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section Letter to Foreign
Investment Review Board 30 May 2006
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The giant home care corporation was welcomed into Australia by our politicians. I lodged an objection with the Foreign Investment and Review Board. I sent copies to politicians.
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Path to this
Letter to Foreign Investment Review Board
30 May 2006
Re: Home Instead Senior Care
I am writing to urge extreme caution in the
evaluation of this US home care giant in its application to enter our
country. There are now extensive electronic press, business and legal
databases which the FIRB has the resources and power to access and
use. Although I have not had all these resources, I have done your
work for you in the past. This should no longer be necessary.
I have not studied home care but am aware that the same sort of thing occurred there. It was the subject of US federal investigations in 1994 and again in 1997 when an effort was made to control it. This put pressure on the profits of many of the companys who simply dropped the area. Some companies like Home Instead may have elected to address this sort of problem by diversifying internationally. Australian companies have also been wary of the profitability of home care and it has been left to charitable institutions and government.
The Arrival of Home Instead in Australia
Once again we have the spectacle of a large US group espousing their credibility and their solutions to government at a time when politicians are acutely embarrassed by the failure of their nursing home policies and in particular of the accreditation process which they so strongly asserted would contain any problems. At least one nurse with whom I have corresponded has compared some of the business focused nursing homes with battery farming. Politicians are once again in pain and at risk from con men selling snake oil.
Government are still unable to accept that it is the marketplace competitive policy which is the basis for the problems in the USA and now in Australia and that accreditation in both countries failed for the same reasons. It is no coincidence that while the majority of nursing homes in Australia are owned by not for profit groups a disproportional number of those sanctioned have owners names which indicate that they are commercial enterprises.
Instead of confronting the problem our policy makers have turned again to the market. Home Instead is being welcomed by the Prime Minister himself as well as by other sections of the government.
The RISK of Home Instead
There is no argument that services which keep us out of nursing homes is something we all want. That is where we would like to be as we grow old. The difficulty is the incompatibility of an aggressive commercialism with the services which this company claims to provide. These services are by their very nature inefficient and person intensive and the imposition of commercial efficiencies and thinking is simply not compatible.
I have examined some of the publicly available material about Home Instead and there are vast amounts of advertorial material and glowing accounts of its generosity and its involvement with the community in organizing and funding charitable aged care activities. Most of this press coverage has undoubtedly been generated by the company itself and its PR firm. I am reminded of the glowing reports which praised Tenet/NME in the 1980s. It used public education and charitable do good activities to increase credibility and as a major source of referrals.
Home Instead is not market listed and is consequently not closely scrutinized. There are no objective reports on its activities although it sponsors research projects which are likely to illustrate the need for its services. In one sense this is a plus in that a few of these privately owned for profit health care groups do sometimes perform well as they have more latitude to do so.
While it is difficult to fault its practices and policies, or its enthusiasm as revealed in these reports, it could never have attained its position as the leader in its sector had it not employed the ruthless commercialism that is so essential for success in this US marketplace. That is not compatible with the service it claims to provide. A more realistic and more likely scenario is revealed by the following account which comes from California.
Home Instead Senior Care 565 Union St. NE Suite 208, Salem, OR
Julie of Pittsburg CA writes (3/22/02):
My 96-year-old grandmother contacted the Home Instead agency to get information on their services. She contacted the agency for information only because she was concerned that she may need some help in her home if she became ill.
The Agency immediately sent a representative to her home who pressured her into signing a contract for services she did not need. Also, the representative told my grandmother that her insurance policy would pay for the agency's services, knowing that they are not a licensed agency and most insurance companies will not pay for services from unlicensed agencies.
After Home Instead tried unsuccessfully to bill my grandmothers insurance company they started calling her and requesting payment. When they called they would threaten to attach a lien to her house if she did not pay her bill and also threatened to attach service charges.
Finally, my grandmother paid for the services herself. However, she overpaid the agency. I have called Home Instead twice and requested that they mail my grandmother a check for the overpayment, they have told me that they "are sending the check today", however my grandmother has yet to receive it.
My grandmother paid over $800 for services she did not need. Home Instead owes my grandmother $397 and they have not paid her.
There are many services that help older adults remain independent. To find one in your area, check the <http://www.eldercare.gov/>Eldercare.gov or <http://www.consumeraffairs.com/age/www.caregivers-usa.org>CareGivers-USA.org.
Home Instead is a private company and so not under quite as much pressure to continuously place commercial interests and profitability first. I know of no other unlisted for profit health care company that has come to dominate its sector in the USA and wonder how this was achieved.
I am worried by Home Insteads use of the franchise model. This places considerable pressure on franchisees who as I understand the system must work to pay off their franchise each year before making any profit themselves. Franchising puts additional pressure on care and encourages over-servicing. Financial success is a potent opiate for the franchisers conscience in regard to the things done by franchisees in its name - and when it is in trouble the pressures operate in the same way. The example above is representative.
Some of the more poorly performing nursing home companies in terms of care and humanity (e.g. Beverly Enterprises, the largest in the USA) have embraced the franchise model. In Australia Peter Smedley favoured this model when he took over Mayne Health. He almost bankrupted the company by alienating health care providers with his solutions. LifeCare introduced this model into physiotherapy during the 1990s but was largely rejected by professional people and did not prosper.
Home Instead indicates on its web site that potential franchisees should be "competitive". Financial competitiveness is not an attribute which sits comfortably with caring for little old ladies who are confused and easily persuaded. The temptations are too great.
Health Insteads web page indicates that it gives its carers training but it gives no indication of its duration and nature. The salaries are very low by Australian standards and one wonders if it will attract the sort of people who will be motivated. Australian nursing home residents, like those in the USA are now already suffering because the salaries attract only the dregs of society and include criminals and rapists. Truly motivated people are unable to tolerate the commercial ambience (people farming) and leave.
The web sites indicates that its franchisees require no experience and receive only a weeks training with follow up support. One wonders if this is primarily business and marketing training and how well qualified they are to train, monitor and support the people who provide care.
Another concern is the establishment of services like this as a commercial enterprise. Competitors soon move in, and in so vulnerable an area, the most unscrupulous succeed. Faced with failure most, still ethical companies look the other way, and soon follow suit in order to survive. Humanitarian ethics and the primacy of care do not survive aggressive commercial competition. You cannot legislate for them. This is the glaring message from the US system, a system which is being replicated in Australian nursing homes.
Home Instead appears to be a friendly, socially responsible humanitarian organisation with a very kindly and helpful face. Its founder is very probably charismatic, persuasive and convinced in what he is doing and he may genuinely mean what he says. The founders of Tenet Healthcare and Sun Healthcare were for example similarly convinced themselves, convincing to others, and dedicated to their mission. I have argued that this is part of a personality type which becomes successful in this sort of marketplace. They accept financial success as justification and confirmation of all their assertions and beliefs, become supremely self confident, and are blind to all else.
It is difficult to conceive that Home Insteads success in the USA was not accompanied by a ruthless commercialism. This commercialism is not compatible with the provision of the sort of service it promises in its promotions. While Home Instead might just be the exception to the rule this would be unusual. We should not forget our experience with HealthSouth.
I urge you to exert extreme caution and to
investigate this and any other global health care conglomerate,
especially those from the USA very thoroughly. Its training programs,
salary scale and oversight mechanisms also need close scrutiny.
I attach to this a few articles including one from the Sydney Morning Herald which expresses concern about what is happening to our society as a consequence of the commercial pressures of modern life and as reflected by the privatisation of every facet of our personal and private lives. This is exemplified by Home Instead. Another extract raises a very pertinent point about over-servicing which the clipping above shows will be very difficult to control in this sector. Given the dominance of pensioners, mostly widows, needing these services, as referred to by another critic, we must ask if they expect government to contribute to this.
The link below also looks at Home
Insteads offerings. http://www.agedcarecrisis.com/acc/show_column.asp?id=newsitem&item=news0014
The fear of ageing Westside News June 1, 2005
Take care in heat Albert Logan News January 4, 2006
Heat kills elderly Logan West Leader January 18, 2006
Giant US care franchise will visit Gran for $60 The Sydney Morning Herald May 4, 2006
Private sector ventures slowly into home care for an ageing society The Age May 5, 2006
A high price for the personal touch The Sydney Morning Herald May 6, 2006
Brisbane first port of call for aged care giant http://www.qbr.com.au/index.cfm?storyid=27170&cp=displaystory May 26, 2006
I sent copies to a number of politicians expressing my concerns.
My local member responded (pdf file)
I wrote to him challenging his justifications
I also lodged an objection with the responsible aged care authority
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This page created Sept 2006 by Michael Wynne