After Sun Healthcare was given the green
light to enter Australia in September 1997 I made a collection of
documents and wrote a review of the problems of corporatised medicine
and describing the companies we were concerned about. I wrote to the
chairman or secretaries of the hospitals where Sun had some influence
and appended all this material. This is the letter
Medical Staff Group
US Corporate Medicine re-enters Australia -- Sun Healthcare
Political Forces:- Our politicians have pursued a policy of using competition and marketplace pressures to reform health care. Our minister for health has used the same simplistic explanations used in the USA to justify this. He speaks of a level playing field and of consumers shopping for quality and cost. He claims that he will not allow us to follow the US path. It is clear from his actions that his vision is centred on the corporatisation both of providers and insurers in a managed care system. This will be based on contracts between corporate insurers and corporate providers. The government needs foreign companies to accomplish this. Professionals struggling to protect the interests of their patients will be forced to contract with one or other group. They will be expected to work within the corporate framework and embrace corporate culture if they are to maintain their contracts and their income. How this differs from the USA is not clear.
Another US corporation enters Australia:- Sun Healthcare has purchased a 38% holding in Alpha Healthcare and it is clear that it will influence policy. I have made a study of international corporate medicine and believe that every Australian doctor working in a corporate hospital and particularly those working in US owned or run hospitals should be fully aware of the sort of practices which have characterised corporate health care elsewhere. The USA has the longest experience with corporate medicine. Some of the business practices being pursued by Australian "for profit" corporations are very similar to those in the USA. This is to be expected as it is the fiduciary duty of directors and managers to maximise profits for shareholders rather than provide care for patients. US corporations have been the darlings of the stock market, and have been strongly supported by the banks.
Enclosures:- I enclose an overview of the issues, and a set of documents which address many of the issues relating to corporate medicine. My particular concerns have been the consequences for patients, the pressures placed on the medical profession to indulge in unethical conduct and the sometimes less than subtle pressures and inducements to conduct care in the corporate interests. As Ron Williams indicated loyalty to the patient too readily becomes loyalty to the corporation.
Foreign Investment and Review Board (FIRB):- I have inquired about the decision to allow Sun Healthcare to operate in Australia despite the fraud investigation under way in the USA and the investigation made by FIRB. Mr Tony Hinton, ex-officio Executive Member of FIRB indicated to me that the decision to allow Sun into Australia was made by the Assistant Treasurer. FIRB acts only as an advisory body to the treasury. The treasurer may consult with colleagues or the cabinet. It is not clear whether the decision was made on the advice of FIRB or whether the strategic implications for government were such that the deputy treasurer made the decision despite FIRB's advice. FIRB is essentially a business advisory body which encourages and guides foreign investment. It is "liberal and welcoming". Their views on the probity and integrity of an applicant may differ markedly from the expectations of professional bodies including the health professions.
Purpose:- I would be very grateful if you would brief your medical staff committee and the doctors who work in your hospital so that they will be in a position to resist attempts to introduce US systems of care. Please make this material available to them. Corporations advance their arguments using fashionable and impressive sounding words as if they were irrefutable. They sound very plausible and it is only when their arguments are viewed from alternative points of view that the dangers are perceived.
CLICK HERE to read the Review of corporate medicine appended to this letter.