the mix of Macquarie, Ramsay and Healthscope meant creating a property trust and dividing the hospital empire into several pieces. It was all rather messy. Any of the large multinationals could have bought it. They would have paid well to become the dominant provider in Australia. None were solicited and none came.

The final solution a purchase by Venture capitalists (even if the scandal plagued US based Citigroup was behind it) was perhaps a temporising measure prior to selling or floating the hospitals as a separate Australian company.

Less than 2 years later in 2005 Ramsay purchased these same hospitals paying the venture capitalists $400 million more than they paid for the hospitals in 2003. There is little to suggest that the slightly increased profitability justified this.

The medical and nursing professions would have strongly opposed a multinational (read USA) purchase but neither politicians nor the market has ever taken any notice of that. They considered these groups selfserving.

One can only wonder whether politicians and even the business community have at long last got the message about corporate medicine. This was spelled out by Ron Williams in 1992 and repeatedly confirmed since. Is there a glimmer of hope? Are they keeping all these hospitals in Australian hands and moving away from aggressive global competitiveness in health care. Our politicians and businessmen have never shown this sort of insight before so it may be wishful thinking.

Could it be that we will move to a two-airline type of private hospital system. Could a dominant Ramsay and Healthscope reach a detente in which each pays nominal service to the market and everyone allows them to make a reasonable profit in return for good care without damaging competitive pressures.

If we look at another example where ideology and the real world conflicted we have a precedent for this. There were several small areas in South Africa where strict apartheid simply could not be made to work. Behind the visible apartheid façade, it was simply ignored. The powers in South Africa wisely looked the other wat, provided no one challenged them with it.

Benchmark’s decision to sell so soon after losing the bid for Mayne, and Healthscope’s frantic recent scramble to grow so quickly are both compatible with this possibility.

Conspiracy theories can sometimes be positive and we need to hold on to hope!

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Web Page History
This page created May 2005 by
Michael Wynne
Minor additions Oct 2005