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 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. Any comments made are based on the belief that there is some substance at least to so many allegations.

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This was the senate review of the aged care amendment bill 2008. I felt it fell well short of what was required and made a submission. I lodged a test case afterwards.

 Australian section   

Aged Care Amendment (2008 Measures No. 2) Bill 2008 [Provisions]  

The Senate Standing Committee on Community Affairs

November 2008



In 1997 probity provisions for aged care providers had been replaced with a corporate friendly approved provider process which took no account of ownership and allowed unsuitable purchasers to become approved providers simply by buying a nursing home. I had been writing about this and challenging it since 1999. The information supplied by the minister suggested that the bill would go some way towards this. My reading of the information was that the bill would not go nearly far enough. I made a submission in which I welcomed the bill as the first small step but made the point that it was much too limited and gave examples.


I suggested that it be structured to accommodate future changes and made some suggestion as to what they might be including changes to the complaints system and accreditation process by moving them locally and by making the processes transparent to the local community


The bill was passed. I later lodged a test case complaint to see how far the legislation had changed. The department did not have the power to deal with it.


To see the full report go to the following web page





Since 1999 I had been pestering government agencies and politicians about the 1997 abolition of probity provisions and probity reviews of aged care providers. They had been replaced by an approved provider process which in my view did not protect the sector from unsuitable predatory corporations.


Citigroup had a dreadful track record for exploiting the vulnerable and for involvement with companies that indulged in fraud including several fraud prone examples in the health care sector (eg HealthSouth). I had objected to a Citigroup private equity subsidiary being given licences for hospitals in NSW on probity grounds. The NSW health department had delayed granting these licenses for 18 months while they investigated, by which time the group were selling. NSW then granted them licences with restraining conditions.


When the same Citigroup subsidiary purchased DCA, Australia's largest nursing home company, I lodged objections to their being granted "approved provider status". The department were forced to admit that Citigroup did not have to apply for approved provider status. Approved provider status was a commodity tied to the nursing homes and a new owner simply acquired approval by purchasing a nursing home. It was a commercial commodity bought and sold, adding value to the nursing homes. Instead of discouraging unsuitable providers the 1997 "reforms" were encouraging them by creating a massive loophole.


I took these issues up circulating this information to politicians and multiple groups with an interest in the sector. The Hon Tony Abbott (Health Minister) and Hon Christopher Pyne (Aged Care Minister) eventually responded promising to do something. They procrastinated and eventually lost power without acting in 2007.


The then labour shadow minister for aged care did not respond to a request for a pre-election undertaking. After the coalition government lost power, the new aged care minister was lobbied but refused to give an undertaking.


Legislation of a sort did arrive in November 2008 and the Standing Committee on Community Affairs was asked to examine the proposed legislation. I found the legislation complex and it was far from clear that it would accomplish what the minister claimed it would or what I was looking for. I felt that approved provider status would remain a valuable tradable commodity, that activities outside the nursing home sector would not be considered and that approved provider status would not be revoked however heinous a company's conduct was if that conduct had not occurred in nursing homes.


I made a submission and included specific instances where I did not think that the legislation would provide protection. The Aged Care Amendment Bill was passed in December 2008.



Submission to the Senate Community Affairs Committee (J M Wynne)

Re: Aged Care Amendment (2008 Measures No. 2) Bill 2008

9 November, 2008

1 Summary

This submission welcomes the proposed bill and the important change in direction proposed. It takes issue with the explanations offered by the minister particularly the historical account. A failure to properly understand what has happened and why real change is needed can leave this bill isolated, and in purposeless limbo. We will not build on its potential. It is not clear from the explanation where this first small but important step is headed. 


To understand what has happened and how we can fix aged care we need to clearly understand what has happened, where we have gone wrong, how bad the situation is and the personal and social processes that have made it so bad.


There are many obvious and readily identified matters impacting on care. While these are the focus of discontent, complaints and submissions, they are not unique to aged care. They do not adequately explain the malaise in the system, or the widening polarisation and differences in perspective between the different groups interested in the sector.


My assessment is that there are key underlying problems in the way the service is structured. While these are more complex and not always easy to understand, they are critical. If we do not confront them we will do no more than once again patch the system and get a temporary reprieve.

In this submission I have:

1. Given a very different and I feel more accurate account of the developments in aged care since 1997. We can not go forward unless we properly understand where we have come from. The minister's explanation may placate the providers but it is not accurate. One cannot base action on it.

2. Summarised a series of concepts that explain what the core underlying problem is and what we must try to do to correct it.

3. Made a more realistic assessment of where we are today and the possibility of moving to something better without disrupting the system we have and harming residents.

4. Looked at the changes proposed to the approved provider process and at what they might accomplish. My impression is that the bill falls short of the promises suggested in the minister's press release.

5. Illustrated some of the difficulties and the approved provider issues that should be addressed using actual Australian examples. If my reading of the explanation is correct, the bill falls well short of what is required.

6. Expressed concern at the failure to properly address the un-sustainability and recurrent failures in accreditation, and in resolving complaints.

7. Noted the failure to deliver on the governments promise of real transparency and the need to address this in the future

8. Expressed disappointment at the failure to adequately address the critical problem of adequate staffing ratios

This bill is potentially an important first step in addressing the major paradigm conflicts that sap the system and undermine it. I was not persuaded that it did so adequately. It will not do so on its own. I have suggested changes that will build on this first step and which I feel might work. The bill should point the way to innovative changes like those I suggest. These include:


1. Introducing real transparency to the system.

2. Greater involvement and influence by the medical and nursing professions.

3. Major changes in the accreditation process moving it close to the nursing homes.

4. Involving the local community directly in ongoing oversight, accreditation, complaints resolution and other matters in the nursing homes so making the homes accountable to them

Because of the breadth of the issues and the complexity of some of them I have been prescriptive and dictatorial in writing this. The issues are explored in greater depth on the web page links I have supplied.


The bill is long and complex and I do not have the skills to properly assess and suggest detailed changes. This submission therefore supports the Bill (Option B) but addresses key matters that I feel need to be expressed through the legislation. I could find no reference to many of them in the explanation. Some of the changes that I believe are desirable have not been included in this bill. I believe the bill should be designed to accommodate their subsequent inclusion, as well as some suggested innovative changes should further research validate their efficacy.


My gut impression is that the Bill still protects the interests of the providers more than the residents. I note that the providers (called stakeholders) were extensively consulted and get the impression that changes could not be made without their approval. There is no reference to discussion with critical community groups.   Having watched the US and Australian systems over the years it concerns me that the increasing dependence on the marketplace has given these operators so much leverage over policy that little can be done without their approval - however eager the minister is to make changes. This is not the first time this has happened in either country.



5.6 Summary (in regard to the Approved Provider process)

There are issues in this bill regarding the adequate assessment of personal and corporate owners and operators. There are also issues about what will be assessed and what domains of business activity and public statements inside and outside the aged care sector will be relevant. The legislation seems to restrict the freedom of the department to assess the totality of an entity's suitability, and if so then it is protecting the providers and not the residents.


The issues are complex and a thorough investigation of every applicant's suitability would be daunting and onerous. Success is likely to depend on interest in the community and the willingness of community groups to research applicants and supply information. The new bill does not facilitate or encourage this process.


Final Paragraph re accreditation and complaints systems

What I am suggesting is that a combination of real transparency, and the direct involvement of the community in the way nursing homes operate would go a long way to entrenching the community paradigm and in reversing the polarising of positions between politicians, providers, government agencies, nurses and community. We all need to work together towards a common goal moving carefully and systematically. To do so we need to be sure we all have the same objectives and at the moment this is not so.


Its not going to be easy to persuade Macquarie bank that serving the community, by ensuring the well being and quality of life of the frail elderly, far outweighs the importance of their profits and bonuses. Finding common ground on which to build and from which to move forward will not be easy. Shareholders need to understand that investing in health and ageing is a service to their community, and that they can expect a reasonable return for their efforts, but this is not where they come to make a killing. Analysts need to become socially responsible and temper their enthusiasm for vast profits by applauding those who provide worthwhile community services and encourage investors to support them.


CLICK HERE to read the full submission.

Aged Care Amendment (2008 Measures No. 2) Bill 2008 [Provisions]

Senate Standing Committee on Community Affairs

November 2008

The Report


Labor was in power and also held a majority in the senate. The committee received 16 submissions and held one public hearing in Canberra.



1.70 The committee believes that, as the aged care services sector grows and evolves, this legislation is a valuable step to ensure that legislation and regulation designed to protect residents will keep pace with that evolution.


Recommendation 1 1.72 The committee recommends that the bill be passed.

In their additional report the Coalition members raised a number of issues and concerns but supported the bill.


The legislation is now about 1,000 pages long with more than a dozen subsets of regulations. It is now an extraordinarily complex regulatory environment that directors of nursing, managers and CEOs are expected to understand, and this complexity is further exacerbated by the unknown content of guidelines and regulations.


The Greens also had some concerns about the legislation. They expressed concern at the limited nature of the proposals.


These amendments seek to improve standards and compliance in aged care under the current model. Many submissions raised the need for broader reform in the aged care sector to address the long term sustainability issues of the sector. This is also reflected in recent report by the Productivity Commission1 and the Grant Thornton Survey. The Greens look forward to the inquiry by the Standing Committee of Finance and Public Administration into the aged care sector.


To see the full report go to the following web page




Testing the legislation


After the legislation passed I lodging a test case, an objection to a company already operating in which there had been adverse press reports about conduct in every sector in which it operated and where other reports described inappropriate behaviour by its owner. The reply indicated that the department did not have the powers needed to investigate,


I responded on 30 April 2009 with a letter, to the department, questioning the utility of the changes to the approved provider legislation. I copied it to the minister.


I referred specifically to the legislation's failure to consider the important issue of corporate culture in generating and maintaining dysfunctional practices, and to the restraint it placed on the departments ability to address issues of probity arising from an operators other activities.


I commented on the lack of information and the failure of the legislation to address this.


Click Here to go back to the main report page


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This page created June 2010 by Michael Wynne