LINKS CORPORATE MEDICINE WEB SITE Background 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. Every attempt is made to provide accurate and well written material. Your contributions, suggestions, additional information and advice sent to the web address at the foot of the page are welcome. Where possible they will be included in revised pages. The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Material contained here represents my views based on my study of the operation of the health care marketplace and the material available to me. It should not be assumed to represent the views of any other individual or organisation. Links to Site Maps Central Initial USA Australian International Corporate Practices (to print) Path to this page Home Australia Markets & aging Nursing homes The Companies overview or Pathology & Radiology Health care Hospital Corporatisation   Entry to Privatisation   Privatisation Background   Australian states Pathology & Radiology Gen. Pract. Corporatisation Aged Care Story of corporatisation   Nonprofit dilemma   BUPA Aging bonanza Banks Nursing homes Home Care Breadth health corporat. Retirement Villages Nursing Homes Government    1985 to 1998    Correspondence    1998 to 2001    2002 to 2005    2006 Accreditation Nurses    People farming Residents & Relatives The Companies Not for profit homes Nursing Hm Comp The Companies overview Listed Companies Milstern DCA    Audit problem   DCA Sale Ramsay Hlth Care Aevum Retirement Care Aus. Bigger unlisted Comp. BUPA    BUPA approval status Moran Hlth Care Tricare Regis Grp Unlisted Comp. Vic. A Illawaong Saitta/Neviskia CIS Holdings Unlisted Comp. Vic. B Eildon McKenzie SRS & Marnotta Enhance Peel Street Muskjest Lasalto & Easyplan etc Ellis & Elfam Dampier Bay Hastings Regional Navatha & Locksley Unlisted Comp. Other Aegis Sauve/Craigcare Kennedy Thompson Alchera Park Trans Dominion/Farad Gonzales Bresant Tolega & Karoona Peninsula 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 The British not for profit group BUPA has purchased Australia and New Zealand's largest for profit nursing home company. This web page tracks the efforts made to show that promises made by ministers had not been met and that BUPA did not have to front up and seek approved provider status. Any criminal or dangerously aggressive commercially focused entity can still buy  nursing homes without scrutiny. The page establishes that the new labor governments refuses to meet their predecessors undertakings.  It documents their reliance on regulatory vigour and oversight to control the consequences. These measures have already been unsuccessful. Suggestions are made as to how the community might do something about the problem.  Australian section    Will BUPA seek approved provider status (Well actually NO)

CONTENTS

• The Problem and Addressing it
  

• Background

• BUPA buys the nursing homes - its importance
  

• Objections to BUPA
  

• Going Public

• Asking the Labor Party
  

• Update June 2008
  

• The new minister and her staff

• Taking the issues to the new minister

• Squeezing information from the department and the minister

• No changes have been made to the regulations

• The labor party is not going to act
  

• Where to from Here

The Problem and Addressing it

Background

When DCA, Australia and New Zealand's largest owner of nursing homes was purchased by a Citigroup private equity consortium objections were lodged with the appropriate departmental authorities assessing approved provider status. Citigroup had previously been found wanting when it applied for hospital licenses in NSW.  

It took almost 5 months to extract an acknowledgment and response from the department. This indicated that Citigroup's Venture capital arm did not have to seek approval because they were buying nursing homes owned by a company with approval status already granted. They did not have to seek approved provider status in their own right. 

This can only mean that approved provider status, once granted, becomes a commodity which can be traded in the marketplace like any other commodity. This commodity adds value to the sale - a considerable value for a company that might not be granted approved provider status because of a poor track record.

This matter was taken up with non-commercial groups involved in or taking some responsibility for the care of the elderly and with politicians. Both ministers responsible for aging finally responded and there are letters from them on this site undertaking to correct this problem. These matters are addressed on another page and there are links to copies of the correspondence with the department and from or on behalf of the two ministers.

An election was called.  The opinion poles indicated that these ministers might not be re-elected.

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BUPA buys the nursing homes - its importance

When BUPA purchased Citigroup's DCA nursing homes, it provided an opportunity to see if the ministers had met their undertakings - or if the undertakings were hot air. The changes would not have been popular with the industry and they would have been strongly lobbied.

In addition I felt that there were real concerns about the way BUPA had done business and that it was essential that it be assessed by a body with the power to insist on disclosures.

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Ms Karmel from the department of aged care had given me assurances in 1999. She had then shouldered the unenviable task of telling me early in 2007 that these assurances were hollow because the regulations passed by her political masters did not require many of those whose suitability she should be assessing to present themselves.

I therefore faxed and posted a letter to her on 4th October 2007.  I asked

"whether the changes to the aged care regulations promised me in correspondence from the Minister for Health and Aging on 7th June and the Minister for Aging dated 19th June 2007 have in fact been made and that companies buying other companies that already have approval status will now have to seek approval in their own right?"

and then

"The question is a simple one of fact and I look forward to an immediate response."

I did not receive one.

Click Here to read the full letter to Ms Pru Karmel. 

When I had received no response by 11th October I thought it wise to send information officially to the approval body and request that they examine the issues raised.  I did this as an objection. It was never acknowledged.

On Thursday the 18th October I phoned the department and spoke to someone there. I was assured that the matter was receiving urgent attention but they would not disclose to me whether BUPA was required to apply for approval status. Perhaps this was some deep commercial in confidence secret to be kept from the public whose welfare the approval processes areclaimed to protect!

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Going Public

It was now over 3 weeks since I asked for information urgently. I therefore decided to put this information as well as any worrying information I could find about BUPA's operations on the web site. At the same time I wrote again on the 22nd October to the department drawing their attention to the information on this new web page.

I wrote

"The worrying areas I identified were situations where I felt that BUPA had not coped adequately with the tension between commercial priorities and its claimed not for profit focus. These are matters which deserve your attention. They are

• BUPA's focus on profit, growth and global expansion,
• issues relating to employees, standards, professional relationships, marketing, and culture,
• a betrayal of trust in its hospitals,
• tax evasion in England,
• its conduct in Ireland, and
• aggressive protection of its commercial interests in Australia.

I look forward to an early acknowledgment and response to my letters, particularly to my question about BUPA's requirement to apply to you for approval as was indicated would happen in the ministers' letters."

Click Here to read the full letter.

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Asking the Labor Party

We were nearing the end of a federal election campaign and I felt it was time to ask the labor party how they were going to handle this situation if they gained power.  Would they honour the undertakings.

The important role which the owners played in problem homes had become increasingly important. If one home was a problem then the others homes owned were also likely to be (examples Kenilworth and Belvedere Park --- or Brighton and Hyde Park nursing homes). The government ministers of the day were avoiding this issue.

I wrote to the shadow minister for aging, the Hon Senator Jan McLucas on 24th October setting out the issues and asking her how labor would address them, if, as seemed likely, they won the election.  I promised to put her response on this web page.

The letter 

• summarized the story of Citigroup's approval for hospital licenses but only subject to conditions when it bought Mayne Health,
• indicated why Citigroup had not had to seek approved provider status when it purchased the far more vulnerable DCA nursing home empire,
• drew attention to the alarming implications that most corporate purchasers of nursing homes since 1997 would not have had to seek approval,
• described the promises given by the two ministers still in power, and 
• referred to BUPA's purchase of the nursing homes.
  

I asked

"There are clearly two issues here that should be important for labor's policy. You are I am sure well aware of them and have already thought about them. I ask you to address them in a letter which can be set beside the present ministers' undertakings.

1. a. Assessment of the suitability of potentially influential owners of nursing homes before they purchase and
   b. what action is taken when an existing owner is shown to be a criminal or otherwise unsuitable. This has been a serious problem in Australia.
   
2. The bundling of nursing home approval status with the sale of nursing home companies. What steps will be taken to ensure that all those who play or might play an influential role behind the scenes are assessed as suitable in their own right."

Click Here for the full letter to Senator McLucas

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Update June 2008

The new minister and her staff

The shadow minister did not respond and a labor government was elected.  To the disappointment of many who had dealt with Senator McLucas, the aging portfolio did not go to her.  It was given instead to a previous policewoman, The Hon Justine Elliot MP.  She brought in new staff including Walt Secord who reports indicate had been demoted from Rudds staff because of a series of blunders. That all was not well in aged care was suggested when Heather Witham, Senator McLucas assistant and other staff experienced in aged care resigned or were replaced.

A search for "Walt Secord" on http://www.crikey.com.au yields a series of articles which might give an indication of the reasons for the difficulties that have occurred since the election in dealing with the minister and her department. Hopes have been dashed. They certainly suggest that aged care is not high on Prime Minister Rudd's list of priorities and the portfolio may have been lumbered with less promising performers. This is not a team that will confront and face down the business lobby or the private equity owners. The following are extracts from some of these articles or the comments made.  Please note that this is only one source and bias is possible.

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18 April 2007
Top of the queue we must put the senior media man Walt Secord who has years of experience in manipulating public opinion on behalf of a nerdish boss. Secord worked for NSW Premier Bob Carr and starred in that wonderful character assassination which saw an Education Minister traduce the reputation of a schoolboy for having a gun when it turned out not to be true. He is the hard man in the team and works the press gallery efficiently enough.

14 June 2007
"Walt Secord almost destroyed the life of a migrant family in Western Sydney by inventing a story. Why has the Leader of the Opposition got this scum on his staff?"

7 September 2007
There are a few of us who think Walt and his crew are acting like teenagers rather than people who will work in the PMO -- worse still they are sabotaging their own stories... weird!

12 December 2007  
Walt Secord has undergone a spectacular fall from grace. From the lofty heights of being Kevin Rudd’s director of communications he has landed a post-election appointment as chief of staff to the Minister for Ageing Justine Elliott, a former police officer.

Elliott, MP for Richmond in northern NSW, is in the outer ministry and the second most junior minister in Rudd’s 30-member ministerial team. Secord, who served former Premier Bob Carr for 10 years and then joined Hawker Britton in August 2005 as communications director, became the Opposition Leader’s chief spinmeister within a few weeks of Rudd’s capture of the Labor leadership in December 2006.

Secord’s pre-eminent role during the marathon election campaign led to the belief he would start his next career as a government bureaucrat in one of the senior portfolios – defence, foreign affairs or communications.

Four reasons have been given for Team Rudd’s decision to marginalise the Canadian-born political heavyweight:
 - - - - -partly blamed for not allocating a full-time minder to Peter Garrett during the campaign which resulted in the former rock star making naÔve, off-the-record comments - - - - .
 - - -  partly blamed for the fiasco surrounding the candidacy of George Newhouse for the seat of Wentworth held by Malcolm Turnbull.  - - -
- - - - partly blamed for Robert McClelland’s untimely reference to Labor’s opposition to the death penalty on the eve of commemoration ceremonies for the Bali bombings. - - - - . The subsequent media furore – and the pointed public rebuke from Rudd – probably cost him the defence or foreign affairs portfolios.
 - - - - -After taking soundings in the National Press Gallery, Team Rudd came to the conclusion that the sometimes abrasive and over-bearing Secord would best serve the incoming government by starting in an obscure position away from the affairs of state and the media.

This is a big comedown for The Man Mountain. He expected more than working for the Minister for Ageing in the bureaucratic backwaters of Canberra. We haven’t heard the last of him.
For full article see Rudd's chief spinmeister pays the price for campaign blunders
http://www.crikey.com.au/Politics/20071212-Rudds-chief-spinmeister-pays-the-price-for-campaign-blunders.html

8 January 2008
Of course, it would be naÔve to expect the government to promote “negative” stories about itself: there are plenty of those about already. But Ms Firth and other Ministers will do themselves a favor if they jump off the media trampoline constructed by former Premier Bob Carr and his eminence grises Walt Secord and Amanda Lampe. Rather than issue a weekly barrage of “positive” press statements to meet the targets set by the Premier’s media unit, why not try another tactic and actually do something that’s practical and may improve things for the citizenry? Just a suggestion.

18 February 2008
Walt Secord was shifted aside from his exalted position in Rudd's office but trouble has followed as Chief of Staff for Justine Elliot, Minister for Ageing. Since Secord’s arrival Heather Witham - senior policy advisor – has resigned andanother staff member has gone in the first Parliamentary sitting week. Elliot's inexperience in the portfolio and in politics is not helping

26 March 2008  
Walt Secord was Bob Carr’s longest-serving communications director, credited with helping mastermind historic election victories in 1999 and 2003. He moved on to the Labor Party palace of spin Hawker Britton, before joining Kevin Rudd’s office shortly after he became leader, where he oversaw yet another election win.

Then, as Alex Mitchell reported in Crikey in December, something happened. He ended up in the office of the Minister for Ageing, Justine Elliot. Chief of staff to a junior minister within the Health and Ageing portfolio.
---------------------------
And Queenslander Justine Elliot is entirely new to the area, having been appointed over the respected Jan McLucas, who was shadow Minister for Ageing when Labor was in Opposition.

Given that, you’d expect Secord – especially with his background in media, rather than policy – would want advisers with expertise in aged care issues.

Instead, he has created a miniature version of the NSW ALP within Justine Elliot’s office. His deputy is Patrick Muhlen-Schulte, a young Labor apparatchik who worked for Secord in Carr’s office and for NSW Roads Minister Eric Roozendaal. And Angela Koutoulas, who commenced with Elliot last week, is a former NSW Labor staffer and is currently a councillor on Rockdale City Council. In his inaugural speech in the NSW Parliament, Frank Sartor singled her out for thanks, along with ALP heavyweights such as Roozendaal and Mark Arbib.

None have any experience in any ageing-related issues, although Ms Koutoulas was an adviser to the Assistant Health Minister in NSW.

 - - - - -  But the complete lack of any experience in ageing issues in Elliot’s office, in favour of young NSW Labor talent, is remarkable.

Indeed, Secord, whose operating style has all the subtlety traditionally associated with the NSW Labor Right, has overseen the removal of all aged care experience from his staff. As Crikey reported in February, Heather Witham, who worked closely with Jan McLucas in developing Labor’s ageing policies, left after barely two months working for Secord (Witham declined to comment when approached). Bureaucrats from the Department of Health and Ageing who have filled in as advisers have been sent back to the bureaucracy, although some remain as departmental liaison officers.
 - - - - - - - But the lack of in-depth understanding, and a tendency to focus on spinning issues – something we’re familiar with from the Carr era – has them concerned, particularly given Elliot is inexperienced and lacks confidence.
For full article see Walt Secord puts a bit of mate into aged care
http://www.crikey.com.au/Politics/20080326-Walt-Secord-puts-a-bit-of-mate-into-aged-care.html

28 April 2008
The first comprehensive analysis of the new Government’s advisers shows that ex-NSW ALP staffers and senior bureaucrats are playing a strong role in shaping the new Government’s policy and political direction.
-------------------------
However, the approach of Walt Secord, chief of staff to Ageing Minister Justine Elliott, who has stacked his office solely with NSW Labor figures, is relatively rare.

9 May 2008
Rudd’s appointment of Bob Carr’s former communications director Walt Secord early in his period as Opposition Leader was taken as a hint of his intended approach to the media, borne out by the aggressive approach of Secord, which incensed some old Gallery hands .

Secord has now left – to run Justine Elliott’s office – but the approach appears to have remained the same.

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Taking the issues to the new minister

A few weeks after the election on 11 December, I wrote to the new minister raising the issue of approved provider status and asking for an indication of labor's plans. I felt sure that labor would want to deal with this. 

The threat had now become more acute because evidence coming from the USA clearly indicated that acquisition of nursing homes by private equity owners was associated with depleted staffing and deteriorating care. As private equity groups normally purchase existing nursing home companies they do not have to seek approved provider status.  Their management strategies and their cost cutting as they seek to "turn around" the business to generate more profit are likely to have a major impact on services and care.  That criminals are prohibited from holding directors post will not prevent owners appointing directors without convictions, director who will do what they are told.  

A dominant section of the for-profit sector in Australia was by now owned by private equity. Submissions predicting that care would be compromised by private equity ownership had previously been disregarded by a senate inquiry. Stories emanating from the nursing home sector suggested that problems with staffing and care were now developing in Australia.

 (see the subsection "Private Equity enters health and aged care" on the web page  "Coming to Grips with Health Care" for a summary and links)

I include the summary from the letter to the minister here.

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Summary
This letter draws attention to major problems in aged care regulations relative to the suitability of nursing home owners and promises made by the previous ministers. 

I ask for an undertaking to address two key issues and to critically examine and make plans to address a third.

•  a.    Assessment of the suitability of potentially influential owners of nursing homes before they purchase and
   b.     what action is taken when an existing owner is shown to be a criminal or otherwise unsuitable? This has been a serious problem in Australia.
  
• The bundling of nursing home approval status with the sale of nursing home companies. What steps will be taken to ensure that all those who play or might play an influential role behind the scenes are assessed as suitable in their own right?

These are issues which both the previous health and aged care ministers undertook to address They lost power before they could do so.   I urge you to go even further by reinstating probity requirements in the legislation and giving them adequate legal backing.

• The threat posed by private equity ownership of nursing homes.  I ask that sufficient transparency be introduced urgently into the system so that the quality of care provided by different providers can be easily compared by the community and early action taken.  I also ask that the conclusions reached by the recent senate economic committee inquiry and the advice given be reviewed and adjusted in the light of subsequent revelations.

I also briefly refer to a number of issues which I feel should be carefully considered when restructuring the aged care system.  These include the impact of conflicting marketplace paradigms on staff, problems in the accreditation system, and the implementation in the nursing home sector of the new prime minister’s promise of transparency.

In the long term I ask you to consider the social viability of a system that is driven by underlying paradigms that conflict with those on which the effectiveness of such services depend.

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Click Here to read the full letter

I received a brief thank you letter on behalf of the minister dated 22 January 2008 stating "The government is closely examining aged care policy and your views on the aged care industry and private equity ownership of nursing homes have been noted."  No mention was made of the key approved provider issue.

I wrote again on 4th February 2008 suggesting that the commercial operators had an iron grip on the sector and pointing out that

"My letter very specifically asked, in the introductory paragraph, for an assurance that two glaring regulatory deficiencies would receive attention.  The previous government had already promised to address these problems. These threaten and compromise the integrity and the effectiveness of the regulations"

Click Here to read this letter.

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Squeezing information from the department and the minister

In the meantime I had still had no firm confirmation that changes had not been made by the previous government - nor that they were not intended by the new government. It was therefore difficult to take this public - lest I be embarrassed.  I had not received a reply to my objection and correspondence with the department about BUPA.  My next step was an FOI application on 11 December 2007.  In my subsequent correspondence with the FOI assessor on 22 January 2008 I made my intent clear.

"I stress that my concerns follow the failure to respond to my letter to  Ms Prue Karmel in your Canberra Office dated 4th October 2007 asking whether promised regulatory changes had been made.  I wish to confirm that BUPA did not seek approved provider status, was not required to do so and that no assessment was undertaken.   These matters are of major public interest, and critical to informed community debate about aged care policy.

This is particularly important in light of the revelation of serious anomalies when a Citigroup subsidiary purchased DCA, and because of the undertakings by the two previous ministers to address the problems.  I have not been able to confirm their failure to do so before they lost office.   This uncertainty prevents the community from engaging in constructive debate and from bringing pressure to bear on the new government to address the anomaly.   I am consequently eager to press ahead with this matter before the new government’s aged care policy is set in stone."

"Despite an extensive search the department has been unable to identify any document relevant to your request.   I must therefore refuse access - - - .

As you are aware an organisation which acquires a controlling or significant interest in an organisation that already has Approved Provider status is not required under The Aged Care Act 1997 to apply for approved provider status.  BUPA, therefore was not required to seek approval from the Department of Health and Ageing."

The letter was signed by Allison Rosevear.  One wonders if the department could possibly be trying to avoid confirming that my correspondence had been received.  There is no acknowledgment.  If they had been received there would surely have been some internal memos and notes, including one referring to my telephone call regarding the urgency of the issue.

On 7 April 2008 Ms Rosevear replied

"Please note that there was no resistance to your request for information; there was no information to provide.

Your view have been noted, and, together with the views of others, are factored into the Department's work in this area."

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The labor party is not going to act

I now had confirmation that nothing had been done. I still did not know whether the minister's promised review of aged care policy would address the key problems of approved provider status and private equity ownership.

I therefore wrote to the minister personally again on the 4th March indicating that in 6 months I had received no reply to a simple question.

"I therefore write for the fourth time to ask whether the labor government plans to address this glaring regulatory deficiency, and if so, some indication as to when this will happen."

Click Here to read the letter

I finally received a response which I consider confirms that the department does not and that the government has no intention of regulating the ownership of nursing homes, even when as in the case of private equity these owners have a particularly strong motive for interfering in management and clearly do so.  Failures in care are still to be dealt with after they have occurred and only if they are detected and can be proved to have occurred.  

The lessons from the USA are once again being ignored and we are following their example.  It concerns me that instead of using her head, the minister is resorting to her policewoman ways.  She is determined to continue down a path that has already failed in the USA and in Australia.  In my view the current pressures in the system make it extremely unlikely that it these policies will be successful.

The response is a reiteration of many similar letters and responses.  You should read it and make upyour own mind whether you think that all this regulatory vigor is likely to have much preventive impact at the bedside.  Will the system still depend on detecting deficiencies in services after they have occurred and failures in care when they can be both detected and then proved to have occurred.  Too often this comes down to notes made by the staff complained about and conflicting evidence given by a single family member and staff.  Staff who have resigned or been fired because they have disputed issues with management are not considered credible.  One inquirer was told that they are not usually interviewed when complaints are investigated  It is not surprising that complaints made by family and friends are difficult to prove.  Concerns have also been expressed that staff are intimidated and that family prefer not to complain less this impact adversely on their loved ones.

Click Here to read the letter on behalf of the minister.

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Where to from Here

As I see it the only course is for the community to grasp what is happening and to exert the sort of pressure that currently does not exist.  The pressure should be on government to make them act and on nursing homes to provide good care.   A strategy starting at the bottom and ending at the top will be most effective.

We need to form local groups that will 

• take up the issues in the individual nursing homes, 
• directly monitor and document staffing and care, 
• scrutinize management practices, 
• set these against profitability and
• use this knowledge to pressure government.  

If we are to have benchmarks and standards then they should be our community benchmarks and not corporate or political benchmarks.  We regularly enter these nursing homes to visit family and friends.  Many of us have had nursing or other health care experience and can educate ourselves further. We are well placed to play an active roll and should insist that we are given a useful roll in caring for our community.  

We are far better placed than agencies in Canberra to see what is happening at the coalface.  We can ensure that our benchmarks are met in the care of our friends, family and community.  We have a responsibility to our aged citizens to gather the information needed to make rational decisions and drive change. It is clear that the market and government are not going to do so. This is an insurance for our own future.  It is our government.  With information and knowledge we can insist that it acts in our best interests.  If we don't do these things then we cannot expect others to do them for us in the years to come when we in turn are in need.

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Web Page History This page created 22 Oct 2007 by Michael Wynne Updated 26 Oct 2007, Revised 12 Jun 2008