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.

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Corporate Practices

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Pathology & Radiology

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Gen. Pract. Corporatisation
Hospital Corporatisation
Entry to Privatisation
Privatisation Background
Australian states

Diagnostic companies

Sonic Healthcare
Sonic chronology
Mayne Nickless
Primary Health
Macquarie Health
Healthscope Path
DCA (I-med)

GP companies

Foundation chronology
LifeCare chronology
Mayne Health

Foundation's history in outline and a list of references.

 Australian section   

Foundation Healthcare
Outline and References

This page contains a month by month outline of the Foundation story. At the foot of the page I have listed the reference material used. Foundations practices and policy are described on the main Foundation page


I. Chronological Outline Foundation Healthcare

A. The Giltnet and Formulab Heritage

(This tells the story of Formulab which became Foundation)

September 1995:- The company Giltnet which it seems had gone under relisted on the stock exchange as Formulab Neuronetics. It is changed into a technology company promising a revolutionary artificial intelligence parallel processing computer developed by its new executive and 66% owner Anthony Richter. Richter is an eccentric who considered himself a genius.

Jan 1996:- The company reports A$5.2 million profit from $85million in royalties from sale of Voicemail and Security systems in the USA. It does a road show around the country and its share price soars.

Nov 1996:- It claims an alliance with US Hughes Aircraft Co and share prices soar further.

Dec 1996:- Richter's claim to have built a computer based on the human brain is exposed as nonsense by a Curtin University academic who indicated that "there is a severe limit on what it can do". It is reported that Richter is a self-styled genius who claims to be responsible for the next generation of the computing revolution. When the US reacts negatively to a demonstration of the computer the company loses A$200 million in value as its share price tumbles.

Jan 1997:- The Company attempts to list on the Nasdaq in the USA but this fails when its US supporters refuse to buy its stock. Share price, once over A$1 falls another 50% to 18 cents.

June 1997:- Formulab purchases Cavlec Electrical Engineering Services

August 1997:- Formulab attempts to list in the USA again and some complex share transactions take place. It moves its main office to the USA. During 1997 it loses A$10.6 million bringing accumulated losses to A$61.2 million. Formulab buys out a Singapore joint venture Voicemail partner and is described as in trouble losing cash and key staff

April 1999:- The Australian company whose share market capitalisation topped $A400m in 1996 is put into voluntary administration when it can't pay its creditors. Its international division follows soon after.

October 1999:- The company was assisted by insolvency expert Ross Norgard. He was building a reputation for rescuing failed groups. It was decided to sell the shell of the registered company rather than wind it up as creditors would get less than 1 cent in the dollar. The shell was bought by a group of Perth businessmen including multimillionaire Michael Boyd, the financier and moving force behind the very successful Sonic Healthcare. Boyd and his associates including Dr Ken Jones contributed almost half and a 10c share placement the rest. Boyd's private company, Covenant Nominees, owns about 36 per cent of Formulab.

B. Foundation Healthcare

Jan 2000:- With Boyd's reputation and a huge injection of cash from a float the company was trading at over a dollar by January 2000, making Boyd another A$28 million richer and now worth A$218 million. Boyd was elected to the board and some time later became chairman. Formulab commenced its planned expansion into health care purchasing a Perth group for A$234,000. It set aside $2 million for similar purchases and changed its name to Foundation Healthcare.

February 2000: - The company buys into pathology laboratories securing both Clinipath and Bunbury Pathology, also acquiring a 27.5% share in Clinipath Malaysia. It advises the market of its change of direction into general medical practice.

There is a sudden explosion of activity with Foundation, Primary Health care, Westpoint Corp, Mayne Nickless and Revesco all rushing to purchase General Practices and so gain control of the doctors who control the referrals on which their other businesses depend. The economic power of the GP's is recognised and the mad scramble to control their referrals commences.

April 2000:- Formulab has acquired the rights to 16 GP practices. It goes to the market to raise $14.5 million for these and other purchases. Boyd's strategy is to form associations with "radiology, pharmacy and allied health" and so create an integrated mechanism to exploit the commercial opportunities provided by health care. Formulab plans to "control 20% of Western Australia's general practice market within 18 months". In May it formally relisted as Foundation Healthcare.

July 2000:- Aided by a $38.8 million debt facility from Westpac, Foundation moves rapidly into Victoria, NSW and Queensland.

It buys United Healthcare Corp of Victoria for around $12 million. This is a group owning several medical centres in Melbourne. Its NSW purchase of Peak Health Group for $17.8 million provides it with 8 Sydney health centres and 160 doctors. Purchase of Queensland's Continuous Care Medical Centres Group adds three centres and 76 doctors.

By the end of the month Foundation controls over 400 doctors. It has a goal of 1000, one fifth of Australia's GP's. It purchases GP's practices with a combination of cash and shares so linking the financial interests of the doctors to referrals to the company's other services. This is a strategy which was quietly and very successfully employed by Columbia/HCA. It was abandoned as part of Columbia/HCA's fraud settlement in the USA. Practices like this were considered by the US system to be a hidden form of kickbacks and not acceptable. In Australia they seem to have government support.

As part of a $50 million capital raising by Foundation Sonic Healthcare puts up $22 million to own 10% of Foundation. The alliance is cemented with the chairman of Foundation and the M.D. of Sonic each joining the board of the other.

This sudden expansion and the raising of $100 million by Sonic to expand in pathology and radiology causes great concern among doctors and others. The potential consequences of vertical integration between the two for the care of patients were aired in the press. Foundation responded that the two companies were separate and that the strategy was to eliminate Sonic as a potential formidable competitor when Foundation expanded into the eastern states. Sonic did not operate in West Australia.

August 2000:- Foundation takes a 10% holding in Boyd's physiotherapy and dental group, Lifecare. This successfully links Boyd's three publicly listed health care ventures while creating the illusion of independence. He is on the board of each.

September 2000:- Foundation continues to buy up GP practices across Australia including Sydney-based Immediate Health Care with nine practices in NSW and ACT. It entered South Australia securing the managing rights to six practices. At the same time Foundation HealthCare posted a $A354,000 loss in the six months to 30 June and its share price wavered temporarily.

November 2000:- Foundation is praised for its bold strategy which has captured more than 900 GP's and 5% of the national GP market of $135 million a year. At the same time there is concern that the "sheer pace of its growth, coupled with a lack of published research from broking houses, leaves shareholders placing considerable faith in senior management". It acquires the Queensland group Medihelp, Australia's largest medical centre chain.

Its second half profits show that it has recovered. It declares a profit of $21 million for the year. The prospects for health care groups and Foundation in particular are reviewed very positively by market analysts.

Boyd's other company LifeCare reaches an arrangement to supply physiotherapy services in Foundation's Queensland clinics.

Jan 2001:- Boyd moves money into the satellite business and joins the board of Quadrant Australia as a non-executive chairman. Quandrant takes a $34 million investment in the reincarnated US-based Iridium. Boyd is at this time chairman of Foundation Healthcare Ltd, and a director of Sonic Healthcare, Lifecare Health, Silex Systems and Biotech Capital.

February 2001:- Foundation raises another $50 million from the share market with plans to double the number of doctors in its practices.

Foundation forms an alliance with Sigma Company, a pharmacy retailer. Sigma is to establish Guardian pharmacies in Foundation's 90 medical centres nation wide. At the same time Foundation sells its pathology companies to Sonic Healthcare so streamlining the relationship between this alliance of "vertically" integrated companies.

It starts exploring digital medical records and smartcards for patient information with ERG. Medical records are invaluable tools for profit hungry corporations, particularly pharmaceutical corporations. They are potentially marketable and Foundation has already established close links with Sigma. One wonders what will happen to patient confidentiality when competitive market pressures threaten the corporate bottom line. Australia's shadow minister for health is rightly concerned that access to medical records will be traded in the marketplace.

Institutional support for GP corporatisation is reflected in Mercantile Mutual's purchase of an 8.95% stake in Foundation Healthcare.

May 2001:- Foundation owns 6% of the GP's in Australia. It has been far more successful in luring GP's to its fold than its competitors Mayne and Primary Health Care, which have about 1% each. This is undoubtedly because Foundation offers the GP's so much more for their practices.

June 2001:- Sonic finalises purchase from Foundation of Clinipath in WA, Bunbury Pathology in WA, Latrobe Network Pathology in Victoria, and ERadiology in Brisbane. Foundation now has 14 centres in Queensland but the pressures of competition and uncertainty among analysts about its model have forced share prices down 25%.

July 2001:- Lifecare moves physiotherapy and dental services into Foundation medical centres in WA.

Foundation shares fall further to $1.40 from a previous high of $2.50. This follows an adverse analysis by a US Warburg analyst who criticises it for having paid above the odds to secure practices as part of a consolidation frenzy. He considered their earnings forecasts to be too optimistic.

Boyd responded by promising shareholders better communication with monthly reports to the market. He suggests the results might be 240% above forecasts. He predicts further GP acquisitions and the purchase of a specialist eye treatment practice.

August 2001:- Things become worse for Foundation. Many people speculate that the group is on the brink of insolvency. More analysts criticise it for paying too much for practices and express doubts about its business model. Some are advising investors to sell.

A messy legal action against Medihelp's previous owners in Queensland claims they misinformed about profits prior to selling to Formulab. The Australian Financial Review claims the court material reveals a company "racked by disputes over alleged shortfalls in projected revenues, unpaid rents on some medical centres, alleged breaches of contract and the possibility of multimillion-dollar claims for damages." Foundation issues a statement to the market rejecting these assertions and making it clear that it is not in dispute with any of its doctors.

The purchase of profitable eye specialist clinics has fallen through and the share price falls further to $1.05. Foundation is seen as a takeover target and Mayne Nickless as looking for GP practices. This is obviously unlikely given

Foundation has stopped buying up GP's practices. It indicates that it has been divesting property and diagnostic services to concentrate on their core GP business. They blame their poor profits and adverse balance sheet on delays in accomplishing this in the 2001 year.

September 2001:- Analysts concerns about its model and concerns about nasty revelations likely in the upcoming company's results halve the share price in just 3 weeks - down to 60 cents. Extensive write-downs are predicted. Sonic shares in contrast are soaring - up 40%.

When the results are published the losses are $28 million including write-downs. Foundation is criticised for " too-rapid growth, slow integration of acquisitions and problems with asset sale and lease-back programs". It has "spent $182 million in the year to June 30 but not made any money" and it has a "precarious" balance sheet with fast diminishing cash reserves.

Deutsche Bank re-rates the company to an 'underperform'. The share price, once $2.74 falls from 65 to 18 cents and then recovers slightly to around 40 cents. Despite this Deutsche bank predicts that Foundation has only 3 months of life left on " current funding and cash burn" - unless of course Sonic comes to the rescue.

November 2001:- The ongoing losses have been markedly reduced. Management promises that restructuring will generate profits. The figures for the month of November show a small profit but in December they are back in the red.

March 2002:- The company indicates that it is now concentrating on increasing its revenue and is offering doctors a variety of incentives. "The Australian" newspaper reports unhappiness, lawsuits and disgruntled doctors in Queensland as Foundation cuts costs, and as a consequence support to their medical centres.

Foundation purchased the practices with shares which are now a fraction of their original value. Accusations and a legal dispute surround their purchase of Medihelp in Queensland. This can't be helping.

June 2002 Foundation and LifeCare merge under the name of LifeCare.

November 2002 Company renamed Independent Practitioners Network (IPN)

December 2002 IPN entered into an arrangement with Sonic Healthcare giving it pathology rights in its centres. Sonic gives support by increasing to 18.5% in IPN.

IPN's story now became so closely intertwined with Sonic that this chronology is continued on the Sonic chronology page. Its relationship with Sonic is described in the Sonic Healthcare page. Aspects of IPN's business and profitability are addressed on the main Foundation page

Foundation References
(including Formulab)


Formulab to press forward from Giltnet reverse
The West Australian September 19, 1995
Formulab's first half profit outstrips full year tip
The West Australian January 24, 1996
Formulab surge
COURIER-MAIL February 29, 1996
Market favourite Formulab still bubbling
The Australian Financial Review November 19, 1996
Radical computer thinks it's faster,
The West Australian December 5, 1996
A Richter scale fails to register,
The West Australian December 5, 1996
Richter riches fall $200m.
The West Australian December 6, 1996
Formulab shares plunge 13%
The West Australian December 7, 1996
Nasdaq reforms favour small punters
The West Australian January 14, 1997
Nervous US buyers stall Formulab listing
The Australian Financial Review April 7, 1997
Formulab buys Cavlec
The West Australian June 19, 1997
Formulab may get US listing
COURIER-MAIL August 14, 1997,
The West Australian March 17, 1998
The West Australian November 25, 1998
Formulab calls a halt
The West Australian March 17, 1999
Administrator for Formulab Neuronetics
The West Australian April 13, 1999
The West Australian April 21, 1999
The West Australian April 28, 1999
The West Australian October 5, 1999
Investors agree to buy out Formulab Neuronetics
The West Australian November 3, 1999
Boyd Puts His Faith In Reborn Formulab
Australian Financial Review January 7, 2000
Formulab's $33m Boost For Boyd
Australian Financial Review January 14, 2000
The West Australian January 15, 2000
West Australian January 22, 2000
The West Australian January 25, 2000
Business Acqns./Change of Activs.& Name/Issue of Prospectus
Australian Stock Exchange Limited 2000-02-04
BRIEFS: Formulab switches fields
Australian Financial Review February 7, 2000
Australian Stock Exchange Limited 2000-02-11
The West Australian February 18, 2000
The West Australian February 19, 2000
The West Australian March 13, 2000
Formulab To Raise $14.5m
Australian Financial Review April 10, 2000
Foundation reveals its plan for GPs
The West Australian April 12, 2000
Bubble Trouble Cools High-tech Float Fever
Australian Financial Review April 5, 2000
Looking Sweet For CSR Profit
Australian Financial Review April 19, 2000
Group returns to bourse health
The West Australian May 5, 2000
Entrepreneurial Undertaker Turns Poacher
Australian Financial Review May 29, 2000
Big GP group buys in Victoria
The West Australian July 1, 2000
Foundation to expand in NSW
The West Australian July 4, 2000
Foundation Buys Sydney Medical Centre Operator
Australian Financial Review July 4, 2000
SHL`s ann: Takes Equity Stake in FNC & Strategic Alliance SONIC HEALTHCARE LIMITED
Australian Stock Exchange Limited 2000-07-10
$50.7m Capital Raising incl.Strategic Alliance with SHL FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2000-07-10
Sonic puts up $22m for 10pc of Foundation
The West Australian July 11, 2000
Corporate Medicine: Coming To The Local GP
Australian Financial Review July 11, 2000
Acquisition of Continuous Care Medical Centres Queensland FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2000-07-13
Foundation HealthCare snaps up Qld group
Courier Mail July 14, 2000
Dangerous PRACTICE
Courier Mail 22 July 2000
Corporate giant's shopping plans fuel health-care fears
Sydney Morning Herald late Aug/Sept 2000
Health groups reach more
The West Australian August 4, 2000
App 3B-Acq.Continuous Care Medical Centre P/L&Director Appts FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2000-08-09
GPs Inc - Profits Or Patients
Sydney Morning Herald 10 Aug 2000
Sonic's stake in Foundation 'protective'
The West Australian August 23, 2000
Strategic Alliance with LifeCare Health Ltd FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2000-08-25
Boyd builds on LifeCare foundation
The West Australian August 26, 2000
Sonic To Raise Radiology Funds
Australian Financial Review August 29, 2000
Pharmacies keep corner store rules
The West Australian September 2, 2000
Briefs: Foundation Healthcare expands
Australian Financial Review September 13, 2000
Endeavour gets Packer-led lift
The West Australian September 16, 2000
Perth company adds SA centres
The West Australian September 27, 2000
Corporate Medicine:
Business Review Weekly 29 Sept. 2000
Australian Stock Exchange Limited 2000-11-13
Foundation's Pace Of Growth A Tonic For Investors
Australian Financial Review November 28, 2000
Acquisition Cost of Medihelp Group FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2000-12-06
Profit surge for Foundation
The West Australian December 21, 2000
Brokers add health for wealth
The West Australian January 3, 2001
Quadrant invests $34m in reborn Iridium satellites
Courier Mail January 17, 2001
Foundation Out To Raise $50m
Australian Financial Review February 1, 2001
Foundation seeks $50m for growth
The West Australian February 6, 2001
SIG signs strategic alliance with FNC SIGMA COMPANY LIMITED.
Australian Stock Exchange Limited 2001-02-09
Strategic Alliance with Sigma Chemicals FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2001-02-12
Foundation builds pharmacy link
The West Australian February 12, 2001
A boom for Sonic?
Australian Financial Review February 13, 2001
The West Australian February 14, 2001
Mercantile Mutual On The Move
Australian Financial Review February 16, 2001
Becoming a substantial holder for LCH LIFECARE HEALTH LIMITED
Australian Stock Exchange Limited 2001-02-23
GP body tackles health players
The West Australian March 12, 2001
FNC to form Ophthalmology Division FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2001-03-20
Foundation lures GPs
The Australian May 4, 2001
SHL`s ann: Acqn of medical diagnostic practices from FNC SONIC HEALTHCARE LIMITED
Australian Stock Exchange Limited 2001-06-01
Sonic pays $32m for pathology assets
The West Australian June 2, 2001
Healthcare group moves into St Paul's Terrace
Courier Mail June 15, 2001
Script for a profit;
The Weekend Australian June 23, 2001
Change in substantial holding from SHL FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2001-06-26
LCH ann Commencement of Physiotherapy & Dental Services LIFECARE HEALTH LIMITED
Australian Stock Exchange Limited 2001-07-06
Roadshow: As Big As It Gets
Australian Financial Review July 19, 2001
Australian Stock Exchange Limited 2001-07-23
Boyd promises a firm Foundation
The West Australian July 24, 2001
Foundation Seeks To Allay Concern
Australian Financial Review July 24, 2001
Appointment of Managing Director FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2001-07-31
Foundation's Plan Crumbling
Australian Financial Review August 3, 2001
Clarification - Article in Australian Financial Review FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2001-08-03
Health group feels a chill
The West Australian August 18, 2001
Small-cap suffering :
Australian Financial Review August 20, 2001
Send for the doctor
The Australian August 21, 2001
Diagnostics Providers Continue To Expand
Shares Magazine 1 September 2001
Day trader: Doctors, heal thyselves
The Australian September 7, 2001, Friday
Market rumblings
Australian Financial Review September 7, 2001
Sonic's boom surprises
The Australian September 11, 2001
Foundation sees loss top $28m
The West Australian September 11, 2001
Doctors' group faces surgery:
The Age September 11, 2001
Foundation shaken by loss.
The Australian12 Sept.2001
Foundation rocked after poor full year.
The West Australian 12 September 2001
Day trader: Punishing times
The Australian September 12, 2001
Foundation shakes:
Australian Financial Review September 12, 2001
LifeCare hits all-time low after result
The West Australian September 14, 2001
DeAM Cuts Losses On Disappointing Punts
Australian Financial Review September 14, 2001
DeAM Continues Foundation Selldown
Australian Financial Review September 21, 2001
Foundation takes a turn for the better
The West Australian September 22, 2001
A more solid Foundation:
Australian Financial Review September 22, 2001
Hopes fade for embattled biotechs
The Australian September 24, 2001
Healthier loss for Foundation:
The West Australian October 23, 2001
Foundation stems flow of red ink:
The West Australian November 19, 2001
Cure On Way, Vows Shreeve:
Australian Financial Review November 29, 2001
Foundation finds rare good month:
The West Australian December 18, 2001
Foundation unveils loss:
The West Australian January 22, 2002
Australian Stock Exchange Limited 2002-03-14
Does not compute
The Australian March 19, 2002
Pain for doctors
The Australian March 19, 2002
March Results - Mgmt Accts P&L for continuing operations FOUNDATION HEALTHCARE LIMITED
Australian Stock Exchange Limited 2002-04-17

See Sonic Chronology Page for more


Web Page History
This page created June 2002 by
Michael Wynne
Updated and reformatted January 2006