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I had written to Queensland Health Department on multiple occasions and had been pressing them about the short lists for contracts to build several colocated private hospitals in Queensland. Mayne Nickless was bidding strongly and seemed confident that it would secure the contracts. The local newspaper and the minister seemed to be supporting them. I supplied documents for the asessment committees and argued that the contracts should go to the not for pofit groups who already supplied most of the private hospital care in Brisbane. I was asked to meet the department and in accepting I made a number of points. The majority of the contracts were eventually awarded to not for profit groups.

1 February 1998

Dr xxxxxxxx

Chief Health Officer
PO Box 48
QLD 4001

Dear Dr xxxxxxxx

Thank you for your letter dated 22 Jan 1998. I would certainly be very willing to discuss some of the issues surrounding corporatisation of health care. I will phone Ms Jensen shortly.

Points arising from your letter:- A few points are worth making in regard to your letter before any meeting.

Integrity and applicants for private hospitals:- The first relates to HCoA and your comments about the criteria used as addressing the integrity of the applicant. An important consideration would be the semantic issue of the word integrity. I do not believe that members of the community would consider that available information about Mayne Nickless is compatible with the term integrity as it is commonly used. There can be no basis for the claim by Mayne Nickless that HCoA is a separate company. Its own statements indicate quite clearly that it is selling most of its transport and other businesses to expand into health care. It is offering its senior staff in the health care chain of command incentives linked to profits. Not only does it involve itself directly in this subsidiary but it sees HCoA as the major source of future profits - its major activity.

Mayne Nickless/HCoA as a representative:- The same criticisms applies to the selection of Mayne Nickless/HCoA as a representative to assist in reviewing hospital legislation. In a civilised society one does not select members of the Mafia to sit on a committee to advise on the prevention of protection rackets. Unless of course the particular person selected had genuinely admitted to their misdemeanours, showed real insight and was now clearly an exemplary member of the community in action and deed. Mayne Nickless' behaviour fails on all of these criteria. If the Australian private hospital system is so bereft of suitable ethical representatives then there can be no place for such providers in health care. In addition to this Mayne Nickless has shown the same ability as the US giants to misuse language in order to create a false reality in which their conduct is seen to be acceptable. In health care this is particularly dangerous.

Stakeholders:- The third point is also a semantic one and that is the use of the word "stakeholder". This represents a corporate management perspective which should be strongly challenged. Stakeholders are by definition people who are there to represent their particular stake in the system. As such they have a conflict of interest. Using this term makes it legitimate for them to actively pursue the interests of their members rather than the good of the community. It is not that knowledgeable people from different sectors should not be asked to contribute their expertise in developing solutions to our problems, but that they should be selected on the basis of their ability to distance themselves from their particular interests for the common good. A participant who has already misused and abused the trust of the community by making illegal confidential arrangements for personal gain would hardly qualify.

When negotiating business agreements in a marketplace there may be a place for interested groups to negotiate their particular stake in the commercial enterprise. Government bodies acting on behalf of citizens have a commitment to uphold democratic processes and act for the common good. This is only one example of the inappropriate subjugation of the civil processes of government and society to undemocratic structures imported from the corporate marketplace.

Mayne Nickless and the fraudulent US giants:- The final issue in regard to Mayne Nickless is the similarity of its corporate practices and policies to those of the dysfunctional corporate giants Columbia/HCA, Tenet/NME and Sun Healthcare. There is the same emphasis on profit and on expansion -- the same intention to introduce incentives and profit making integrated practices in order to further these objectives. Most disturbing was the way in which it developed patterns of thought to justify its criminal practices and cause staff to perceive them as desirable. An analysis of the conduct of Columbia/HCA, Tenet/NME and Sun Healthcare reveals these same closed minded tendencies. Press reports and public statements do not suggest that it has learned to look at its conduct from the point of view of the ordinary members of the society in which it operates.

Economic irrationalism:- The last point is the persistence in the belief, implicit in your letter that managed care corporations and corporate providers of care can both make the profits expected by their shareholders, and indulge in aggressive advertising and other costly corporate practices without severely compromising care by cutting expensive services. To claim that this is efficient medical care is illogical.

In regard to all of these inconsistencies I would suggest that decisions are being made in the context of patterns of ideas which have become a substitute for the reality of social responsibility and clinical care. As a consequence process has become more important than content, form rather than substance. The victims are evidence and common sense. You are employed to represent the people of Queensland and if you were to step back from your "expertise" and apply the acid test of seeing the decisions through their eyes using their value systems and their sense of appropriateness you would see Mayne Nickless and corporate medicine very differently. The evidence is there for those who are able to distance themselves from corporate preconceptions. John Ralston Saul has addressed and elegantly argued some of these issues.

A proposed meeting:- In regard to the proposed meeting to discuss the issues I supply the following list of matters which are of particular concern to me. Some of these relate to the conduct of the federal government in Canberra. While there is little you can do about them, they are nevertheless relevant as state licensing bodies and state citizens will have to cope with the consequences. This is particularly so in the case of Sun Healthcare which already has a controlling interest in facilities in Queensland and which will want to expand its holding in Australia.

1. The background provided by the unfolding saga of fraud, deceit and poor care in the corporate medicine marketplace in the USA - particularly Columbia/HCA and Tenet/NME which both would have succeeded in dominating our fragile health system had we not discredited them by exposing their US practices. Note particularly
a. the evidence that such practices are inherent in a corporate health care marketplace - a marketplace where success is dependent on profits for shareholders, rather than service provided - a market where money first priorities are legitimised to the extent that financial incentives linked to profit are considered legitimate.

b. the evidence that money required for care competes directly with profit for the available dollar. Cutting the quality of services increases profits. Control of market segments and patient vulnerability effectively eliminates competition for services.

c. the mounting evidence that such an environment favours aggressive one eyed individuals who have the capacity to ignore side issues such as care and ethics. These people who can perhaps be characterised as "successful sociopaths" are enormously successful. Those who have a humanitarian mission succumb.

d. the logic of a system in which 20-50% of the money paid for care is funnelled off as incentives, commercial activities (eg marketing), shareholders profits, and Pacman expansion is strange! It is not available to care for patients. To support such practices on the basis of "efficiency" is a feature of the disconnection of modern corporate language from reality. I first encountered this chasm between language and reality with NME and called it "NMEspeak". The most disturbing feature is that economists, businessmen and politicians really think in this language.

e. the enormous costs of regulation, accreditation, policing and the prosecution of offenders -- as well as the relative ineffectiveness of such measures, particularly when it comes to the care actually provided to patients. Accreditation and regulatory inspections have failed. No real attempt has been made to address this thorny issue in the USA.

f. the logic of using the profit motive and competition to drive an activity which depends on the motivation and empathy of fellow humans, on mutual trust and on cooperative effort. Personal profit ambitions and the corporate responsibility to shareholders rather than patients destroy all of this.

g. the evidence that our government and particularly the minister for health are determined to turn the Australian health care system into a similar profit driven corporate system. The logic of adopting a system which has been extensively tried elsewhere and which has failed abysmally escapes me. As Kuttner states ideology trumps evidence and common sense every time. As Ralston John Saul indicates a language has been developed to avoid confronting the evidence.

2. The similarity in the general conduct of Mayne Nickless and Alpha Healthcare, when compared with US corporate money making practices. Note that Sun Healthcare has lent Alpha $10 million to expand its "integrated services".

3. That our minister for health is passing legislation specially to permit Mayne Nickless to form confidential financial arrangements with doctors. The last time it made confidential arrangements it used them to defraud its customers and paid a $7.7 million fine. It refused to acknowledge its practices and failed to apologise. In 1996 it was once again convicted for not providing the service it claimed to provide - further evidence of its unwillingness to operate within the value systems of society.

4. That Sun Healthcare was permitted to enter our health care system even though it was being investigated for fraud, had allegedly shown a lack of integrity in dealing with shareholders and had apparently been less than frank in its dealings with FIRB.

5. That an objection by the NSW government was ignored in making the decision. Most of the facilities being purchased are in NSW.

6. The emphasis by FIRB that the decision was made by the deputy treasurer. Does this suggest that their advice was ignored?

7. The remarkable way in which the federal minister and his department distanced themselves from the decision to bring Sun into Australia. They denied any responsibility on the basis that hospitals were licensed by states. They ignored the licensing of pathology laboratories by the Health Insurance Commission. Alpha owns two pathology businesses. I do not know whether Sun bought control of nursing homes or hospitals from Moran Health Care group but suspect the former as Sun is primarily a nursing home company. Nursing Homes are licensed by the minister's department of Health and Family Services. FIRB rapidly approved Suns application to purchase the Moran facilities. There are no documents to indicate that it made inquiries from Health and Family Services. Can we believe that the minister was not aware of Sun's plans to buy Moran facilities? I believe that most Australians consider the control and prosecution of health care fraud to fall within the ministers domain. We would expect him to take an immediate and very close interest in a company which is being investigated for fraud.

8. Whether Sun's entry is part of a long term hidden government plan to corporatise our health system? Note the way in which an aged care marketplace was set up during the period when Sun was negotiating its entry into Australia, and our minister's recent announcement of his plan to revolutionise health care by building "subacute" step down hospitals. Both are Sun specialties. In short was the decision to admit Sun made because of the governments hidden plans even though it was clearly an unsuitable organisation?

9. Whether the decision to allow Sun into Australia in spite of the objection of NSW would have been made by the deputy treasurer without consulting with cabinet and whether the minister can legitimately claim that he had no input into the decision.

10. Whether, in the light of the information in FIRB's possession regarding corporate medicine in the USA, and Sun's corporate behaviour the claim that Sun was allowed into Australia because it "did not raise issues of sufficient concern that would warrant its rejection as being considered contrary to the national interest" is sustainable?

11. The similarity between the statement's made by Richard Turner and the minister's policies.

12. The potential for a corporate giant such as Sun to dominate and control our small health care system. It could then impose patterns of care in the interests of its shareholders rather than Australian patients.

13. The extent to which the medical profession's ability to act in their patient's best interests has been curtailed by corporate profit priorities in the USA. What is the potential for Sun/Alpha/Moran and Mayne Nickless to do the same in Australia.

13. Whether the term "health care reform" as used by international health care consultants acting for corporate America has anything to do with providing care, or whether the primary purpose of such reform is to puff up executive incentive bonuses and increase profits for shareholders. How vulnerable are our politicians to the strategies described in the Modern Healthcare articles which I sent you? In short is our health care policy being made in Canberra or in the board rooms of New Mexico -- as was predicted by Ron Williams in 1992.

14. Whether the patterns of thought and corporate conduct displayed by US corporations and particularly by Sun are appropriate for health care. The extent to which these same patterns of thought are reflected in Australian health care companies.

15. The threat that more US corporations will descend on Australia.

16. Whether a corporate health care marketplace is the right environment for the rationing of medical care. See editorial by Peter Baume -- Med J. of Australia 12 Jan 1998 page 52

17. The reliance placed on regulation, inspection, policing and contracts by our regulators and our politicians. Such practices pay attention to form and process, rather than substance and motivation. In a world disconnected from reality by language such processes become substitutes for real care.

I enclose some more reports.

Kaiser:- The first documents the dispute between Kaiser and nurses. Note that the dispute is about staffing and not money. This dispute must be seen against the denial of care documented by the Texas department of insurance, the closure of understaffed and dangerously substandard hospitals in Texas and the manipulation of a supposedly independent arbitration process by Kaiser. It is important to understand that in the corporate world and within the language of corporate health care, the concerns are about bad publicity and its impact on corporate profits. These are addressed by employing public relations consultants. The actual problems in staffing are talked away by using phrases which make them seem innocuous and part of a legitimate health care business. They will see the nurses as acting out of self interest because their jobs are threatened. Altruism and social responsibility are not part of the corporate language.

Columbia/HCA:- The second is an article which documents Columbia/HCA's interest in settling the investigation against it by paying off the government. Note that the prime concern remains the interest of shareholders and the company. The care provided and the fundamental changes needed are, as always ignored.

The impact of language:- A short Australian article by Dr Peter Arnold addresses the fundamental problem of language. An understanding of the way we misuse words to define situations in ways which eliminate conflict between concepts is critical to understanding why corporate medicine and a primary profit motive have been so destructive of the health system in the USA. Dr Arnold is I have recently learned a South African and has had the same personal experience of the way in which language can be used to define situations in dysfunctional ways.

Yours sincerely,

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