26 June 1999
Certification and Approval Services
Aged and Community Care
Dear Ms xxxxxxxx,
Aged care licences.
I refer to your letter of 7 May 1999. Unfortunately I have no means of knowing which foreign multinational is applying to you for licences in Australia. During the last few weeks I have received a vast amount of material from the USA, particularly regarding corporate chains providing nursing home and aged care services. These companies are under extreme pressure and will make every effort to expand to countries where the health care pickings are more rewarding.
The matters raised impact on the quality of care, on corporate probity, on management ineptitude, and on financial capacity as many of these companies are threatened with bankruptcy.
You will note particularly that Sun Healthcare is one of the companies threatened with bankruptcy and has fired large numbers of staff from its already understaffed facilities. The nurses have commenced a class action accusing the company of understaffing ruthlessly and of exploiting the humanitarian commitment of staff ruthlessly for corporate advantage. They are alleged to have breached employee legislation in multiple states. The US federal government are so concerned that they have written to all state regulatory agencies asking them to monitor standards of care in Sun Healthcare's facilities particularly closely. Arizona has advised federal authorities that they would not be in a position to protect nursing home residents should Sun and other threatened companies collapse. Patients would die. Federal Senators are debating legislation requiring financially threatened corporations to notify authorities and setting up provisions to protect patients when and if bankruptcy occurs.
I enclose a floppy disk containing two files. The smaller (66 pages) contains comments, summaries and relevant extracts from a large number of articles. The larger (400 pages) is the scratch file containing the full text of all the material. These articles have been sent to me by international contacts over the last few weeks.
Please understand my position.
Australia is a member of the WMA. In October 1993 the WMA issued the following directive:-
Should medical practitioners perceive circumstances which might adversely affect patient health, it is their duty to inform responsible authorities so that remedial action may be taken.
Should responsible authorities decline to take remedial action, reasons for the decision should be made known to the medical practitioners who reported the circumstances. Should such notification not be provided or should the rationale for the decision prove unconvincing, the medical practitioners concerned have a duty to take further actions.
By any standards the corporate "level playing field" which has been created in health care in the USA and which our minister has supported as his model for health care in Australia creates a situation which "might adversely affect patient health". The business practices and track record of Sun Healthcare clearly pose a serious potential threat to patient welfare and this is now recognised at the highest level in the USA.
I am acting within the guidelines of this directive and believe that you are the responsible authority in aged care and nursing homes.