14 August 2000
Mr A Hinton
Foreign Investment and Review Board (FIRB)
The Treasury Building
Dear Mr Hinton,
Andrew Turner may buy much of Alpha Healthcare
Further to my letter to you dated 6 March 2000 in regard to the possibility that Andrew Turner planned to leave Sun and reform his empire by buying Sun's international operations. Turner has now resigned from Sun but has retained the right to continue in health care.
Sun Healthcare confirms that it is selling its international operations and that the remainder of the company will now be owned by Sun's creditors. This was predicted and I advised you of this in March.
Although Andrew Turner and Sun will not confirm it, there is now a very strong belief in the USA, reflected in several articles that Turner plans to use his very considerable financial reserves to persuade another group to join with him in buying Sun's international operations. As I understand it these are all in financial disarray and even the UK operations are losing money.
These rumours are so strong that I don't think that we should doubt that this is what he plans. Whether anyone will join him is another matter as his reputation in the USA is in tatters. The local newspapers in his home state acknowledge this and have written excellent articles analysing the failures in his character. He was very angry!
Examination of Sun's track record reveals the disturbing nature of Turner's character and particularly his lack of financial probity and responsibility. His charisma as well as his ability to persuade and to convince our politicians should not be underestimated.
The information I had in March was that Turner was planning to form a company called Intrepid Healthcare. The press reports suggest that the vehicle for his purchase of Sun's international operations will be Ballantrae Healthcare LLC in Atlanta.
The US health care marketplace is in a chaotic state largely as a result of the greed and inappropriate behaviour of the market listed chains. Extensive reviews now document the extent to which these chains have compromised patient care not only in nursing homes but also in general hospitals and in managed care.
In order to assist you I enclose a CD disk which contains the following files.
1. The text of an email outlining recent developments in health care.
2. An analysis of Sun Healthcare and Turner in order to show how the corporate marketplace operates. They are good examples of corporate health care thinking and behaviour. This draws on recent and early press reports describing interviews, corporate policies and other matters.
3. A summary and criticism of 140 recent articles from the USA, Australia and Canada. The US system is chaotic and in crisis largely as a consequence of corporate misconduct and dysfunction. Yet despite this Canada and Australia are pursuing closely related policies and practices.
4. Most of the original articles used in these analyses.
I sincerely trust that the FIRB process will perform better than it has in the past (eg Sun Healthcare) - that you will firmly show any company linked with Turner the door, and that you will view any US group with intense scepticism.
Appendix -- Key points
QUOTE --- editorial by G Schiff (J Gen Int Med Apr 2000)
"Something is wrong in our nation's hospitals. While we are fatally injuring more people than are killed by automobiles and firearms, at a cost that is as large as caring for people with HIV/AIDS, hospital managers and even medical staffs appear more preoccupied with survival in the marketplace than the survival of their patients."
12 MAIN POINTS
1. Dramatic new investigations across the USA show that for profit hospitals are not only more expensive but provide inferior care. A new Federal investigation identifies understaffing as the major problem. For profit hospitals are shown to be understaffed when compared with not for profit hospitals. New investigations show the situation in nursing homes is far worse. This reinforces the Australian experience of profit driven nursing homes
2. The primary problem is shown to be the diversion of human and financial resources from the care of patients to the business of the market - ie care of the corporation. This is what Ron Williams predicted in his book "Remission Impossible" in 1992.
3. Almost every sector of the corporate marketplace is in serious financial trouble with actual or threatened bankruptcies, is facing or has faced major fraud investigations, and is being pursued through the courts by a vengeful and angry community. Market theory may be working itself out but at enormous financial and human cost.
4. The largest and previously most financially successful corporate chains are most at fault in all areas of concern. They are the subject of the community's anger.
5. In contrast the not for profit groups and the much larger number of "Mom and Pop" nursing homes which have simply got on with the business of looking after citizens who needed care, using the resources available to them have remained viable. They have not peppered the pages of newspapers with gruesome stories of misused humanity and financial failure.
6. New investigations show how severely oversight has failed and suggest that bribery and close relationships between health care businessmen and politicians are closely linked to this. This must make us ask questions about the close relations developing between corporations and politicians - and about the failures in aged care.
7. It is now clear that nursing homes were outside the restrictive DRG capitation system which operated in acute hospitals and could charge fee for service. This and not the claimed lower costs or improved patient care is what actually fuelled the boom in post acute and subacute care in the USA. As in the specialty hospitals in 1988-91 vast quantities of therapy was given, medicare was defrauded, staffing was cut and care compromised. Corporate chains rorted the system at the expense of the welfare of citizens.
8. In Australia Mayne Nickless has appointed an aggressive new CEO with a reputation for cutting the fat. Revesco, a new company is embarking on an acquisitive policy not dissimilar to the failed US chains - even promoting the same corporate version of integrated care which so successfully manipulated patients for profit. The parallels are easy to draw.
9 Revesco and other groups have set out to corporatise general practice in order to generate a network of referring centres for the pathology, radiology and ancillary medical service empires they are building. The motive is profit and profit only.
10. Sun Healthcare the dominant owner of Alpha Healthcare is selling its international operations.
11. Sun Healthcare's Andrew Turner has now been forced to resign from Sun Healthcare. He does not intend to retire from health care. There is a very strong belief in the USA that he will use his considerable financial reserves to join with others to buy and then run Sun's international operations. (My assessment is that there are few other buyers) We will get the full benefit of his disturbing operational skills in Australia.
12. Both Canadian and Australian governments seem to be deliberately running down their medicare and public hospital systems, promoting more expensive corporate care. Canadian citizens suspect a conspiracy. Could this have anything to do with commitments made by both governments to the WTO?