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Quotes and Extracts

the new corporate world of medicine

Comment:- I found myself in possession of vast numbers of documents describing what was happening in corporate medicine. It was impossible for me to copy and circulate them and there was little prospect that so much material would be read. I therefore made a collection of extracts which illuminated the corporate world to accompany my correspondence. This was in late 1997 afer Columbia/HCA had backed away and Sun Healthcare had announced its entry into Australia.

Is this the way ahead for Australia?

These extracts from a large selection of corporate documents, from newspapers books, and witness' statements are intended to give the flavour of corporate culture, of the patterns of thought of health care's corporate leaders and of the debate about corporate health care.


Introductory comment















Pro-market theorist Milton Friedman has admonished corporate officials to shun any "social responsibility other than to make as much money for their shareholders as possible".

But corporate executives are employed by shareholders, not patients. Ultimately the laws of the market demand allegiance to profit over health, and the laws of the land require corporate officers to maximise shareholders returns. Should such organisational imperatives govern health care?

Boyd J W et al , Lancet 8 July 95 page 64


In 1988 administrators in NME (now Tenet) hospitals were instructed to call meetings and instruct staff. The goals for these meetings are set out. One was

"To Clear up misconceptions. Example. We exist as a company to provide a high quality service to our patients (and in some cases society). I have heard individuals within the company make remarks along these lines and it is absolute nonsense. Lets call a spade a spade: We are here for one reason only - to make a profit for the shareholders who put up the money so that we could exist in the first place. "

Corporate documents submitted by W McCabe in court action against Tenet/NME claiming that he was wrongly dismissed for refusing to indulge in illegal conduct. The case was settled out of court.


"The introduction of the commercial enterprise mentality to psychiatric care, the abandonment of ethical, scientific principles by many mental health care providers, and the indulgence of greed have allowed these developments to occur. The provision of mental health care, especially as it relates to the psychiatric hospital industry, has largely changed from what was once a professional and caring environment and an honourable part of the medical world, to one that is based on commercialism and profit. The changes that have developed over the past decade are very pervasive, deeply entrenched, and have occurred across the entire United States" 

Evidence US House of Representatives Inquiry entitled "Profits of Misery" April 1992 Dr Charles Arnold


[Top] - PUBLIC VS PRIVATE FACES (Singing to the choir)

"--- well earned reputation for high quality patient care. ----- We gained that reputation through a quarter of a century of placing the reputation of our patients and physicians above all else."

"It is crucial to note that, our review did not find anything systematic that negatively affected patient care."

"We assure you that those standards are being continuously, monitored at each of our hospitals throughout the world ... and we will not tolerate any practices that do not meet the highest, ethical and legal standards"

Statement by John Bedrosian one of Tenet/NME's founders to the Australian public on ABC television October 1992. In subsequent cross examination in the USA it became apparent that he considered it legitimate to misinform the public, and even government inquiries if it was in the corporate interest. He spoke of "singing to the choir"


" --- essentially all allegations were true."

From Internal Tenet/NME report to current COO Michael Focht in regard to appalling standards of care and staffing in Great Plains hospital in 1991, a time when Tent/NME was making vast profits. Tenet/NME has now paid at least $115 million to compensate patients who suffered as a consequence of its practices. These patients are forbidden from speaking out about their experiences. Tenet/NME has consistently claimed that patients have not suffered as a consequence of the care received and the levels of staffing in its hospitals and that this was excellent.


"This company does not engage in illegal and improper conduct. God help anybody that does."

Statement by John Bedrosian a cofounder of Tenet/NME in 1985 when NME was accused of attempting to bribe politicians to revise a licence decision by donating to party funds.

"---- hospitals must spend a great deal of time and money to attract physicians with big practices in order to ensure a flow of patients. " 

"Helping a physician defray certain costs of doing business can be a powerful carrot to get his patient referrals."

Extracts from stockbrokers reports in 1991 referring to Tenet/NME's policies


An article in the Wall Street Journal (March 1997) refers to the plaudits received by Columbia/HCA from Wall Street for its ability to form beneficial alliances with local doctors.

Mr "A" (senior NME executive in NME's international division) then told me that he could give me a lower price if I could admit more patients into hospital. If I admitted enough I could even be given rent free premises. 

"A" insisted on a guarantee, saying my reduction in price would have to correlate with the number of patients --

"B" (a hospital administrator) has mentioned figure of $50.000 and $100, 000 and also 200 patients a year - -

They made several proposals how the discounted price could be disguised so that it would not look unethical.

They then suggested free or subsidised equipment, free or subsidised rent, and free trips abroad, ostensibly to help them in their medical projects.

"C" (another hospital administrator) then said in "B's" presence that you don't have to worry anything about ethics. He said that all these incentive documents could be signed and kept hidden in a safe where no one could see them.

Doctor's 1993 evidence in a Singapore court. "A" was a director and "B" a Tenet/NME administrator of Tenet/NME's Australian hospitals. The Singapore hospital denied the allegations but none of these persons gave evidence to refute the allegations. Nine months later over half of Tenet/NME's hospitals were listed in a guilty plea to similar practices. The hospital has now been sold to a Singapore company. There is nothing to suggest that it has ever indulged in such practices..

"I was given a detailed explanation of how other psychiatrists had been made rich, and was told that this would be done for me if I would go along with the program."

"Tragically, a large number of psychiatrists, psychologists , ------- , and have - in effect - sold their souls."

"What happened here -- this is what I was asked to do, to sell my MD degree which gives me admitting power to a hospital. Once that's done, the sky is the limit. If you as you said, look the other way, you'll become enormously wealthy and the treatment is taken over by the non-medical people, absolutely non-medical with no medical training at all." 

Evidence US House of Representatives Inquiry entitled "Profits of Misery" April 1992 -- Dr Charles Arnold referring to a tape recording he made of an interview with a Tenet/NME administrator.


"The PIA climate has been, over the years, to put 'heads on beds' at any cost."

"Over the last few years there has been a gradual erosion of the power of the Medical directors so that in many hospitals there was just a facade of clinical care."

"I wonder what is the purpose of having medical committees where the physicians have no authority and cannot make any decision pertaining to ----- hospital."

"If people had questions about the tactics recommended from the top, they were not considered a team player and ultimately pushed aside."

Extracts from letters written by doctors to Tenet/NME corporate executives in 1991.


"Health care is a business like anything else." and "The day has come when somebody has to do in the hospital business what Macdonald's has done in the fast-food business and what Wal-Mart has done in the retailing business,"

Richard Rainwater, co-founder of Columbia/HCA

"Do we have an obligation to provide health care for everybody? Where do we draw the line? Is any fast food restaurant obliged to feed everyone who shows up?"

Richard Scott, cofounder, chairman, CEO and President of Columbia/HCA said

"Add Columbia's growing interest in owning managed care systems, which control health care access, and every piece of the patient for profit puzzle is in place."

"What is a crime is the galloping privatisation of the nation's health resources and the rise of a competitive health care system that has less and less to do with health and access to care and everything to do with money."

Carl Ginsburg The patient as a profit centre: Hospital Inc. Comes to Town. The Nation 18/11/96

The New Mexico Business Journal (Apr 1996) describes Sun Healthcare's chairman as "Andy Turner, the dynamic, Outspoken and sometimes controversial CEO of Sun Healthcare Group Inc." Turner is interviewed and says:

"The government should butt out. If that happened, market forces would quickly resolve the problems in the industry" 

"They (government) should provide services to the truly needy, but they should hire a private company to do it."

"We have an obligation to provide health care for poor people, but it should be managed health care under rules provided by the private sector."

When asked whether health care and business were incompatible. "The quality of health care suffers because of government support and regulation. The system takes away incentives to improve. The marketplace would close poor operators. --- -- - People would shop. They would find out which hospitals really offered the best care, and the ones that didn't would be out of business. We don't think about free enterprise in the health care industry." (This sounds just like Dr Wooldridge.)

When asked whether care had suffered. "No, I really don't think so. There was, and there continues to be tremendous fat in the health care delivery system at a number of levels. We havent even begun to cut the fat."

I think private business will become the primary purveyors of health care services and that the government-run homes are going to be fewer. I don't see much of a future for not for profit homes. I just don't think that the religious orders are going to have the incentive to stay in the health care business that they have today..

Sun Healthcare has purchased a 38% holding in Alpha Healthcare which is now the second largest hospital operator in NSW. Turner is now a director of Alpha. His views mirror those of our health minister and are likely to be influential .

Scott has claimed that "free market, competitive forces should be the driver" to reform the health system . Columbia/HCA disdains a public health mission. "We are not in the health care business. We are in the sick care business."

Richard Scott declared that "Nontaxpaying hospitals shouldn't be in business."

Kuttner states "Columbia/HCA insists that medicine is a business, and increasingly imposes its rules on the competition game."

While Columbia/HCA claims to supply an integrated service, its competitive practices fragment the local system and "everyone suffers, not for the benefit of the patients but for the benefit of Columbia/HCA".

Kuttner indicates that "Columbia's strategy works not just to produce cost economies but also to prevent shopping around and to allow Columbia/HCA to impose conditions that doctors and patients might otherwise resist."

When making overtures to physicians Columbia/HCA is alleged to have pledged that it "will utilize all appropriate resources to ensure the failure of any competing surgery centre in our community."

Kuttner asserts that "A market culture and a market idiom are becoming pervasive, even among nonprofits" and " - - big nonprofits are now defensively emulating Columbia/HCA and other for profits."

Kuttner R- "Columbia/HCA and the resurgence of the for-profit hospital business New Eng J Med 1/8/96 p 362, 8/8/96 p 446


Australia's largest private hospital operator is forecasting rationalisations of the health sector and an influx of foreign investment.

HCoA managing director Barry Catchlove said "Fifteen, 20 years ago it was all little lumps and bumps stuff " ---- "(Now) Australian health system is dependent on the private sector. We represent 30 per cent of beds and are increasingly important"------- "If the private sector fell over, the whole system would collapse" ----- "It's much more of a free market than it ever was. The little players be they insurers .... be they hospitals, are a thing of the past." ----- "Even doctors will have to put themselves in bigger groups so they can negotiate." ---- Referring to foreign investment "There has already been an investment from Malaysia and Singapore. I think this will increase."

Courier Mail 8/9/97 HCoA is Mayne Nickless wholly owned health care subsidiary.. Most of the representative 30% referred to are still community or church run hospitals and are not for prpfit.

"Our priority for investment and growth will be oriented towards health care for the foreseeable short-term future." Mr Dalziel from Mayne Nickless predicting that HCoA (Mayne Nickless' Health subsidiary) would achieve 30% growth

Courier Mail August 1996


"The marketing efforts that I was describing are really the marketing effort followed by every single hospital in just the day to day routine of the telling of that hospital story and capabilities to the community and to the referral community. "

Statement by Norm Zober from NME describing their marketing (1991). Their advertisements which frequently targeted children and their normal development problems served to fan anxieties and create a false market which they then exploited. The practice of advertising to create a need for new products is normal in the business world. Another example follows

"The division also provides literature on a variety of mental health disorders, authored by physicians and counsellors at the facilities, through the PIA Press, whose 40-plus books are gaining national recognition as an information source on emotional problems and their treatment."

Books were advertised by NME to hospitals under the title "books as hooks" claiming that they were a proven way to increase a hospital's census. The morality of fanning the public's anxieties in search of admissions is revealing but Friedman has advised against social responsibility!


"The company has by far the highest occupancy rate in the business. Its programmed approach to psychiatric care has proven very successful. - - - - - - - - - - - Revenues per patient day will continue to experience double-digit growth, and capacity is likely to continue to expand by at least 10%."

Stockbroker's reports NME 1991

Profits per patient per day were critical and NME developed strategies for maximising profits from each patient, without regard to their medical needs. This was business not medicine.

Stockbrokers understood that the financial success of the business depended on securing admissions and providing services. Doctors controlled admissions and the treatment given. NME strategies for attracting doctors with large practices were highly regarded. It spent large sums of money to purchase the latest equipment which would attract doctors.

"It's called 'Books as Hooks" and PIA Press is the creator of this dynamic new referral development/promotion strategy"

From NME advertisement, promoting the books it published.. This illustrates corporate thought processes.

"There was a tremendous amount of pressure put on everybody within the PIA (Subsidiary of Tenet/NME) network that we had to meet or exceed our budgets. There was no question in anybody's mind about that 

"All of the marketing and referral network policies and procedures came from a corporate level."

"The success or failure of the referral system was more important than the success or failure of the treatment of the patients"

Extracts from Evidence US House of Representatives Inquiry entitled "Profits of Misery" April 1992 Mr Russ Durrett - Tenet/NME hospital administrator.

"We've got people out there --- and we're going to hire another one in marketing that does nothing but beat the bushes and finds the patients and sends them to the hospital" 

Tape recording of meeting with Tenet/NME administrator by Dr Arnold. Evidence US House of Representatives Inquiry entitled "Profits of Misery" April 1992

" --- --- social workers, school counsellors, probation officers, crisis hot line workers and even ministers were paid to refer paying patients to private psychiatric hospitals. These are the people in our communities we have all been taught to trust -- not avoid"

Senator Mike Moncrief, chairman of a Texas senate inquiry in 1991. Evidence US House of Representatives Inquiry entitled "Profits of Misery" April 1992. I discovered that my financial adviser pays 30% of my fee to the accountant who referred me to him. In business this is considered a legitimate practice and if medicine is to be a business, and decisions are made withing a marketoplace world then such practices become legitimate.

"--- I want them to be able to sell the benefits of the free evaluation ------- regularly review and discuss each others' conversion rates ---- to be sure that they don't have professional/personal issues or biases that can impede their intake performance."

Internal Tenet/NME corporate document setting out "golden rules" for administrators in charge of untrained staff doing evaluations. The staff were rewarded on their "conversion rate" converting free evaluations to admissions. By using the words and practices of business terminology to create a new medical world, humanitarian and ethical principles could be denigrated and abhorrent practices became legitimate.



"In psychiatry and rehabilitation, NME's businesses are major factors that have achieved leading clinical positions in their respective specialties."

"NME is unique in that it is among the premier providers in each segment in which it participates."

Stockbroker's reports NME 1991 . Financial success was automatically equated with high quality care - using the form of words rather than their substance - a feature of what I called "NMEspeak". NME did just this. Internal financial assessments identified financially successful "quality products" which by association with the word "quality" became "quality medical care". The corporate faithful including the doctors swallowed this without blinking an eye.

"I concur with your assessment of the current associate administrator; that he is too clinical and not a decision maker. Please proceed with his 'resignation'."

"I concur with your decisive action with regard to the 'back door problem:' "

Corporate documents submitted by W McCabe in court action against Tenet/NME claiming that he was wrongly dismissed for refusing to indulge in illegal conduct. The case was settled out of court. The back door problem was when clinicians discharged patients when the administrator was off duty.. After all if you had paid for medical insurance then you were entitled to the full benefits of your insurance. Clinicians should not discharge you prematurely.

"- - society thinks of the medical system not in terms of keeping patients well or helping them get better but instead as a fiercely competitive business in which survivors concentrate on making tremendous amounts of money." ----------- "The goal isn't health care any more - the goal has become the care of the stockholder interest."

"the for-profit chains have the minds of piranha fish and the hearts of Doberman pinschers."

Columbia/HCA was "the PACMAN of the industry.

Representative Fortney Pete Stark Congressional Record 6/1/97 -- 13/2/97 and 10/9/97 Fortney Pete Stark speaks to legislation to contain for profit hospitals, particularly Columbia/HCA and also to ensure that accreditation bodies such as JCAHO are no longer subject to control by corporations.

"The success or failure of the referral system was more important than the success or failure of the treatment of the patients" 

Russell Durrett (administrator) US House of Representatives Inquiry - Profits of Misery

"Several administrators and controllers were fired because they did not meet the financial goals. No one that I can recall was ever fired over a patient care issue. There were no measurements nor did we ever attempt to track patient care of the result of our treatments."

Evidence US House of Representatives Inquiry entitled "Profits of Misery" April 1992 Mr Russ Durrett past administrator of Tenet/NME hospital

"The division's facilities feature a programmatic model of care, whereby each patient enters a program dedicated to his or her particular diagnosis and receives specialized treatment; there are currently 70 such programs under way at the division's facilities.

Extracts from stockbrokers reports in 1991 referring to Tenet/NME's policies

In the "programmatic" concept, a medical facility is used by persons with absolutely no medical training to perform activities which are neither medical nor therapy, but the activities are labelled as "therapy" and are billed as such to patients and insurance companies. The programs provided are inappropriate for a medical setting, do not necessitate a hospital facility, and could be inexpensively provided in alternate settings.

Evidence US House of Representatives Inquiry entitled "Profits of Misery" April 1992 Dr Charles Arnold referring to Tenet/NME's programmatic system of care which was introduced into its psychiatric and rehabilitation hospitals (about 75% of its empire) This system of care was extensively praised by stock brokers. Profits were maximised by giving each patient vast amounts of unneeded treatment. each day. If treatment was good for you then clearly more treatment was better for you. If you were insured then you were entitled to this. If anyone questioned these practices they were assured that it was "the American way". Those who persisted were not "teamplayers". They were considered to be "odd balls" and side lined.

To the outsider these arguments seem ludicrous but within the context of the medical world created by NME the arguments made sense - and many doctors became part of this world. They became wealthy when they did so. One can compare this with the world view in Germany in 1939 and the world of apartheid. To the outsider these worlds appear comical and tragic but to those including doctors who were part of this world it became logical and the outsiders simply did not understand. This is why it is so important that the medical profession keep the corporate business world and the market at arms length. It must remain outside the business world

--- the objectives of the case manager are:

Increase the ALOS (Average Length of Stay) of all inpatient admissions

Attend weekly staffing of all patients under concurrent review to maximise LOS (Length of Stay)

Job specification. NME hospital . The program of treatment for each patient extended for the duration of their insurance cover. Discharges before this date were classified as "inappropriate". These employees job was to watch the doctors and prevent this. A typical business response to a business problem!


Dr Linda Peeno giving evidence to a congressional committee described how, instead of being investigated and fired she was rewarded for restricting care for a patient who died as a consequence of her decision. She said "It brought me an improved reputation in my job and contributed to my advancement."

Another San Diego physician stated "Those people are turning a respected profession into an industry".

Doctor lets patient die, is rewarded with raise. The San Diego Union Tribune 19/1/97 The response to the practices described earlier was to use financial pressures to keep patients out of hospital and to reduce their length of stay - managed care. The consequences have been denial of care, and premature and inappropriate discharge.


"They save money by laying off nurses, then hire consultants and bureaucrats to figure out how to avoid unprofitable patients and maximise revenues. For profit hospitals increase costs, decrease care and generate windfall profits." 

1997 investigation reported in New Eng J Med. "Downsizing" is the buzzword in big corporations and medicine is now a business. It must be subjected to the same processes .

"quest for profits is harming the quality of patient care in California."

A Californian doctor is quoted as saying "I cant do the patient advocacy I was able to do six months ago. I can't afford to be de-listed again."

Referring to the heart of the physician patient relationship -- "The tragedy is that this heart is being ripped out by blatant profiteering masked as efficiency."

Many HMOs don't put patients first. The San Diego Union Tribune 23/3/95 article by Masek, a doctor and Cohen, chairman of a consumer advocacy group

A US senator referring to the complexity in regulating health stated " _ _ government agencies trying to protect the public interest are too often 'out-gunned' by corporate interests that can avoid control or scrutiny."

County will ask experts to map health-care plan The San Diego Union Tribune 19/3/97.

An editorial in the Lancet refers to physicians as corporate employees "who are constantly hectored to increase productivity by company efficiency experts. Their clinical judgement is also routinely challenged by company cost-containment departments." ------- "But it is unlikely that a piecemeal approach to the problems of the US health-care system can succeed in creating a market that will provide health care for all." Americans are urged to accept "that one of the fundamental responsibilities of society is to promote and protect the health of all its citizens, rich and poor. Comprehensive health care reform, even if it means government intrusion, would assist a more equitable distribution of health-care resources, an outcome that will never be achieved by the ruthless hand of the market alone."

What Price Cost Control - Editorial in The Lancet 1/2/97



The co-chair of the council set up to sort out the emerging problems consequent on corporate care in San Diego stated "If you incentivize health care you can tip the playing field away from the 600,000 uninsured in San Diego County, a number that's rising in a growing economy. That sends a chill down my spine."

Public asks more voice in fate of health care The San Diego Union Tribune 13/3/97

What they get, though is incentive pay for reaching targets.


In Hewitt's survey, 82% of CEOs have incentive programs this year. In 1995, 54% did. - - - - - - - - - - - Once the bonus is added the chief executive's salary puffs up like a blowfish.


Bonus bonanza. One of the trends in compensation is for incentives to reach further down into the hospital management ranks.

Modern Healthcare 8/7/96 page 33 --- Riding High - - Hospital CEO pay has surged as bonus plans proliferate


A company offering "full mergers with medical staffs" indicated that "It gives us a fully integrated delivery system and puts them on our team." 

"Building integrated systems with hospitals and physicians has so little to do with patients that it is unreal" ----- "The motivation in acquiring physicians is protectionist."

In a bid to control the market Columbia/HCA commenced a court action to prevent a merger of competitors. The merging group claimed that Columbia/HCA were "recruiting like crazy to get our doctors. Columbia's sole goal is to divide and conquer and protect their company profits."

Checkmate: Docs are pawns in game of creating integrated systems. Mod Healthcare 3/3/97 p74

While Columbia/HCA claims to supply an integrated service, its competitive practices fragment the local system and "everyone suffers, not for the benefit of the patients but for the benefit of Columbia/HCA".

Kuttner R- "Columbia/HCA and the resurgence of the for-profit hospital business New Eng J Med 1/8/96 p 362, 8/8/96 p 446

The company (Mayne Nickless subsidiary HCoA) that set up the country's first privately run public hospital ------has been buying radiology, pathology and general practices in NSW and other states to provide "one stop" health care.

Dr Catchlove is reported as saying "If you go into a travel agent they can arrange everything for you -- hostels, flights insurance, car hire. Its convenient for the customer and efficient for the business. There's no reason why health care cannot be the same"

In its annual report HCoA calls the policy "value added through vertical integration".

From "Next up: one step medical care" Sydney Morning Herald 15/2/97

The editorial states "Restoration of the right of freedom of speech to doctors -- and freedom of information for patients -- will still not restore another right, the freedom, for doctors, from fear of 'deselection' ". The editorial indicates that 83% of US physicians hold some form of managed-care contract. "This gives nearly omnipotent managed-care plans the power to bully individual doctors, who scurry to be included on insurers' lists." 

Manipulated care: gagging doctors, blinding patients. Editorial in The Lancet 5/10/96


An editorial in the Lancet deals with the efforts in the USA to "control the temptations and excesses of managed care" and so address the multiple problems which have arisen. The editorial states that these bills "represent America's characteristic -- and curious, we think -- confidence that enormous, for profit insurance companies beholden to investors and stockholders are primarily concerned with care of patients, and that market forces and competition will, in the end, solve the problem of a health-care system that excludes almost one in six of its own citizens"

"The health-insurance industry is resisting every step, and, with the help of their vast number of lobbyists and a mountain of dollars' worth of strategic campaign contributions, they are gaining ground."

Manipulated care: gagging doctors, blinding patients. Editorial in The Lancet 5/10/96

"health care reform has become the most heavily lobbied, legislative initiative in recent US history. "

"Add to that the tens of millions of dollars in television, radio and newspaper advertising, plus the untold millions of dollars spent in lobbying contracts, polling and grass roots campaigns, and the result is the largest blitz on proposed legislation in the nations history."

"- - at least 97 firms that have been hired over the past 18 months to influence the health care debate."

Inside lobbying for Health Care Reform. Report by The Center for Public Integrity-USA 1994


"In other regions where large, for-profit firms dominate the health-care market, such as the South East and in El Paso, Texas, studies have shown that the corporations increase hospital prices to boost profits."

Rex Dalton - reporter - San Diego Union Tribune - Commenting on the looming dominance of for profit corporations in San Diego

Statements made by not for profit executives who found themselves crushed between the giants Columbia/HCA and Tenet Healthcare (previously NME) reflect their predicament as like being caught between "two 800 pound gorillas" and "I am like a flea between two elephants."

El Paso on health care frontier. The San Diego Union Tribune 21/6/96


Unless restrained and enjoined, Defendant will continue to engage in acts, practices and courses of business as set forth in this complaint or in acts, practices and courses of similar object and purpose.

1994 submission by US Securities and Exchange Commission (SEC) to obtain court injunctions to restrain Tenet/NME.

Successful partnerships require that the parties share certain beliefs; that they hold philosophies, expectations and standards in common. And That's exactly what the word "tenet" conveys. Our new name says that we have strong values and beliefs and that we will seek out others with similar views for the benefit of both.

Among our core beliefs are the importance of integrity, teamwork and innovation. We will put these into practice daily as we provide the full spectrum of quality, cost-efficient services.

Press release 1994 when NME changed its name to Tenet Healthcare to escape its criminal history. Compare with the SEC claim above! The same denial of the obvious characterised all of NME's public statements during the exposure of its practices. (see John Bedrosian's statement to Australians on ABC TV on 20 Oct. 1992.) Who do we believe? This is classical corporate behaviour. When I first encountered NME's documents I called it "NMEspeak". One of the remarkable features of NMEspeak is exaggerated claims in those areas where the company was most at fault. As the language is totally disconnected from reality corporate executives have no difficulty with this. The statements are made so confidently and authoritatively that they are never challenged. In 1992 NSWHealth believed NME in the face of large amounts of contrary evidence in their possession. We find it difficult to accept that corporate executives see no conflict between these statements and the guilty pleas and multimillion dollar fraud settlements they have just signed. We simply think of them as being deliberately dishonest. It is important to understand that this is so only at a superfical and objective level. This subjective denial of reality and of our humanity also characterised the behaviour of the Nazis and of those who supported apartheid. The world view in which these people have invested their lives is more important to them than reality. Facts and common sense cannot be allowed to disrupt it. The psycho-social dynamics of this process are fairly complex, as is the way in which an emphasis on objectivity in the corporate world has destroyed the subjectivity which is the essence of the way we are conscious of reality. Without a valid soundly based subjective world of ideas through which to filter reality, language becomes a substitute reality and those who control this language control our civilisation. The title of John Raulston Sauls criticism of corporatism "The Unconscious Civilization" is very appropriate. I will not argue these issues further here.

"His investigations have been very thorough and the documentation he has provided has been sufficient to convince me that there is a very serious threat to the Australian Hospital system through the introduction of NME as the major shareholder in the private hospital system."

Commenting on the inadequacies of West Australians licence regulating practices and the need to revise regulations:- "The entrance of multinationals into this field has changed this, probably forever, and confronted the department with the challenge of comprehensively assessing an applicant on a number of dimensions, and being able to prevail against a challenge to its assessment."

Western Australian Health Department report 1993 which was ignored by the WA government -- obtained under FOI in 1995

"The truth is appalling. It appears that special branch were covering up for the judge (Yeldham) for its own purposes. We may never know if any of his judgements were tainted by improper influence, but the evidence suggests that he should never have been on the bench, never in a position of public honour and influence." 

Sydney Morning Herald 12 Dec 1996 Justice Yeldham was appointed by the NSW government as the delegate for NSW health department to make the decision about a hospital licence to Tenet/NME/AME in 1993. NSWHealth had indicated their intention not to grant a hospital licence until fully satisfied. They were then found to have a conflict of interest. Yeldham ignored their repeated submissions against granting the licence and did so in September 1993. The ICAC abandoned their 1991 investigation of Yeldham and allowed him to continue to make legal decisions behind closed doors. They have refused to investigate the licence decision he made. I believe that the ICAC have a conflicty of interest but there is no appeal..

"We have never seen such a case of blatant defiance of the law and such a massive ripping off of companies." ----- "People are shocked by the extent of it -- the systematic, high level, widespread way it was done" ---- "the most blatant and extensive market-rigging arrangement the TPC had come across in its 20 year history" ----- "he had not heard one word of apology to their customers from any of them."

Professor Fels, chairman of the Trades Practices Commission after Mayne Nickless $7.7 million guilty plea and acceptance of court imposed injunctions. Note that these misdemeanours occurred in Mayne's trucking business. They claim that their health care operations (HCoA) were run differently.

The press reported that the evidence was "electrifying". Executives spoke of "Orderly marketing is a feature of how we do business in Australia". The fraudulent arrangements were referred to as an "orderly marketing arrangement", "the peace" and "detente".

Sally Jackson The Arrangement - The Australian 7/12/94 reporting witnesses' statements about Mayne Nickless. Once again we have the misuse of language to create a world within which the abhorrent and unacceptable becomes not only acceptable but desirable and sanctioned. As in NME the final rationalisation is that this is the Australian way. However for Mayne to make this claim there would very probably be some link with reality -- in other words similar practices and similar rationalisations are probably more common than we think in Australia. It is not surprising then that executives did not accept the abhorrent nature of their conduct. The responses criticised below by the Financial Review are for real. They genuinely felt indignant and that they had been mistreated. I have some remarkable reports of comments made by Tenet/NME staff which show this same process of denial.

If Mayne Nickless wants to send out the message "Australian big business is as Crook as hell and we don't care" then the executives who were fined yesterday will keep their jobs and life will go on as before. -------- The head-in-the-sand approach adopted in Mayne Nickless chairman, Ian Webber's public statement on the fines yesterday suggests that the board has chosen the former approach.

Webber also said "Our decision has been made for strictly commercial reasons and in no way does the company concede the accuracy of all the allegations"

The only conclusion likely to be reached by a reasonably minded observer of the case is that Mayne Nickless board withdrew its defence in this case because it knew - after viewing the TCP evidence - that the company didn't have a remote chance of winning the case.

Australian Financial Review 7/12/94

By virtue of a mind-set, intelligent reasoning about risk control seems to have been abandoned - as though economic rationalism was, like mad-cow disease, itself a form of encephalopathy.


We are entering a phase of life in Australia when "business thinking" will be transfused into every possible vein, compatible or not.

Professor Stephen Leeder "Mad-cow thinking - how far has it spread"

Australian Medicine 20/5/96 page 6

"The government should not assume the professions resolute adherence to ethics in the face of economic loss." ----- "Such competition is lethal for standards; it is not in the public interest. It is this message that the medical profession must clearly convey to patients." ------ "With the price of services as the sole determinant of health care, ethics will fail and standards will fall. Governments will establish standards bureaucracies, despite inadequate methods for assessing quality. Money will be diverted from patient care to the ever increasing bureaucracies, while professionalism declines."

Dr Peter C Arnold, Chairman, Federal Council, AMA (MJA 2/9/96 page 272)


Kuttner asserts that "much of the economics profession, after an era of embracing a managed form of capitalism, has also reverted to a new fundamentalism about the virtues of markets. So there is today a stunning imbalance of ideology, conviction, and institutional armor between right and left." Kuttner maintains that there is at the core of the celebration of markets a relentless tautology. If everything is a market and market principles are universal then if anything is wrong it "must be insufficiently market like. This is a no-fail system for guaranteeing that theory trumps evidence." and "It does not occur that the theory mis-specifies human behavior." He asserts that "real people also have civic and social selves."

Kuttner R "The Limits of Markets" The American Prospect No 31 Mar-Apr 1997: p 28-41


"The claim to moral neutrality and scientific objectivity suits an age in which economy has come to be regarded as more important than society and in which a brand of economics has claimed scientific qualities." 

"In private corporations and in public sector services there are numerous examples of assumptions about the universal value of management."

Stuart Rees "The Fraud and the Fiction" in "The Human Costs of Managerialism" Pluto Press 1995 p 17

John Ralston Saul, the Canadian writer has mounted a strong attack on corporatism, corporatist ideology and the misuse of language by corporatists.

- - - - we are very close to having shifted the legitimacy inside Western society. Real power today lies with neo-corporatism, which is in fact old fashioned corporatism. p18

We suffer from an addictive weakness for large illusions. a weakness for ideology. Power in our civilization is repeatedly tied to the pursuit of all inclusive truths and utopias. p 19

In a society of ideological believers, nothing is more ridiculous than the individual who doubts and does not conform. p 20

How is it then that we have fallen into taking seriously someone like the economist Milton Friedman who walks about equating, in a silly, indeed an immature manner, democracy with capitalism? p87


Referring to corporatist and market theorists

That is their inability to see the human as anything more than interest driven made it impossible for them to imagine an actively organised pool of disinterest called the public good. p89

Because increasingly our society does not see social obligation as the primary obligation of the individual. The primary obligation is loyalty to the corporation. p95

The corporatist idea that elected representatives are merely representing interests has lead them to apply pressures directly on politicians ----- ----- ---- lobbyists are in the business of corrupting the people's representatives and servants away from the public good. p 97

Saul indicates that those who become aware of what is happening tend to develop a conspiratorial view of the banks or the transnationals. This was certainly my view when I first heard of NME's practices. It is only when I read their documents that I realised that these practices were the reality of the world they had built. It was this world and the words which gave it reality which were the problem. Saul says

But there is no need for a conspiracy. These are structures managed by servants. Their logic is public and self-evident. Complex long-range conspiracies require conscious leaders. To treat the technocrats as such is to give credence to their illusions about themselves. p 126

None of the critics of corporatism and economic rationalism I have quoted are opposed to a market. The market is an important part of society and functions well when subjected to the values and the will of society. The criticism is of an ideology which sees the market as universal and society as a subservient part of the marketplace controlled by marketplace values. The marketplace is not a democratic structure but functions well when controlled by the structures of democracy. Saul says

Our essential difficulty is that we are seeking in a mechanism, which is necessary, qualities it simply does not possess. The market does not lead, balance or encourage democracy. However properly regulated it is the most effective way to conduct business. p 138

Trade, like any other economic mechanism, can be extremely helpful in the right circumstances. It cannot in and of itself solve societal problems. p 146 

We know that the universities are in crisis and are attempting to ride out the storm by aligning themselves with various corporate interests. That is short sighted and self destructive. From the point of view of their obligation to society, it is simply irresponsible. p177

Let me quote for a last time that most important of anti-democratic, anti-humanist voices Emile Durkheim: "The other task for the corporation consists in the delegitimization of common sense." p189

What I have described in these five chapters is a civilization -- our civilisation -- locked in the grip of an ideology --- corporatism. An ideology that denies and undermines the legitimacy of the individual as the citizen in a democracy. The particular imbalance of this ideology leads to a worship of self-interest and a denial of the public good. The quality that corporatism claims as its own is rationality. The practical effects on the individual are passivity and conformism in the areas that matter and non-conformism in the areas that don't. p 191

John Raulston Saul " The Unconscious Civilization"-The Massey lectures Penguin books 1997

[Top] - The misuse of language

From my first experience of corporate medicine I was impressed by the use of associative meanings rather than denotative content and the exaggerated and unjustified assertions made in the face of uncontestable evidence. I called this NMEspeak because of its similarity to George Orwell's term "newspeak". It took me some time to accept that the language was "real" and not intentionally deceptive.

Corporate staff had developed a language, distant from reality whose links with the real world were tenuous but to them it was real. Sets of ideas which could be linked by flights of imagination were considered to be real and were real in their consequences. I later found that this was the language of corporate health care in the USA. Over the last 8 years NMEspeak has become the language used by businessmen, politicians and sadly many doctors when making decisions about health care. During this period a number of authors have addressed the same problem in the corporate and political worlds.

"(Managers) - - - waiting in the wings for the call to demonstrate their toughness and efficiency, their willingness to disparage old professional practices and traditions in the interests of a new corporatism."

"Associated with this promotion and educational expansion is a corporate language and accompanying attitudes. These are the outcomes of preoccupation with management as the panacea for governments and organisations."

Stuart Rees in "The Fraud and the Fiction" from "The Human Costs of Managerialism" Pluto Press 1995 page 16

" - - - - the all inclusive claims of "culture management" with its emphasis on changing the culture of an organisation by paying attention to language, symbolism and ritual (Peters and Waterman 1982)"

Stuart Rees in "The Fraud and the Fiction" from "The Human Costs of Managerialism" Pluto Press 1995 page 17

"Even as claims are made about democracy in organisations, the style of decision-making is towards secrecy and control. Even as the rhetoric about greater devolution is heard, the tendency is to control decisions from the centre, to set managers apart, to develop their own cultures, language, symbols and networks." 

Stuart Rees in "The Fraud and the Fiction" from "The Human Costs of Managerialism" Pluto Press 1995 page 21-22

For the ideologue, language itself becomes the message because there is no doubt. In a more sensible society, language is just the tool of communication. p 42

Yet in a corporatist society, most people in positions of responsibility -- public or private -- are rewarded for controlling language. "Knowledge is Power." p44

I would put it this way. Our language has been separated into two parts. There is public language -- enormous, rich, varied and more or less powerless. Then there is corporatist language, attached to power and action. Corporatist language breaks down into three types. Rhetoric, propaganda and dialect. p48

This splitting of language into a public domain versus a corporatist domain makes it very difficult for anyone -- outsider or insider -- to grasp reality. Without a language that functions as a general means of useful communication, civilizations slip off into self-delusion and romanticism, both of which are aspects of ideology, both aspects of unconsciousness.p50

The sign of a sick civilization is the growth of an obscure, closed language that seeks to prevent communication. p 57

It is the intent that is in question -- the intent to use language to communicate, or alternately, through control of it, to use language as a weapon of power. p57

Rhetoric describes the public face of ideology. Propaganda sells it. They are both aimed at normalization of the untrue p 63

"The crowd doesn't have to know," Mussolini often said. "it must believe - - - - If only we can give them faith that mountains can be moved, they will accept the illusion that mountains are movable, and thus an illusion may become reality." Always he said, be "electric and explosive." Belief over knowledge. Emotion over thought. p65

What I am saying is that we are faced by a crisis in language and communication. This crisis is being accentuated, not eased, by the universities. p 73

It is through language that we will find our way out of our current dilemma, -------- ---------. But language when it works, is the tool that makes it possible to invoke reality. p176

John Raulston Saul " The Unconscious Civilization"-The Massey lectures Penguin books 1997


I have indicated elsewhere that medicine is the rock on which corporatism in its worst forms can be made to founder. It is here that its deficiencies are exposed and where it can be challenged. If we can confront corporatism in health care, expose its deficiencies, and force it to conform to our values then this will be the first step in rolling it back into its proper place in society.

Now the very essence of corporatism is minding your own business. And the very essence of individualism is the refussal to mind your own business. This is not a particularly pleasant or easy style of life. It is not profitable, efficient, competitive or rewarded. It often consists of being persistently annoying to others as well as being stubborn and repetitive. The German voice of the Enlightenment, Friedrich Nicolia, put it clearly: "Criticism is the only helpmate we have which, while disclosing our inadequacies, can at the same time awake us to the desire for greater improvement." p 169

John Raulston Saul " The Unconscious Civilization"-The Massey lectures Penguin books 1997


It is wise to keep in mind that while market forces may create economic efficiencies, they have never been known to guarantee sound ethical values. Distance between money and medicine is a prudent thing to create and protect.

Modern Healthcare editorial 28 July 1997 This is the business journal for health care. This admission comes following the recent massive fraud investigations which are still sweeping across the USA.

Directive from the World Medical Association
(formulated by the World Medical Assembly in October 1993. ) 

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.

I believe that the case against the application of corporatist principles in medicine is proven. It has been shown to be dysfunctional for patients. The self interest consequent on corporatism encourages the misuse and abuse of ill and trusting citizens. It has been associated with fraud. Standards of care are compromised. As medical practitioners this is our responsibility. Our political leaders have been fully informed about these matters and have taken no action. As a profession we have a duty to take further action.


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