Additional pages and changes added November 2001
I started work on the Australian pages and there is now extensive material available about Alpha Healthcare. I have written a page describing attempts to contain and dislodge Sun Healthcare and linked this to copies of correspondence. Those interested in Dissent and whistle blowing may find this interesting. I have written much more about Mayne Nickless, particularly its new manager Peter Smedley - although there is still one page to write. I will be away so am updating what is available Nov 2001.
Additional pages and changes added February 2002
A major thrust of economic policy and market
enthusiasm in Australia during the 1990's has been the privatisation
of public hospitals and the colocation of private hospitals on public
campuses. Mayne Nickless was a major advocate and enthusiastic
participant. Privatisation has been a costly failure and enthusiasm
for colocations has waned. In February 2002 I added
a number of pages which examined
these developments, described the privatisations and analysed the
predictable reasons why it all came unstuck. I wrote a page about the
of interest involving Mayne Nickless
staff who were appointed to government positions and the political
embarrassment when this all came unstuck in the scan scam. I did not
get to writing the final page on Mayne Nickless but there are still
The corporatisation of general practice has held centre stage during 2000 and 2001. The gloss has now gone off this. An overview page outlines what has happened and where it has come unstuck. A series of individual pages discuss the companies involved including Foundation Healthcare, Lifecare, Sonic Healthcare (a pathology provider with links to Foundation and Lifecare), Endeavour Healthcare, Revesco/Medical Care Services/Gribbles (it keeps changing its name), and Primary Healthcare.
Healthscope has switched from general hospitals to psychiatry, rehabilitation etc. I have concerns about the similarity of the rhetoric surrounding the company to what happened in the USA 10 years ago.
Mayne is in
trouble again and Peter Smedley has
the prime figure in the psychiatric scandals and the fraud exposed in
the USA between 1991 and 1994 is acused of low levels of staffing and
has recently paid US
$55 million to settle actions alleging fraud
at a series of different sections of the business.
During 2002 there were growing concerns about two companies and both dissolved spectacularly into scandal.
Tenet Healthcare, the new name for National Medical Enterprises which defrauded Medicare and misused patients for profit in the early 1990s dissolved in a disturbing scandal. Not only has it manipulated Medicare payments but some of its doctors are accused of carrying out profitable but unnecessary cardiac operations. Estimates of likely settlements range from $1 to 6 billion.
HealthSouth, the rehabilitation giant was found in March to have built its entire 15-20 year empire on fraud, US $2.5 billion over the last 5 years. Twelve senior staff have already pleaded guilty.
Both these new scandals provide fascinating and different insights, confirming what we know about corporate medicine and extending it considerably.
Citigroup buys share in all Mayne hospitals February 2004
New pages were added in February 2004 to fill gaps. These included pages on managed care and pharmaceutical fraud. A page has been added looking at the market solutions for health, proposed by Joseph Califano (President Reagan's health adviser), as expressed in his book 18 years ago. The page looks at why he was wrong and what happened over the last 18 years as a result. His policies are still followed today.
As Mayne pursued aggressive market practices doctors walked away leaving it with massive losses. A group of venture capitalists dominated by a member of the Citigroup companies purchased Mayne hospitals in late 2003. They planned to make them profitable and then sell them again within 3 years. New pages describe how Citigroup's ownership was kept from Australians and the implications of this sort of purchase for the hospitals. A series of web pages describes the large numbers of scandals and frauds in which Citigroup and its subsidiaries have been involved. The pages also describe their involvement and role in health care in the USA.
The site has grown enormously over the years. Not only was it difficult to navigate but it was very difficult to find pages when they were wanted and maintain them. The site still needs a great deal of work. For both purposes a set of site maps built around a central map have been developed. Paths through the site are suggested and an outline is given for each page. The links open in a second page leaving the maps open.
Links to the maps have been added to each page and the links at the top and bottom of each page have been reorganised to follow a pattern. First maps, then the path back to home and finally links to related material. All pages now have a single background colour and use a screen font (Verdana). They follow a common colour pattern. These won't print well and a link to printing advice has been added.
The Mayne Health/Affinity Health pages have been updated with a new page has been added to describe the collapse and sale of Mayne's hospital division to a Citigroup consortium. Primary Health objected to the comments made abut it in 2002. It has become a particularly interesting company. Its page has been rewritten and brought up to date. Brief updates have been added for Tenet Healthcare, HealthSouth and Citigroup. Several pages describing the relationship between corporations and politicians have been amalgamated and rewritten using health care examples and links to other pages on this site. The page theorises about the relationship between the way the market understands democracy and corporate conduct - and the consequences of this for democracy.
There is still much to do in updating poorly written sections, filling gaps and removing obsolete material.
The changing Hospital Scene in
There were large gaps in the information about Australian companies, as I did not get to them in 2002. In addition to this there have been major changes over the last 3 years with consolidation of the hospital sector. Two smaller companies to which I gave little attention have been very successful, increasing rapidly in size with takeovers and mergers until they dominated the sector. Disputes with insurers and the importance of leverage in resolving these disputes have come to dominate the sector so that smaller operators without leverage are severely disadvantaged. This includes most not for profit operations. Ramsay Healthcare has acquired most of Affinity Health's hospitals and is now the largest. It dominates the sector with Healthscope the second largest some way behind. The success of both was based on leverage. Both companies now have several pages describing their histories and current practices.
I have also included pages on Nova Health and Benchmark, two smaller companies which succumbed. I have included a page on the company Australian Hospital Care, once the second largest in Australia until acquired by Mayne Health in 2001. There are a number of minor upgrades to other pages.
A landmark book "Critical Condition : How Health Care in America became Big Business and Bad Medicine"was published in the USA in November 2004 while I was there. It affirms most of what has been on this web site for some years and more. I have added a page about it.
A paper by Armstrong and myself exploring the
Canadian Romanow Commissions findings and their relevance for
Australia was publiched in Health Issues in 2003.
<get pdf file wynneandarmstrong.pdf>
I visited Canada during 2004 and in Edmonton
I spoke about the impact of corporate medicine on doctors behaviour.
The Canadian consumers association has put a background paper I gave
them on the www and I have put a copy on this web site.
<get pdf file WYNNELP2710.pdf>.
In 2004 a paper of mine "Hazards in the
Corporatisation of Health Care" was published in the Autumn 2004
edition of "New Doctor" about corporate medicine and the Citigroup
led purchase of Mayne hospitals
<get pdf file pp2-5.pdf>.
A paper "Belief Versus Reality in
Reforming Health Care"contrasting for-profit with not-for-profit
health care is to be published in the August 2005 edition of "Health
Issues" and may be available on their web site in due course
<get pdf file jmwynne83.pdf>
Links to the publishers of these papers have been on the web site. In Sep 2006 I added a pdf copy of each to this site to make access easier.
At the end of 2005 and early in 2006 the section on Australian hospital companies was reorganised and several pages added to fill gaps and tell the story of corporatisation starting from the early years. The root page was completely rewritten to tell the story. At the same time a new section addressing the for profit corporatisation and rapid consolidation of diagnostic services in Australia was added. While most of these pages were written in late 2005 and early 2006 they were only put on the web site at the end of September 2006
After the rape and sexual abuse scandal in Australian nursurng homes in January 2006 I took a long and alarmed look at the enthusiasm the market was displaying for milking the misfortunes of the aged for profit. I wrote pages about this, the changes which have occured, the impact of this on the not for profit community services, retirement villages, nursing homes and home care. This is summarised on the main Australian page. There are pages describing the history of a representative sample of the companies operating in the sector. This is a large addition to the web site and the root page for this section is Markets and the Aging Bonanza
The main Australian page was a mess and it has now been completely rewritten and contains an overview of the progress of corporatisation in Australia. It contains only links to the root pages for each section and selected links to topics covered in the discussion. The Australian site map now gives a list, links and summary of each web page in the Australian section.
There have been developments in the USA with HealthSouth (it has now left Australia) and Tenet Healthcare (a billion dollars in fines) which I have not had time to update.
STOP PRESS More international invasions in Australia:- It is now revealed that Citigroup operated Affinity Health ran into trouble in NSW when a probity review found it wanting and imposed conditions and compliance requirements when it granted licences. This was when Affinity sold its hospitals to Ramsay. Development Corporation of Australia have not been making the profits they expected from radiology and nursing homes. Shares have slumped. The same Citigroup companies are now buying DCA, Australia's largest nursing home corporation. How commonwealth approval agencies will handle this situation remains to be seen? Citigroup has a dreadful track record. Nursing homes are at far greater risk than hospitals. The commonwealth has indicated its concern that only suitable groups should be approved. NSW Health had sufficent concern about their suitability to impose restrictions in the less sensitive hospital sector.
In addition to this the government has shifted its focus from the troubled nursing home industry. It has welcomed a giant US home care company into Australia to further these policies.
Both of the above problems are summarised on the main Australia page where there are links to pages which explore and illlustrate the issues
Objections were lodged to the sale of DCA to Citigroup. The aged care department sat on them for 4 months before revealing that, in spite of the assurances it had previously given about its processes, it had been emasculated and did not have the power to evaluate the suitability of multinationals buying Australian nursing home companies. New pages have been added and others updated to explore what happened and examine the correspondence.
The 2002 Tenet Healthcare fraud has worked itself out to with multiple settlements totalling about US $2 billion but its economic survival is not yet assured. Original pages have been revised and updated. Several new pages habe been added to describe and analyse the last 4 years. Tenet remains one of the best examples of the way the market fails and the reasons for this. Concerted action and correspondence after the sale of DCA to Citigroup has resulted in a government decision to tighten the regulations. See the DCA sale page for an update and copies of correspondence.
Coming to grips with corporate care now adresses the impact of private equity. Links to more documents have been added.
In the US section HealthSouth's web pages have been updated and several new pages added as its scandal has unfolded. HCA has a revealing update page describing its respons to economic pressure during the years 2004 to 2007. There is a brief reference to the impact of the private equity phenomenon on aged care.
In the Australian section the issues surrounding the sale of DCA to Citigroup have been updated as issues have arisen. Another page adresses the issues surrounding the October 2007 sale of these same nursing homes to the UK insurer BUPA. A page analysing BUPA has been added. Material has been added relating to the recent acquisition of large numbers of nursing homes by private equity. Other aged care pages have been updated including recent information about the Belvedere Park nursing home in Victoria and about two homes owned by Bresant in South Australia.
A new section has been added examining renal dialysis (artificial kidney) companies in the USA and Australia showing how companies with a record of fraud settlements were welcomed into Australia. The regulatory deficiencies around "approved provider status" for aged care operators in Australia have been pursued with government and the additions to the BUPA approval page document the lack of outcome.
The section on private equity investment in aged care has been expanded with separate expanded pages for Macquarie Bank's Retirement Care Australia and for MFS and its subsidiary Domain Aged Care. A study of these two groups reveals further pointers to problems in the private equity model. These suggest that, as in the USA, private equity is having adverse consequences for the system and for care.
In 2007 to 2008 there was renewed interest in the corporatisation of General Practice Healthcare, with Healthscope entering the sector and with Primary Healthcare expanding rapidly with a adventurous takeover of the larger Symbion Health. At the same time Richard Scrushy was finally found guilty of masterminding the Healthsouth fraud in the USA.
Some adjustments have been made to the General Practice Corporatisation web page, including an extra page on Primary Health Care. Some adjustments have also neem made to the Healthsouth pages.