Brian Martin, past president of the Australian Whistle Blowers Association has asked me to tell the story of my efforts to blow the whistle on the corporatisation of health care. This page and the two linked to it try to bring together a complicated story with many facets. Those interested in Whistle bowling strategies may be interested.
This page briefly tells the story of my personal involvement and conflict with corporate for profit medicine. It explains the background to my pages on this web site and the reasons for developing it.
I had relevant previous experience so was quite well equipped to take on corporate medicine. I had previously challenged government and won. This was not my first encounter with commercial pressure in health care. I was sufficiently stubborn - or even stupid - to take up the challenge when I was confronted by corporate might. I doubt that I would have done so had I known what it would involve.
I came from a medical family and obtained my medical degree from the University of Cape Town, qualifying in 1956. I completed my residency in Cape Town. Even at that time there was much argument about the commercial aspects of health care.
I spent 8 years in the United Kingdom training in surgery in the National Health Service. Three years were spent in London Teaching Hospitals. I did not train in the USA but met and spoke to UK doctors who had done some of their training in US hospitals.
I returned to an appointment at Groote Schuur Hospital in Cape Town for 2 years. This was followed by 5 years in private practice but with appointments at public hospitals.
In 1972 I accepted a full time post with my own department at the local hospital serving the black community. Here I was more directly involved in the conflicts surrounding apartheid and in challenging government.
My son's were due to be registered for conscription to the South African army. I was anxious to avoid this. Following riots in 1976 I emigrated to Australia taking a post at the University of Queensland in 1977. I retired from the university in 1998.
While in South Africa I had some experience with ideology and saw the impact of economic pressures on the practice of medicine. I was involved in conflict with colleagues and with government. I practiced in many different environments. I had a long experience with medicine practiced under "contract" and was strongly opposed to this.
I believe that this background helped me when I decided to take on both multinationals and governments to address what I saw as a major health care problem.
CLICK HERE -- to link to more information about this
My conflict with corporate medicine started in December 1988 when my eldest son was admitted and died at a hospital owned by National Medical Enterprises (NME) in Singapore. His initial care by doctors holding a contract with the Singapore airport to provide care to visitors was typical of "contract medicine". For the first time I had real hard evidence with which to prosecute the problems I had encountered years before. I complained to the hospital and expected the hospital and the local doctors to prosecute the matter. When this did not happen I lodged a complaint with the Singapore Medical Council myself.
When I met a brick wall I picked up the phone and started talking to people. What I concluded from my discussions was very disturbing. I did not have any evidence to support the conclusions I reached and there was no direct action I could take. I came to suspect conduct very similar to that exposed in the USA 2 years later. Here they resulted in criminal convictions and multimillion dollar fraud payments.
I was challenged and set about forcing the issue. The resulting conflict took me through 6 court actions. The information which I gathered was instrumental in forcing NME out of Australia and possibly out of Singapore and the United Kingdom as well.
I was able to enlist the support of the Australian Medical Association, international airlines and the Australian Federal government to put pressure on Singapore. This was successful. Two doctors were eventually suspended from practice by the Singapore Medical Council but concerns about the operation of the hospital were not addressed.
This support evaporated when NME entered Australia in December 1991 to take control of Markalinga a company in financial trouble. I was forced to go it alone. I learned of NME's practices in the USA in October 1992. I went to the USA in 1993 and gathered information about their unconscionable practices. This included evidence which led to a criminal conviction in the USA in 1994 and to over $1 billion in fraud settlements. I eventually obtained sufficient information about NME to force the government into action. NME, now renamed Tenet Healthcare left Australia at the end of 1995.
These web pages were initially created in 1996 in response to defamation actions taken in an attempt to silence me. Some of the original pages remain, some have been removed and others modified.
Because of the vast amount of information available Tenet/NME still provides one of the richest insights into corporate thinking and corporate practices. I have broadened the scope of the site and added more information as other disturbing corporations have attempted to enter Australia.
The story of my involvement in helping to force Tenet/NME out of Australia is long and complicated. Some of it I am unable to tell. Some aspects of the story appear in the pages of this www site. I have written a review of my actions and what took place for those who are interested.
CLICK HERE -- to link to the story of my battle with Tenet/NME
CLICK HERE -- to explore the Tenet/NME pages
When Tenet vindictively commenced a second defamation action against me in Singapore after leaving Australia Senator Herron made a statement in the Australian parliament describing my efforts and Tenet's response.
At the same time I responded by lodging complaints and documents with the ethics committee, which Tenet boasted about in the USA. When these were not acknowledged I made a summary of the issues and the material, sent it as an additional complaint and put a copy on this web site. It describes aspects of Tenet/NME's conduct in Australia and Singapore in more detail. I also used this material to attack their credibility in the USA.
CLICK HERE -- to examine a statement made in the Australian Senate
CLICK HERE -- to examine the submission to Tenet's ethics committee
Generale de Sante Internationale (GSI)
GSI, based in France was the largest health care company in Europe. It bid to buy Tenet/NME's holding in Australia in 1995. Groups in Western Australia with whom I was in contact made inquiries. These revealed a number of disturbing business practices, particularly in the United Kingdom. I was able to locate and speak to someone close to the scandal to confirm some of the information. There was adverse press publicity and pressure was applied to Australian shareholders. GSI stopped bidding.
-- to learn more about GSI's and its
Mayne Nickless an Australian trucking company bid for and purchased Tenet/NME's Australian holdings and incorporated them into its wholly owned and controlled subsidiary Health Care of Australia (HCoA). At the time this was the lesser of two evils. While HCoA itself has done nothing illegal, Mayne Nickless had a criminal conviction. It soon switched the main thrust of its activities to health care. Its disturbing business practices became a matter of concern and there was adverse media coverage. In spite of this it enjoyed strong political support. I have closely followed Mayne Nickless progress and ensured that governments and licensing authorities were fully aware of the concern about its practices and the consequences of similar practices in the USA. Despite strong government support Mayne Nickless has alienated the medical profession and was accused by them of compromising care. Its profits plunged when doctors took their patients to other hospitals and it sold the hospital to Citigroup venture capitalists.
CLICK HERE -- to learn more about Mayne Nickless
CLICK HERE -- for a description of my efforts to contain Mayne Nickless practices
The US company Columbia/HCA was the largest and most successful health care corporation in the world. During my trip to the USA in 1993 I heard much about the disturbing conduct of this powerful group. In February 1997 Columbia announced a $1 billion plan to expand into Australia. It had arranged to buy into a community hospital in South Australia. It received strong political support. The medical profession was in possession of a disturbing report published in the New England Journal of Medicine and a group of doctors from South Australia went to the USA to investigate. They eventually reported back and Columbia/HCA's bid for the hospital in South Australia was rejected.
I still had many contacts in the USA and made inquiries. I was very quickly in possession of vast amounts of material suggesting unethical and even criminal practices. Columbia/HCA's aggressive business practices had made many enemies and there was a rising tide of revulsion and anger in the USA.
I lodged an objection with the Foreign Investment and Review Board (FIRB). FIRB was required to approve Columbia/HCA's entry to Australia. I then flooded FIRB, politicians, and the various state and federal agencies with waves of documents. I like to think that this forced them to delay approval and investigate. In late March 1997 the FBI swept through Columbia/HCA hospitals in the first of a series of fraud related raids. Columbia/HCA now had little chance of being accepted in Australia and it abandoned its plans.
Columbia/HCA became the subject of a massive fraud investigation. It finally paid US $1.7 billion in criminal and civil settlements. As the proceedings have unfolded the similarity of its thinking and its conduct to that of Tenet/NME has become apparent. I used the revelations about Columbia/HCA to press the issue of corporate health care in Australia. Some of this material is on this site.
CLICK HERE -- to learn more about Columbia/HCA and the submissions made
The medical profession in Australia have been well informed about the adverse impact of managed care in the USA. Managed care operates through contracts with doctors. Corporate groups use these to control the care doctors give to patients. This enables them to keep costs down and so generate greater profits for shareholders. Government plans to force doctors into contracts in Australia have been solidly resisted by the medical profession.
Managed care is simply a particularly unpleasant form of corporate medicine. Because of my contacts in the USA I have received a large amount of information about managed care. I have kept the medical profession and government supplied with this material and have written some analyses.
I am concerned that the excessive emphasis on managed care and the use of the term to rally opposition distracts attention away from the central and more important problem of corporate medicine of which managed care is only a part.
The central problem is the provision and control of care by large publicly listed companies whose only interest and only responsibility is to generate profits for their shareholders.
I have therefore continued to press the wider issue while addressing managed care, insisting that it is only a part of the problem. I supplied medical bodies and politicians with material describing managed care in the USA.
CLICK HERE to learn about managed care
The pharmaceutical and related companies have been a persistent problem and a thorn in the siede of those looking for an ethical system. Concerns relate to their use of patents in order to maintain their profits in poor countries subject to AIDS and ither devastatingillnessess, their role in promoting health care laws and practices which favour their profits rather than the health of the community, and their use of trade agreements to undermine Australia's drug regulatory system. I have not addressed these and other issues which have received wide publicity. I have included only a page describing their lest publicised frauds, mostly in the USA.
CLICK HERE to go to the pharmacology frauds.
Sun Healthcare was one of a group of rapidly expanding aged care corporations in the USA which enjoyed enormous financial success during the 1990's. It was primarily a nursing home operator but also provided "step down care" to acute patients in its nursing homes.
In 1995 I had been in contact with a group in the UK about Tenet/NME. They were even more concerned about Sun Healthcare which was entering the UK. They supplied me with information.
When Sun announced its plans to buy into Alpha Healthcare in Australia in 1997 I was in a position to lodge objections with FIRB and force them to investigate. I was also able to get court documents and other material from the USA.
The manner in which Sun Healthcare was brought into Australia over the objections of New South Wales the state where it would operate is another long story addressed in the pages on this www site. I continued to collect information and make it available to responsible people.
Within a year of Sun's entry into Australia there were revelations of appalling neglect and even abuse of the frail elderly in corporate nursing homes across the USA. Sun was one of the main chains involved. It became apparent that these corporate chains had built massive profit streams by drastically cutting staff and so compromising care. At the same time they worked and defrauded the Medicare and Medicaid systems.
In 1997 the US government changed the Medicare system to stop its misuse. In response to a public outcry about the neglect of the elderly, governments increased nursing home oversight and fined homes for failures in care. Patients have now taken to the courts as never before and judges have responded to the neglect of the frail and helpless by awarding massive damages.
The large nursing home chains in the USA have been unable to withstand these pressures. They have been unable to service their loans. Many of the largest including Sun Healthcare entered chapter 11 bankruptcy. Sun has traded out of bankruptcy under new management.
I have repeatedly lodged objections with government bodies and supplied politicians and other parties with information. Sun suffered a setback when they failed a probity check in Victoria. I like to think that my efforts prevented them from entering Australia's aged care nursing home market. They did not do well in Australia.
Sun eventually entered bankruptcy in Australia. All of its Australian holdings were sold.
CLICK HERE -- for more information about attempts to restrict Sun and get it out of Australia
Aged Care chains
While addressing the issue of Sun healthcare I was sent vast amounts of information about aged care chains in the USA. I wrote an assessment of the way this market operated and also reviews of several of the less palatable aged care chains and put them on this page.
CLICK HERE -- to go to the aged care pages
Tenet Healthcare's second coming
In 2002 Tenet was involved in a second massive scandal with allegations of price gouging, devious billing practices to exploit the Medicare system, past Medicare fraud, and that doctors in its hospitals have performed unnecessary heart surgery on normal patients simply to increase profits. I have written pages on this and am using them to point out to politicians and others how wise Australia was in 1994 and point to a lack of wisdom since then.
Tenet paid $400 million to settle with patients needlessly operated on. It also settled a number of actions related to quality of care in other hospitals. IN 2006 it reached a fraud settlement with US authorities of nearly $1 billion. The Tenet pages have not yet been updated about this.
CLICK HERE -- for the Tenet Healthcare pages
The US rehabilitation giant HealthSouth bought a hospital in Victoria in 1998. At that time there was no adverse information about it. In 2003 a massive scandal erupted which revealed that its entire empire was built on fraud. Twelve senior staff have already pleaded guilty. It is also accused of Medicare fraud. Information has been provided to state authorities in Victoria and they have been asked to address the issue. A set of web pages describes what happened.
The company admitted to a US $4 billion fraud over the years. Seventeen senior staff pleaded guilty and all indicated that Scrushy was the driving force behind the fraud. Scrushy was tried by jury in his home town where he was a hero. In a surprise and controversial decision he was acquitted on all charges. In an unrelated action he has since been convictd with of political bribery. In 2006 HealthSouth sold its hospital in Melbourne.
CLICK HERE -- to go to the HealthSouth pages
Purchase of Mayne Hospitals by Citigroup
In 2003 CVC Asia Pacific, Citigroup's Asian venture capital arm led a coalition of venture capitalists buying Mayne's hospital with plans to rapidly turn them around and then float them on the marketplace. Citigroup comprises the worlds largest conglomerate of bankers and financiers. I have described the consequences of this purchase and also analysed the unsavoury behaviour of Citigroup in order to show the adverse influence which these financiers have on health care corporations. I attempted to make this information and the possible consequences available to the public and to health professionals. Objections were lodged.
NSW mounted an 18 month probity review then granted licenses subject to conditions and compliance procedures. Affinity Health surprised analysts by selling its hospitals to Ramsay Health sooner than they had indicated.
CLICK HERE to go to the Citigroup pages
Aged Care and the entry of giant US multinationals into the sector
I had not intended to get deeply involved in aged care in Australia but after the rape and sexual abuse scandal I took out material to see what had been happening. I found the situation alarming and have written a sizeable new section on aged care .
In late 2006 the same Citigroup associated companies that had led the purchase on Mayne hospitals mounted a takeover of DCA, Australias largest market listed group and DCA has advised acceptance. At the same time a giant US Home Care company was welcomed into Australia. I have lodged objections to both on the basis of Citigroups lack of probity and the NSW Health action, and on the basis that the introduction of a competitive market led by a giant profit driven company from the dysfunctional US system into home care was not in the public interest. It will be interesting to see how they justify the entry of these companies given the far greater vulnerability of the aged care sector. Comment and links are on the main Australian page.
Addressing fundamental problems
Clearly there is something very seriously wrong when the majority of the most successful providers of health and aged care are found to have built their empires by fraud, and by misusing the sick, the frail and the mentally disturbed to generate profit.
There is now a vast amount of information available for analysis. It can be shown that what is happening is due to the misapplication of economic and marketplace thinking to an area where the necessary conditions for a successful market do not exist.
Economic thinking has become an ideology rather than a scientific discipline. Instead of using evidence to advance understanding converts to the ideology disregard or discredit it when it conflicts with deeply held beliefs. In this it is no different to the other disturbing ideologies of this century.
Over the years I have written analyses and flooded politicians with unwelcome and challenging documents to confront marketplace thinking. I have made a nuisance of myself. That there would be adverse outcomes to current policy was repeatedly pointed out. That events like the scan scandal, the recent exposure of severe problems in nursing homes, the failure of GP corporatisation, the failure of Peter Smedley's plans for Mayne would occur was predicted. They were the inevitable and logical consequences of government policy.
CLICK HERE -- to go to the pages analysing corporate practices.
Graeme Samuel' Speech to the World Bank
In February 2000 Graeme Samuel, chairman of Australia's National Competition Council gave a speech to the world bank setting out a theoretical marketplace model for health care. He claimed there was a developing crisis and urged its early adoption by developing nations. It sets out clearly and in one place many of the arguments used by the advocates of corporate medicine and can be seen to closely reflect our own government's unsuccessful policies.
I have written a criticism of Samuel's speech in order to bring the arguments against such a system together. This criticism is included on the www site.
CLICK HERE -- to link to the criticism of Samuel's speech
This page created April 2000 by Michael
Modified August 2003, January 2004, September 2006