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I responded to the feedback from the Professional Review Division probably too pointedly, returning to the issue of probity and the need to protect patients. I did not get a further response. Alpha had sold its pathology holdings months before but I did not know that they had all been sold.

25 June 1999


General Manager
Professional Review Division
Health Insurance Commission
PO Box 1001
ACT 2900

Dear Mr xxxxxxx,

Sun Healthcare - the corporate marketplace

Thank you for your letter which I read with concern as I believe that your committee is attempting to dodge the issues and its broad responsibilities to Australian citizens.

The surveillance and compliance programs which you espouse in your letter have failed abysmally in the USA. It has been the action of whistle blowers and citizens and not regulatory structures which have exposed both dysfunctional corporate practices and the failure of government regulatory structures. Vast numbers of people have suffered. There is no reason to believe that you will be any more successful and I have no confidence in these measures. They address only the visible manifestations of problems in perspective and morality. You are tackling the problems from the wrong end.

You indicate that the information I have given you is not specific. I do not believe that as a citizen I am required to provide precise evidence, nor do I have the resources to investigate. If there are reasonable concerns that a crime has been committed, that a a crime is likely, that a potentialy dangerous situation exists, or that someone may not qualify for a licence because of a lack of probity then I believe that I should advise the responsible authority, in this instance the HIC. This I have done You have the resources of the state to support you in investigating the problems and taking steps to protect citizens.

Probity and licences:-

As I understand it the HIC licenses pathology services. It is my understanding that until recently all health care licence holders were required to be suitable "persons" and probity conditiond were included in the regulatory requirements. These required licence holders to be "fit and proper" or to be "of good standing". In this we have followed the United Kingdom. These probity provisions have given objective form to society's expectations. These provisions have protected us from the sort of practices which for years have plagued the USA. In the USA there are no probity requirements in the regulations.

Regulation, prosecution and punishment address only the most extreme forms of antisocial behaviour. Surely the reason that licences exist is to ensure that only people qualified and suitable are allowed to provide services in areas where integrity is a prerequisite. Your department has or should have a responsibility to the citizens who pay your salaries - to ensure this. By no stretch of the imagination can Sun Healthcare be called a "fit and proper" person. It has already fallen foul of a probity check in Victoria.

I am well aware that with the dominance of economic rationalist theories and free trade agreements US thinking has dominated in Australia. With the dominance of these new and disturbing paradigms probity provisions have been largely disregarded or loopholes found to circumvent them. No steps were taken in regard to Mayne Nickless despite its recent criminal conviction for running a price fixing racket at the expense of its customers - a very unsavoury citizen. The minister had no difficulty in appointing a senior Mayne Nickless executive as chairman of the HIC. Only a few years ago this would have been unthinkable.

I am also aware that in 1993 stringent probity provisions were applied to nursing home licence holders by the federal government. Since that time the regulations have been revised and these important probity provisions, which protect our health system were omitted. This is a matter of great public concern, yet the public are unaware of it and its significance.

I therefore respectfully ask you to let me have the section of your regulations specifying the probity provisions. Please indicate to me whether probity requirements have been changed or removed during the last 5-10 years.

My concerns about Sun Healthcare directly challenge the HIC's commitment to probity in the provision of health care. This is deliberate. As citizens we are entitled to know where our government stands in protecting us from people like Sun Healthcare, Tenet Healthcare aand Columbia/HCA.

Control of Dysfunctional Practices

As you indicate in your letter the HIC is responsible for controlling fraud and dysfunctional practices. Where a particular type of service (eg. corporate providers) is shown to favour criminal or antisocial behaviour or if a company has a poor track record then as a citizen I would expect you to protect me by intensifying your surveillance and monitoring practices in these areas. I believe that the material I have provided is directly relevant to this.

Advice to government

As part of the federal bureaucracy I understand that the HIC advises government. It would be important to do so when policies are likely to have adverse outcomes for citizens. By any standards the material I have supplied you points to serious problems in the sort of health system which the government has clearly indicated it wants. I believe that the HIC has a responsibility to examine this material and the arguments objectively, then advise government accordingly - even when ministers don't want to hear.

The World Medical Association (WMA) Directive.

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 believe that in this instance the HIC is the responsible authority and that I have done my best to discharge my responsibility. I expect the HIC to take steps to protect Australian citizens from these potential threats.

Further material

In fulfilling my responsibility I enclose further information about Sun Healthcare and about the severely dysfunctional international health care marketplace. In addition to the printed material 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.

Yours sincerely,


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