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. Any comments made are based on the belief that there is some substance at least to so many allegations.

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Corporate Practices

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Path to this page

Markets & aging
Nursing homes

Health care

Hospital Corporatisation
Entry to Privatisation
Privatisation Background
Australian states
Pathology & Radiology
Gen. Pract. Corporatisation

Aged Care
Story of corporatisation
 Nonprofit dilemma
Aging bonanza
Nursing homes
Home Care
Breadth health corporat.
Retirement Villages

Nursing Homes
1985 to 1998
1998 to 2001
2002 to 2005
People farming
Residents & Relatives
The Companies
Not for profit homes

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
It is the Australian government which has turned aged care from a caring professional activity into a profit focussed and competition driven market in which the culture of care in nursing homes is replaced by one of apathy and disinterest. The story of aged care in Australia is best examined by following government policy and practice over the years. This web page gives an overview of what has happened. It links to web pages which explore successive periods and the behaviour of the aged care ministers responsible.

 Australian section   

Government and Nursing Homes





Government have been crucial to the corporatisation of aged care in Australia and the story of the marketising of aged care in Australia is best told by studying the role of government.

In the USA it has been the businessmen and the financiers who have driven the marketisation of welfare services and of aged care. Government has followed giving them support, credibility and influence to the extent that they now largely dictate government policy.

In Australia it has been government and their economic advisers who have driven the process. The market has followed taking up the opportunities some more enthusiastically than others. They too have gained power and influence. This difference is probably because of the country’s socialist background.

Health and aged care were already largely publicly funded and the electorate supported this. They were unwilling to accept a user pays system. Companies depended on government funding which might change at the next election so were wary.

The aged care industry probably had a greater influence on government policy than in other Australian welfare sectors. This was because of the influence of the millionaire nursing home magnate Doug Moran. He claimed to have had a major input into the policy of the coalition government elected in 1996.

The public backlash to new government policies in 1997 was a setback which frightened the market. Only one market listed company of any size seriously entered the nursing home sector. Instead the banks have become the main corporatisers and consolidators. They have hedged their bets by forming trusts to own nursing homes and then leased them to private companies to run. They carry the risks. A number of private companies owned by individuals have entered the sector over the years increasing much more rapidly during the 1990s.

The coalition (National and Liberal parties) party gained power in 1996, more because of a backlash against labour's arrogant Paul Keating than because of their policies. They have retained power by fighting elections on other issues, by keeping the economy booming, and because of the labour oppositions poor performance and lack of leadership credentials. The new 1996 government had to manage the community’s dislike of what they were doing in the welfare sector. Their agenda was restrained by this.

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1985 to 1998 From socialist Labour to free market Coalition
Doug Moran - Judi Moylan - Warwick Smith

Before 1996 there was a federal labour government and state coalition governments. Nursing homes were tightly regulated although under-funded. Required nurse numbers were specified and homes had to account for the way money was spent to ensure that it went to provide care. The market found this restrictive and not very profitable. For profit nursing home owners mounted a legal challenge but lost the case.

The coalition elected in 1996 were advised by nursing home millionaire Doug Moran. They planned to deregulate the sector and turn it into a competitive market. To save the government money and to increase profits they radically altered the funding system to make nursing home users pay for care and for refurbishment. Many would lose their homes and all their assets.

At the same time the government removed most of the regulations and allowed the market to determine staffing levels and the way money was spent. Government oversight was abolished in favour of company friendly accreditation. This was largely handed over to the industry to manage.

There was a violent backlash by the community against the increased payments. With falling support and a backbench revolt the government modified the user pays policies but did not abandon them. Judi Moylan, the minister responsible became the scapegoat blamed for the way it was presented to the public. She was replaced by Warwick Smith.

Click Here to explore this period in more depth.


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My penny's worth in 1999

My early concerns were with the ownership of Australian hospitals by US multinationals. I had avoided examining the nursing home sector until Sun Healthcare, a US giant entered the Australian hospital sector at the end of 1997. In the USA it was a provider of nursing home and step down (or post-acute) care. It had a dreadful track record and my objections to its operations led me to examine the aged care system in the USA and subsequently to write web pages about the US sector.

When I discovered in 1998 that Sun planned to enter aged care in Australia I collected material, lodged objections with federal agencies and corresponded with ministers and their departments. Sun's credibility was challenged by its own conduct and it soon slid into bankruptcy. It never applied to enter aged care in Australia.

The interest in this early 1999 correspondence comes not from what is said about Sun Healthcare but from rereading it 6-7 years later at a time when the failures in Australia are only too real. At the time the first of the series of scandals which were to rock the aged care sector were still nearly a year away.

The interest lies in my comments about the direction in which the government's policies were headed, the extravagant claims made by the departments in their letters to me, and my clearly unwelcome challenges to these assertions. Time has proved that my concerns were more than justified. I have put a selection of this material into a web page.

Click Here if you would like to read it

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1998 to 2001 Bronwyn Bishop and the Riverside scandal

Senator Bronwyn Bishop became a key figure in the liberal party when in opposition because of her aggression in attacking others. She had leadership ambitions and moved to the house of representatives. She was given the aged care portfolio. Her lack of understanding of the portfolio, her ineptitude and her tendency to blame others was soon apparent.

The deficiencies in the system were becoming more and more of a problem and the government were blind to this. They had no insight and maintained that the public exposure of many poor homes showed the system was being reformed. The Riverside scandal when it broke gave critics an opportunity to drive the real message home. It received a great deal of publicity. This scandal gives a wonderful insight into government thinking, failure in the system they had set up, political process, the influence of the media, and the rigidity and ineptitude of bureaucracy. The forces at work created a saga of ineptitude and misery for all of the parties involved.

For practical purposes this had no impact on government policy. Ideology remained ascendant. The tinkering which followed resulted in the minister taking control of the supposedly independent complaints and accreditation process. Given her instinct for self preservation and her propensity to interfere this was a disaster. The stage was set for further deterioration in the system and the further destruction of a caring culture.

The accreditation system was criticised, and there were a series of further scandals as failures in nursing homes became public. The most damaging of these occurred when Bishop appointed someone from her department to the accreditation agency. The agency overruled assessors advice that homes run by her friend and liberal donor Millie Phillips be sanctioned.

She became an embarrassment and was removed at the end of 2001.

Click Here for the story of the Bronwyn Bishop years.

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2002 to 2005 The Julie Bishop years

The Coalition government was now firmly entrenched. The lack of an effective opposition meant that there was less constructive criticism. The news was dominated by the war on terrorism, Afghanistan, Iraq and Israel. George Bush and Howard’s support of him created much controversy. The hurricane in Florida, the Tsunami in Asia. the death penalty and imprisonment of Australians in Asia all held the publics attention.

There was much less adverse publicity of the steadily deteriorating aged care system. The public’s mind was elsewhere.

There were ongoing problems in nursing homes in 2002, 2003, 2004 and 2005. But during these years the governments policy of consolidation and corporatisation became entrenched and accepted by default. There was a desperate shortage of aged care beds for the really frail and the government used this to drive consolidation.

A productivity report by economist Warren Hogan in 2004 reinforced the government’s agenda. It simply ignored the inverse relationship between economic productivity and efficiency on the one hand and care on the other by not addressing it. It seems likely that it was commissioned in order to defuse criticisms as little attention was given to the recommendations and Hogan later criticised the government's implementation of his advice.

A report by a senate committee in 2005 identified the deteriorating situation, the problem with staff and staff morale, as well as the failures in accreditation and in investigating complaints. It was mostly ignored until the rape scandal of 2006 forced government into action.

Click Here to see what was happening during these years.


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2006 The Rape and Sexual Abuse Scandal - Santo Santoro


By the time Santo Santoro became minister in 2006 the situation in nursing homes was at an all time low. Staff morale and the culture within the nursing homes is best described as resigned apathy. There was an unwillingness to raise issues or criticise in case you were bullied or fired. Advocate Lillian Jeter exposed this on television when she persuaded a few nurse aids to speak up and describe what was happening in their workplaces. Their integrity had been challenged by the presenter on the basis that the agency had investigated and found no evidence to confirm their claims.

Feb 2006 Response to a challenge to witnesses integrity

LILLIAN JETER: Sir, I have no doubt in my mind that what they say is absolutely true. I have no doubt in my mind that they care for all of the residents in that particular facility and that they were very disheartened - one of them to leave the facility or to even leave the shift - and leave them in the hands of those carers that couldn't care less about the residents
Allegations of abuse at aged care facility
Lateline ABC TV February 20, 2006

Severely aberrant practices like baiting elderly patients for amusement were reported but spokespersons for the nurses claimed that very few spoke out. These witnesses claimed that the baiting by carers stirred up the confused residents. You could then get them sedated and so not have to look after them.

Failures in care had become something to be hidden rather than used as a stimulus to improvement as envisaged in the grand accreditation vision. As in the USA the accreditation process had become a burdensome chore, a restriction on economic productivity and something to be circumvented.

When 90 year old patients at a nursing home in Victoria were repeatedly raped and other staff did nothing about it the matter exploded and the new minister faced a mammoth crisis. Critics aware of what was happening in the sector gained traction and leverage.

When prime minister Howard and aged minister Santoro tried to isolate this incident by claiming it was an isolated one in a well functioning system this opened Pandora’s box. A series of rapes, sexual abuse, and a variety of other elder abuses were reported across the country. Advocates challenged the naysayers at every step showing that this was symptomatic of a systemic problem across the entire sector and in government.

he press reported studies showing the frequency of sexual abuse in the elderly, the extent of other forms of elder abuse and the high incidence of markers of poor care such as weight loss across the sector.

The 2005 senate report had identified many of the problems and the government had done nothing. The government was on the back foot and now had no choice but to bow to the inevitable and act.

To his credit the inexperienced (in aged care) Santoro managed the situation astutely. He showed himself to be an experienced politician very different to his predecessors - which is not an endorsement of what he did! He arranged meetings, summits and consultations allowing himself to be persuaded and then leading the claimed process of change himself.

By mid 2006 Santoro had instituted many changes including police checks on all carers, annual spot checks by the accreditation agency, and most controversial of all for the market mandatory reporting of elder abuse. The details of all these are not yet available and I am concerned that many of these are watered down versions of the proposals made after discussion with the industry who agreed to support them.

Also promised is an overhaul of the complaints mechanism and accreditation but after being a strong advocate the minister has been silent. One wonders what he has traded in return for agreement to the mandatory reporting demanded by all the governments critics. Many years of watching politicians makes one cynical.

All of the measures were designed to firmly plug the holes in the leaking bucket. None of them seriously addressed the underlying problems and conflicts within the governments policies - the defects in the bucket. This in essence means that at best the more glaring deficiencies will be contained at least for a few years while the deep problems fester on only to break out again somewhere else in a few years time.

Far from learning from his experience the minister used the credibility gained from his success in placating the critics to support the markets position and promote government policies to the public -- increasing commercialisation, corporate consolidation, markets (but subliminally), competition and user pays.

Click Here to explore the 2006 scandal and the way it was handled.


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Young people in nursing homes

Nursing homes are the homes for the frail elderly. They are poorly suited to the smaller numbers of young people whose illness renders them unable to care for themselves. In spite of this most such young people end up in nursing homes. This is very depressing for them. There has been much criticism of this over the years but government has done very little about it. I have not attempted to explore the issue on these pages.

Mar 2002 The plight of the young in aged care facilities

Janine has multiple sclerosis (MS), - - - -. She has been here, among people on average more than twice her age, for three years. She ought not be. No one - not her parents and friends, nor her carers, nor even some of the other residents - believe an aged-care home is a suitable place for her.

Yet thousands of other "young'' Australians are in the same situation. They make up 4.5 per cent of all aged-care residents. According to the federal Minister for Ageing, Kevin Andrews, this week there were 6041 people aged under 65 in nursing homes across the country. More than 1100 of them are under 50 and 30 are under 25.
Blackwood says younger residents face other problems: social isolation, by having nothing in common with fellow residents; a loss of friends, as visitors are often deterred by the setting; a lack of appropriately trained staff and appropriate activities; and even distress, watching aged residents die.
The stalemate is causing increasing frustration among advocacy groups such as the MS Society, which failed to convince the Howard Government to act on the issue at the last election and is now investigating whether younger residents can take legal action against federal and state governments.
Old Before Their Time The Age March 5, 2002

For more information try the following links

Young People In Nursing Homes National Alliance

Act Now : Young people in nursing homes

Young People in Nursing Homes Factsheet

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The primary determinants of good care for the aged are the quantity, quality, dedication and motivation of staff. There has been a steady deterioration in the quantity and the quality of staff since marketplace mechanisms became the primary structures for providing aged care. This is in large measure because government and business management ceased to value the skills, dedication and commitment of staff. The community followed.

The motivation of genuinely caring people has been replaced by a drive for profit and an emphasis on process and appearance as major objectives. The accreditation process has resulted is an excessive emphasis on the form of care rather than its substance. Largely as a consequence of the market focus the morale of staff has been eroded and a culture of genuine caring has become one characterised by apathy and indifference.

The accreditation and complaints mechanisms have not worked. This is not surprising in light of the patterns of thought within which the system was designed and the powerful market forces that it had to confront.

What the 2006 reforms to address these problems do is to impose more onerous impositions on providers of care, on staff, on the accreditation agency, on the police, and on the residents and their families. With the possible exception of increased training there is very little in any of the measures that is directed towards an understanding of why the aged care system is deteriorating. The situation is so bad that that some carers rape or abuse those they are charged to care for, others looking on do nothing, and management turns a blind eye. Without motivation and commitment a plethera of courses will fall on barren soil.

There is nothing to address the culture of money before care and the under staffing. Instead the government is encouraging more money-first companies into the sector and talking up the marketplace mechanisms which are at the root of so much of the problem.   There is no sign that the government is prepared to even entertain the idea that the provision of aged care through market mechanisms is fatally flawed or that the possibilities of an integrated community service deserve exploration and trial. The new measures, which will push up the costs of care, may make the problems less visible and less confronting but I doubt they will do much to improve the broad sweep of care and give the elderly the sort of care they need and deserve.

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More information

For Updates:- A good way to check for recent developments in aged care is to go to the aged care crisis group's search page and enter the name of the company, nursing home or key words relating to any other matter in the search box. Most significant press reports are flagged there. The aged care crisis web site has recently been restructured and some of the older links used from this site may not work.

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Web Page History
This page created Sept 2006 by
Michael Wynne