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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 all of 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.

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This page examines the upbeat claims made by the company Nova Health when it floated in 2002. The page documents its collapse, resuscitation and finally takeover by Healthscope in 2005.

Australian section     

 Nova Health  
(2002 to 2005)
  
 

CONTENTS

 
 

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 Summary

Nova Healthcare was formed by a group of hospital owners and past health care executives. It came to market with a hotchpotch of small hospital with few prospects but with upbeat claims about profitability and prospects for growth. Its planned strategies were unrealistic and some of its planned business strategies were of a questionable nature, particularly in the light of the pressures generated by the financial mess it found itself in.

Soon after its float it purchased HCA a small company operating on the Gold Coast. When it was in dire straits financially soon after, the owners of HCA helped to keep it afloat. New management was brought in. Almost all of the original hospitals were closed or sold and the company then then merged with Healthscope.

 

 
 

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Nova's origins

Nova Health was formed in early 2002 by a number of individuals who owned separate hospitals. It comprised about 430 beds in about 9 small hospitals (average under 50 beds) in NSW and Victoria. It started with a $37.5 million float at $1 per share.

The chairman Jim Dominguez was formerly on the management committee for Garvan Medical Research Institute and chairman of St. Vincent's Hospital. Managing director Peter Wilkinson was a 20-year veteran of the health care industry, who previously was in charge of Australian Hospital Care. A disillusioned Dr. David Adler had gone from the public system to Hospital Corporation of Australia, which changed its name from Hospital Corporation of America in 1985. He later became the director and major shareholder of Sydney's Kensington Private Hospital. He was a board member of the Australian Private Hospitals Association where he was an advocate of privatisation of public services. He was a principal of Prime Health Management. He brought his private hospital into Nova Health. These founders had a background in public health and probably still naively believed that the market would allow them to provide the sort of care and services in the for profit market sector which the public system had denied them, and they hoped to prove it.

The founders were upbeat about the current profitability of the hospitals and of the prospects for growth. One wonders on what information this past profitability was based, given their subsequent performance and Nova's divestment of 8 of them.

May 1987 Adler and Wilkinson

Dr David Adler is one of the bright young stars of the New South Wales health care industry. Adler, 31, spent four years as assistant medical administrator at Prince of Wales Hospital and Prince Henry's Hospital, the state's biggest teaching institutions. He is now a medical director for the Hospital Corporation of Australia. The meat in the sandwich situation was one that affected him and other administrators in New South Wales, particularly during the Medicare dispute. He says public hospital administrators were caught in a conflict that was not theirs - it was between doctors and the government.

Adler says some people have left the public sector with sour grapes, but says he left for positive reasons. "The thing I find most exciting where I am now, is being at the cutting edge of development, facing new challenges and opportunities constantly," he says.

This type of motivation is much the same for Peter Wilkinson, who left his high position in the Victorian public health sector with a great deal of bitterness. Wilkinson's last position in the public service was as secretary of the state health commission. He spent 20 years in the public service, six of those in health. Wilkinson was ready to dedicate his working life to the service, but tired of the constant political struggle. He could perhaps be seen as one of the decision-makers scorned by Dreher and others. He claims he was severely restrained by having to take strict directives from the minister's office. "The political arm is producing the initiatives and the directions and the ideals and the ideas. You're simply the implementation horse, if you like," he says.

Wilkinson is relishing his new environment as chief executive of Australian Hospital Care's South Eastern Hospital. "Here the world is your oyster. It's your ball game, you run it. You're accountable in different ways to different people, but it's your ball game," he says.
New Strength For Private Hospitals Business Review Weekly May 15, 1987

Mar 2002 Nova float

Nova is preparing a float of $36 million in $1 units expected to open around mid-March and list early April. In NSW, Nova has a 94-bed cardiac hospital, two post-surgical hospitals and one surgical-medical hospital. In Victoria, it has four surgical-medical hospitals and one psychiatric. Each is historically profitable and offers growth potential. Part of the rationale in bringing the hospitals together is to raise funds for further expansion and upgrade.
Healthy Outlook For Biotech Floats Shares Magazine March 1, 2002

Mar 2002 Use of the money

Nova Health, which will acquire nine hospitals in NSW and Victoria on completion of the issue, will use $13.5 million of the new capital to fund the acquisitions and $16.5 million to retire debt.
Nova Comes A Courting Australian Financial Review March 8, 2002

Mar 2002 Expansion plans

Nova is already eyeing off some of the estimated 80 other independent, non-church or charitable private hospitals on the eastern seaboard, with the long-term aim of forming a chain of hospitals along the coast.
Health Group Hopes For Super Nova The Age March 30, 2002

Apr 2002 Directors share

A majority of the company was floated, with directors and the hospitals' existing owners retaining 42 per cent.
Investors rush hospital float The Advertiser April 3, 2002,

Apr 2002 Oversubscribed

About $31 million worth of shares was snapped up by large investors and $5 million by small investors, including Nova employees.
Big burst of health for Nova Herald Sun April 4, 2002

2002 All hospitals profitable

All nine hospitals were profitable but Nova would assume debt liabilities of around $20 million from the acquisitions, it said.
Nova Health float oversubscribed; to list next Monday Australian Associated Press April 8, 2002

Apr 2002 The 9 hospitals

On 5 April 2002 Nova Health Limited also completed the acquisition of Brisbane Waters Private Hospital, Longueville Private Hospital, Westside Private Hospital, Roma Private Hospital, Dandenong Pinelodge Clinic Private Hospital, Baronor Private Hospital, Malvern Private Hospital, Hartwell Private Hospital and Mountain District Private Hospital.

Debt of approximately $35,000,000 associated with the hospitals was repaid in connection with the acquisitions.
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The shares issued to the vendors of the hospitals are subject to voluntary escrow restrictions until 10 April 2003.
New Listing Confirmation of acq/Update on hospitals to be acq. Australian Stock Exchange Company Announcements April 11, 2002

2002 The owners

Essentially, Nova is a consolidation of the hospitals belonging to its directors. Greg Farmer, Nicholas Cunio and David Adler have all agreed to sell their private hospitals into the float in return for cash and shares.
French Fluff Down The Mine Sydney Morning Herald April 16, 2002

 

 
 

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A wobbly start

Nova shares held their price for about 3 months after floating falling only a few cents. In spite of its optimistic forecasts about growth by internal development and acquisitions the company did not prosper.

At the outset Nova claimed that it was concentrating on increasing the number of beds at its facilities and in increasing occupancy. It was aware that its negotiating power was limited and instead planned to change its patient mix by focussing on the step down strategy employed so successfully by the hospital corporations and aged care chains in the USA to escape the cost constraint imposed by the Diagnosis Related Group (DRG also called case-mix) method of payment.

In the USA sick patients, after surgery or major illness were shunted out of hospital as early as possible into nursing homes or other post-acute facilities, where DRGs did not apply, for their recovery. This meant that more of the DRG payments made went into profits instead of care, and that rehabilitation already covered under the DRG item could be charged for separately in the nursing home or rehabilitation centre. The weaknesses in the US Medicare system were exploited to make vast profits and build huge corporate empires.

When patients suited to this profitable quick turnaround system of care are targeted, sufferers with chronic illness that are less rewarding are passed over. They struggle to find good hospital care.

The selection of profitable patients ahead of needy but less profitable patients is called cherry picking. It is illegal in the USA and Australia. Nova denied that what it was planning was cherry picking.

Doctors were at this time attacking Mayne Health for cherry picking. Little Nova was not likely to get away with it. In any event most of their hospitals were too small to provide the sort of complex services that benefit economically from step down care. The two most profitable hospitals were small hospitals providing aged care and post surgical recovery. In the USA these would be considered to be nursing homes branching into "step down" or "post acute care".

This strategy would have compromised their credibility and undermined their marketing and recruitment of doctors. We hear no more of it publicly.

Apr 2002 Using step down care and Cherry Picking

The newly listed Nova Health private hospital group is quite open about plans to alter its patient mix in a bid to raise average daily revenue and shorten patient stays.

Nova plans to move more towards higher-cost procedures in some of its nine hospitals to reduce its reliance on health fund decisions for particular procedures.

But Nova managing director Peter Wilkinson denies Nova will be "cherry-picking'' - the practice of taking the more lucrative cases and ignoring elderly and chronically ill patients who yield lower revenues.
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Mr Wilkinson said many observers made the mistake of thinking hospitals could only generate increased revenue by winning increased rates for different procedures from the health funds.

"There are other ways you can do it. One of them is case-mix.''

He said the Brisbane Waters hospital in Sydney did heart surgery and, by increasing its cardiac workload and lifting the proportion of work that represented, the average revenue a day would increase regardless of health-fund negotiations. He said the new funding model, where health funds pay a set amount for an individual episode - a hip replacement, say, or a heart bypass -had also placed an emphasis on shortening patient stays.
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"You might be doing a home visit to see if they need renovations at home or you might be talking to councils about Meals on Wheels services, so you can be doing a lot of things to make sure the patient does not necessarily have to stay in hospital for three weeks if they can be appropriately placed in two weeks.''

The key to this plan was that nursing home costs did not come from health funds, he said.

"Nursing home funding is a different pool of money. That comes from the government rather than the health funds.''
Nova Sees Healthy Growth In Cutting Hospital Stays The Age April 25, 2002

May 2002 Most profitable hospitals

Nova owns and operates nine, mostly small, private hospitals, five in Victoria and four in New South Wales. It has a total of 431 beds, with a mix of business covering psychiatric, post-surgical/rehabilitation and general surgical medical. Since the float, the share price has hovered just under its $1 issue price.
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Knapton says the most profitable of Nova's hospitals are two of its smaller ones, Roma Private in Sydney's eastern suburbs and Longueville Private on the lower North Shore. Both specialise in aged care and post-surgical recovery.
News and Features - Healthy profits. Business Review Weekly May 9, 2002

Dec 2002 Marketing and recruiting

 Preliminary marketing strategies have been developed at each hospital and are starting to show results. Group-wide recruitment of additional doctors is taking place.
Chairman`s AGM Address to Shareholders. Australian Stock Exchange Company Announcements December 2, 2002

 

 
 

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HCA

HCA came into existence in 2001 when the family of a Gold Coast surgeon seized the opportunity to buy a large hospital cheaply and then build on their good fortune.

May 2003 History of HCA

  When Mayne bid for Australian Hospital Care in 2001, the Australian Competition and Consumer Commission forced the divestiture of some hospitals, most notably Allamanda.

At the time, the Browns and Thynnes owned a medical facility nearby but were threatening to build a new general hospital. That deterred potential rivals from buying Allamanda and depressed the sale price to a super cheap $40 million.

As well as picking up Allamanda, the two families subsequently bought a couple of other private hospitals in the area, and late last year sold the package for a combined $100 million, generating a quick profit of $20-30 million.

Including debt, Nova paid $61 million for the operations of the hospitals, along with some of the underlying land and buildings. But the biggest slice of the hard assets, the land and buildings of Allamanda itself, were sold for $50 million into an unlisted property trust, Essential HealthCare, in which the Browns and Thynnes are cornerstone investors with a $10 million stake.
Nova needs transfusion The Sydney Morning Herald May 12, 2003

 

 
 

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Nova’s Takeover of HCA

In spite of all the hype 3 months after floating (July 2002) Nova was still trading below its listed price at about 85 cents. It had promised to grow. It moved into Queensland and made its first acquisition doubling in size by acquiring HCA (5 facilities) for $58 million. This was funded by debt and shares. HCA’s Thynne and Brown families became major shareholders in Nova. Two Thynne family members joined Nova’s board.

This purchase gave Nova the large 218 bed Allamanda general hospital as well as busy day surgery units on the Gold Coast. The properties were transferred to a property trust by HCA and then leased by Nova so reducing the cost.

July 2002 HCA owner's shares in escrow

  Assuming that the profit thresholds are achieved, the HCA sellers will together receive sharer representing 27.8% of the issued share capital of Nova. The share consideration will be satisfied by the issue of ordinary shares at $0.90 per share. These shares will be subject to voluntary escrow restrictions for a period of 12 months from completion.
Nova Health Limited (NHL.AX) Acquisition of HCA Group & Financial Update. Australian Stock Exchange Company Announcements July 29, 2002

July 31 Becoming a major player?

  Nova Health's $61 million acquisition of three prime Gold Coast hospitals this week has more than doubled the size of Nova and leaves analysts saying the company is shaping up as a powerful player among Australia's private hospitals.
Hospital deal creates super Nova Australian Financial Review July 31, 2002

 

 
 

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Nova Gets Very Sick Very Quickly

Six months after the purchase of HCA and only a month after an optimistic chairman’s report the share price which was down to 77 cents fell by 8 cents prompting a stock exchange inquiry. Naively Nova gave some real reason’s why the stock was under pressure, including big increases in nurses salaries, insurance costs, lower margins on prostheses, and some operational issues. At the same time profit projections were halved promising only a 6c dividend. Institutional investors knew Nova did not have the leverage to negotiate payments to cover all this. This sent the share price plummeting further to 50 cents.

Jan 2003 Shooting itself in the foot

  Nova Health yesterday showed the market how a company can blatantly undermine market confidence in its own shares.

In a devastating demonstration of how not to respond to an ASX price query, Nova provided a list of five factors working against the company and then tacked a de facto profit warning on the end of the explanation.
Nova Health on sick bed. Australian Financial Review January 9, 2003

 

HCA had entered into a complex lease arrangement with a newly formed trust called Essential Trust which purchased HCA’s facilities. The trust raised $28 million to buy the properties. This strategy gave more cash to the original HCA owners who were major investors in the trust as well as Nova shareholders. As directors on Nova they were leasing the facilities from their own company..

In March 2003 Nova did a $20 million write down of assets - 25% of what Nova paid for them. It did not pay a dividend because results were so disappointing. It started restructuring and replaced the managers in many of its hospitals. Its share price fell to 25 cents.

The original owners of HCA had been paid in shares so sustained huge losses. They had undertaken not to sell for a year.

The owners of Nova’s original hospitals had accepted 70% of the purchase as $1 shares. Some of them now sought to depose and sack several of the original shareholders and office holders (Jim Dominguez, Peter Wilkinson, David Adler and Nicholas Cunio). One wonder again who told potential buyers of shares that the original hospitals had been profitable and on what basis. A special general meeting was called in May 2003 but the motions to sack these directors failed. Nevertheless all of them resigned and were replaced over the succeeding months. The share price went on falling, down to 11.5 cents in June 2003.

Mar 2003 In intensive care

Tiny hospital operator Nova Health yesterday joined industry giant Mayne Group in intensive care after slashing the value of its hospitals, wiping out its interim profit.

Investors immediately conducted surgery on the Nova share price, cutting off 32 per cent or 12 a share, leaving it at a record low of 26 and with a poor prognosis.
Nova On The Operating Table As Vision Vanishes The Age (Melbourne) March 11, 2003

Mar 2003 Those hospitals?

So much for all those profitable hospitals.

Nova shares touched $1.06 on the second day of listing and it's been pretty well downhill all the way since.
Around the Traps ... with THE FERRET Australian Business News March 11, 2003

Mar 2003 Huge personal losses

Nova issued 15.472 million shares to companies associated with HCA's Nathan and Ben Thynne and Corey Brown as part payment.

Those shares, worth close to $16 million at one point, were valued at $4 million at yesterday's market close.
Nova downgrade hits Coast trio's fortunes. Gold Coast Bulletin March 12, 2003

 

The original upbeat projections for profitability and growth made in 2000 can be contrasted with the more realistic appraisal made after the company had purchased HCA and was in deep financial trouble.

May 2003 Then and now?

The theory sounded better than the reality. Nova was in trouble almost from the outset. For the IPO, the company consisted of nine small private hospitals in New South Wales and Victoria, all previously owned by individuals, small groups of doctors or other investors.

In July last year, Nova announced it had purchased a small hospital group called HCA Australia, based in south-east Queensland, for close to $60 million (the precise amount will depend on earnings targets being met). In total, it had 768 beds, and another 50 have just been added through a refurbishment.

None of the original hospitals are at the high-tech end of medicine - some facilities are relatively old, in need of capital expenditure and several are essentially devoted to palliative care. The main HCA hospital, Allamanda Private, is bigger and more modern than the others.

This suggests that most of Nova's hospitals do not have any competitive edge and will struggle to maintain occupancy rates.
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Second, health insurers pay about half the daily rate for medical patients (most of Nova's patients are medical patients) compared with rates for advanced surgical patients. That means second-tier hospitals do not have the capacity to produce the revenue streams available to top-end facilities.

There does not appear to be a convincing strategy in Nova's amalgamation of nine hospitals.
The un-health sector. Business Review Weekly May 8, 2003

May 2003 Paid too much - No leverage

Nova paid too much for the bunch of hospitals it bought when it went public in early 2002 a number of small suburban hospitals in Sydney and Melbourne including the Roma in Randwick and Concord's Westside hospital. There are also concerns it overpaid for HCA Southport, which has missed forecasts since joining the group.
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Nova managing director Peter Wilkinson says: "What Nova discovered after its listing was that its portfolio of hospitals across Sydney and Melbourne did not ... give it any muscle when dealing with health funds."

"As private hospital operators have found over the past few years, unless they operate some hospitals which have a regional `monopoly', they find it very hard to get a foot in the door when negotiating with health funds.
Nova needs transfusion The Sydney Morning Herald May 12, 2003

May 2003 A loss

After a $20 million write-off of goodwill, Nova posted a December-half net loss of $19.8 million.
Nova to feel the pain of rights move The Age May 20, 2003

May 2003 No leverage

One recent example of how a good idea can go wrong is Nova Health, whose shares have gone through the floor after the company paid too much to expand its chain of private hospitals, only to find that its size gave it no added clout with health funds.
Take your medicine The Sydney Morning Herald May 21, 2003

June 2003 $45 million write off

Nova plans to write off a further $45 million of goodwill, bringing the total for the year to June to $65 million.
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In its prospectus for the revised share issue, Nova confirmed that it was in breach of banking covenants with St George Bank, to which it owes $40.4 million.
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"We did inherit a ragbag of hospitals," he (Mr Dominguez) went on to say.
Nova struggles to stop bleeding The Age June 23, 2003

June 2003 HCA not as profitable too

He said profits from the HCA facilities - Allamanda, the Allamanda Surgicentre, Southport's Pacific Private Hospital and the Tweed Day Surgery - were significantly lower than was assumed when they were bought.
'Ailing health' Nova after $19 million shareholder injection. Gold Coast Bulletin June 24, 2003 

 

 
 

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Rescue

In desperation Nova went to the sharemarket in May 2003 with a 2 for 1 rights issue at 12cents a share in order to raise $19 million to reduce its dept and relieve its stretched balance sheet. Its share price went down to 11.5 cents.

Existing directors rescued the company by underwriting the shares and buying large numbers so increasing their holdings considerably. The share price rose to 25 cents by August 2003 but were back to 19 cents in November.

The company had always been upbeat about its prospects and unrealistic in the information given to shareholders. The Australian Securities and Investments Commission were particularly concerned about the quality of the information given to shareholders during this float and placed some restrictions on directors.

May 2003 Underwriting the float

Its major shareholders, companies associated with Greg Farmer and Gold Coast trio Nathan and Ben Thynne and Corey Brown, are to take up their full entitlements and will also sub-underwrite the issue.
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A shortfall could see the Thynne and Brown companies take up extra shares, a move which would see their 19.48 per cent Nova holding climb above 20 per cent.
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Its shares have gone from a high of $1.06 to a low of 17c.
Nova looking to fresh injection. Gold Coast Bulletin May 21, 2003

Jan 2004 ASIC not happy

Also, in its short life as a public company, Nova has not distinguished itself by providing clear information for shareholders. In August last year, the Australian Securities & Investments Commission took action against Nova over gaps in documentation for its rights issue.
Hospital Case Business Review Weekly January 29, 2004

 

 
 

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Restructuring for Profitability

Like other companies in this position (eg Healthscope in1995-7), Nova started restructuring its failed management and selling or closing its money losing hospitals. In August 2003 chairman Dominguez was replaced by an outsider Edward Fyvie. Thirty year old Hartwell hospital in Melbourne was closed and the site sold.

The board at this time was a mix of the original investors and those from HCA. Dominguez, Wilkinson, Adler and Cunio had been the target of some of the original investors’ anger and were soon to resign. Wilkinson in March, Adler in April and Cunio in May 2004.

Jan 2004 Directors

Directors: Mr Edward Fyvie (Chairman), Mr Peter Wilkinson, Mr John Collins, Mr Benedict J Thynne, Mr David Adler (Non-Executive), Mr Nicholas Cunio (Non-Executive), Mr Gregory John Farmer (Non-Executive), Mr John P Hannaford (Non-Executive), Mr Nathan LT Thynne (Non-Executive)
Nova Health Limited. Jobson's Year Book January 5, 2004

 

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Looking for Patients

Incentives linked to profits, marketing, hot lines and screening programs have been at the root of overservicing, fraud and mistreatment of patients in the USA. The strong pressures of the marketplace drive companies into exploiting the profit potential of these services and it is easy to rationalise dysfunctional conduct.

When evaluating the US company, Tenet Healthcare’s presence in Australia in 1993 the West Australian Department of Health pointed to the risks hot lines and screening services posed when supplied by market interests, mentioning heart disease as a potential problem.

Nine years later, in 2002, a massive scandal broke around this same company in California. Hundreds of patients, many recruited from a screening service, underwent needless but very profitable cardiac surgery. Some of them died. By 2002 the person who was CEO in Australia in 1993 held a senior position in California but it is not known if he was involved.

Nova was under financial pressure and had been struggling to increase its occupancy rates. In doing so it set up a hot lines for patients with chest pain. This is an anxious, gullible and vulnerable group, only some of whom have heart disease. Given this background and problems elsewhere such a service, provided in the for prophet context, deserves close oversight.

Sept 2003 Hotline

The group has been to the forefront in medical innovation.

It has established a chest-pain hotline and an incontinence clinic and has facilitated procedures that include a capsule endoscopy and inserting an artificial spinal disc.
HCA Healthcare Gold Coast Bulletin September 6, 2003

 

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A Radical Restructure

In March 2004 a new director with experience at Ramsay, John Randall was appointed. The CEO, Wilkinson, still under pressure from shareholders resigned. He was replaced as CEO by Geoff Sam who in 2003 had prepared the not for profit Adelaide Community Healthcare Alliance, ACHA, in South Australia for its joint venture with Healthscope, only to be fired immediately. Nova gave him a $300,000 package, plus and incentive plan to fix the problems.

Sam set out to rid Nova of almost all of the small hospitals Nova had purchased when it floated and keep only those that were profitable and would tempt a buyer. He moved out of the competitive Victorian and NSW metropolitan marketplace and concentrated on the Gold Coast where the company had leverage.

Of the 9 original hospitals one had already been closed. Sam a;so closed the small 33 bed Roma hospital in Sydney in April 2004 and in July put up 6 hospitals in Victoria and NSW for sale - all with less than 45 beds. Nova moved its headquarters from Melbourne to the Gold Coast. It restructured its finances and reduced its debt.

Independent Private Hospitals of Australia bought four of the hospitals for $21 million and then another for $2.6 million. Australian Public Trustees Ltd bought the sixth for $3.5 million.

That care may have been put under pressure by Nov'a financial problems is suggested by difficulties in accreditation in one of the hospitals sold to Independent Private Hospitals.

At the same time Nova opened Rivercity Private Hospital, a small 31 bed facility with several available theatres in Brisbane. It could be expanded into a day care facility.

July 2004 Selling hospitals

Nova Health Ltd intends to invite tenders for the purchase of five of its hospitals.

These are Baronor Private in West Essendon, Victoria; Malvern Private in Malvern East, Victoria; Mountain District Private in Boronia, Victoria; Westside Private in Concord, NSW; and Longueville Private in Longueville, NSW.
Nova Health to invite tenders for 5 hospitals Australian Business News July 6, 2004

Nov 2004 The first sale

Nova sold four hospitals, Pinelodge Clinic, Baronor Private Hospital and Mountain District Private Hospital located in Melbourne and the Longueville Private Hospital in Sydney, to NSW-based Independent Private Hospitals of Australia, a company associated with medical industry figures Dr Lionel Chang and Peter Catts, for $21.5 million in September.
Healthier Nova set for transplant operation The Gold Coast Bulletin November 9, 2004

July 2005 Accreditation issues

THE operations manager of a Boronia hospital criticised by reports in the daily media has hit back at "out-of-date" accusations that it provided sub-standard patient care.

Shane Neaves, of the Mountain District Private Hospital, said the Australian Council of Healthcare Standards figures quoted were relevant to 2003, and the situation had changed "significantly" under new management in the past two years.

The review of 640 health facilities named the Boronia hospital as one of 26 centres to receive a `high priority recommendation'.
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"The hospital is an accredited hospital with ACHS and new owners Independent Private Hospitals of Australia are totally committed to high quality and clinical governance issues within the private healthcare sector."
Old issues irk hospital Knox Leader July 5, 2005

 
 

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Healthscope Grabs Nova

Nova now consisted of a small package of hospitals on the Gold Coast where it had good leverage but was too small to take a stand. It was an enticing morsel for any larger company wanting to increase its leverage, but one not likely to run into difficulties with competition regulators.

Healthscope, which did not operate in Queensland took the bait and a friendly takeover of Nova’s five facilities and 422 beds was soon under way. Something in the wind had alerted the market and Nova’s shares went up to 34 cents.

Healthscope paid 30 cents a share, and assumed $13 million in debt - a total of $85 million. While this was less than a third of the $1 the original investors paid, the Thynne family groups, which had rescued the company at 12 cents made a handsome profit.

Mar 2005 The downsizing

Goldman Sachs JBWere analysts said Nova had undertaken a program of closures and divestments of late, choosing to focus on its better located hospitals and aged care facilities in Queensland, NSW and Victoria.
Healthscope, Nova getting into bed The Sydney Morning Herald March 30, 2005

Mar 2005 Its value

Given the $53 million worth of debt on Nova's balance sheet, this would give the company a proposed enterprise value of $124 million.
$71.5m bid for Nova on the cards The Age March 30, 2005

Mar 2005 The facilities

Nova's facilities include five Queensland hospitals and one in New South Wales.
HEALTHSCOPE ANNOUNCES $85M BID FOR NOVA Australian Company News Bites March 30, 2005

Mar 2005 Some lucky ones make a profit

A GROUP of investors who helped pull Nova Health from the deathbed two years ago hit the jackpot yesterday after a national healthcare operator made an $85 million takeover bid for the Allamanda Private Hospital operator.
Takeover bid good medicine for Nova The Gold Coast Bulletin March 31, 2005

Apr 2005 Rewards for the rescuers

When Nova ran into debt problems they came to the party during a shares issue at 12c, helping prop up the company. This week's Healthscope 30c a share takeover has delivered them a happy return, a healthy 150 per cent profit.
Winners & losers of the week The Gold Coast Bulletin April 1, 2005

Apr 2005 The facilities

Nova operates hospitals and day surgeries in Queensland and New South Wales.

They include Allamanda private hospital and surgicentre, Tweed day hospital, Pacific private hospital,and River City private hospital in Queensland, and the Brisbane Waters private hospital in NSW.
Healthscope bid for Nova fair and reasonable, says expert Australian Associated Press Financial News Wire April 7, 2005

 

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Web Page History
This page created May 2005 by
Michael Wynne
Minor update October 2005