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 all of 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.

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This page describes Ramsay Health Care's story from its origin in 1964, through its first temporary listing on the share market in the 1987, to the collapse of its founder Paul Ramsay's entire global empire in 1989 and then its recovery during the early 1990s.

Australian section   

Ramsay Healthcare
Early Years





The Ramsay Businesses

Information from the early years is scanty but some general comments can be made. Paul Ramsay abandoned law to enter business. He has had multiple business interests in multiple countries but his two major business interests have been television and health.

Ramsay founded Ramcorp which became Prime Television, a successful company providing rural television services. It is closely aligned with channel 7. It grew by purchasing rural competitors. His main health care business has been Ramsay Health Care in Australia but he has had a large involvement in health in the USA and interests in multiple other countries.



Ramsay Health Care
1963 to 1988

Differing reports describe how the Ramsay health care empire started with the purchase of a single psychiatric hospital in 1963/4. It grew slowly with the purchase of more psychiatric hospitals. During the 1980s it expanded into the USA where it operated psychiatric facilities and Health Maintenance Organisations. Paul Ramsay joined the growth boom during the 1980's financial bubble. Ramsay Health Care was partly floated on the share market in Australia in 1987 in order to raise capital.

During the same period Paul Ramsay's US companies listed in the USA. For a period the publicly listed Australian company had a significant share holding in the US operations. Ramsay has dabbled in health care in other countries but there is less information about this.

Like the other health care groups that listed in Australia in the late 1980s, the company soon ran into trouble.

Ramsay’s empire at the end of the 1980s bubble consisted of a complex of complicated interlinked heavily indebted health, media and other companies in Australia and the USA. When the bubble burst Ramsay almost went under.

2004 First hospital

He founded Ramsay Health Care in 1964, aged 28. He bought a guest-house on Sydney's North Shore and converted it into a 16-bed private psychiatric hospital called Warina House.
Old school and other ties Business Review Weekly October 28, 2004

2004 Another first hospital?

In 1963, Ramsay bought his first private hospital a 42-bed psychiatric institution at Neutral Bay.
Moving Up To The Quay Sun Herald February 15, 2004

1988 The Ramsay empire

Despite the uncertainty, private health care has attracted some strong investment in the past two years. Five companies of varying sizes and exposure to private hospitals have listed on the stock exchange since the beginning of 1986.
Ramsay Health Care, one of the four major listed private hospital groups, is run by millionaire businessman Paul Ramsay who also has interests in the competitive US private health care market and in Australian regional television.

The Paul Ramsay Group consists of two Australian public companies, Ramcorp and Ramsay Health Care Ltd, one publicly listed company in America, as well as private interests.

The group's assets are about $750 million and include 14 hospitals in Australia with about 700 beds, and another 36 worldwide, mostly in the United States. Ramsay Health Care is Australia's largest provider of psychiatric care.

2004 First floated 1988

Ramsay Health Care was first floated in 1988 with Paul Ramsay as the main shareholder, owning 45% of the company.
entered the television business in 1983 and bought several regional stations in the next few years, - - - Prime TV now reaches northern and southern New South Wales, country Victoria, the south-west of Western Australia and all of New Zealand. Its programming is aligned with Seven Network and its audience reach is nine million. It is capitalised at $365 million.
Old school and other ties Business Review Weekly October 28, 2004

1993 Prime Television

By the 1980s, Ramsay's collection of hospitals were spinning off good cash-flows and Ramsay decided, with the assistance of Gresham Partners director Graham Rich (then at Hambros), to have some fun in the aggregation of regional television markets.
All up, Ramsay probably spent close to $200 million between 1985 and 1992 to put together a collection of licences that enable the Prime Network to reach about 17 per cent of the Australian population.
Another bit of luck was Prime's decision to go with the Seven Network as its major programme supplier. Seven's ratings have improved dramatically ever since.
PRIME RETURNS FROM THE BRINK Australian Financial Review August 25, 1993




The Bad Years
1989 to 1992

Between 1989 and 1992 Paul Ramsay and his companies went through a bad time. Like Skase, Bond and others who had borrowed recklessly in order to build empires Ramsay had grown rapidly and had large debts.

When the 1980’s bubble burst the bottom fell out of Ramsay’s complex interlinked empire. Prime television was in serious trouble. Psychiatric hospitals in the USA were suffering in the aftermath of the exposure of extensive fraud and the misuse of thousands of children in psychiatric hospitals across the USA.

The Australian health care company was languishing and its share price had fallen. Shareholder’s complaints forced Ramsay to discontinue incestuous management contracts between the Australian public company and his own private company.

These losses were partly compensated for by Ramsay’s ownership of US Health Maintenance Corporations (HMOs) which prospered in the aftermath of the scandals. Managed care and stronger HMOs were the market’s inappropriate response to the problems exposed by the US scandals. This helped to rescue Ramsay’s empire.

Ramsay’s perceived integrity and his willingness to knuckle down and downsize impressed his creditors. He was helped to restructure and survive. Assisted by support from adviser and friend Graham Rich at Gresham Partners he persuaded Westpac to refinance his enterprises.

Ramsay was forced to temporarily sell down the size of his holdings in the US companies. He was able to forcefully buy out the other shareholders in Ramsay Health Care. Some shareholders were unhappy about what they were offered. He turned Ramsay back into a private wholly owned unlisted personal company which for a while owned a large slice of Prime Television.

Extracts tell the story.

1990 Shareholders unhappy

Paul Ramsay has succumbed to pressure from Ramsay Health Care Ltd shareholders and terminated management contracts between his private company and Ramsay Health Care.

Shareholders expressed concern at the annual meeting about Paul Ramsay Hospital's charging Ramsay Health Care for administering its hospitals.
RAMSAY CONTRACTS ENDED Australian Financial Review February 26, 1990

1990 Money problems

Others, such as two smaller listed operators, Alpha Pacific and Ramsay Health Care , are struggling to make money while trying to service big debt burdens.
HEALTHY PUSH FOR PRIVATE HOSPITALS Australian Financial Review March 15, 1991

1993 Survival

THE $7.4 million operating profit reported yesterday by Paul Ramsay's Prime Television Ltd marks a truly remarkable comeback from a near-death experience.
The Prime result came after four years in which the company had racked up accumulated losses totalling $47 million and a period between 1989 and 1991 when the company was, as one banker noted yesterday, "delicately poised" on the edge of receivership.
Gresham Partners took little by way of cash compensation for its efforts in putting the restructuring deal together, but instead took shares and options that yesterday were worth close to $9 million.
Amazingly, Paul Ramsay has come out of the restructuring still holding a significant parcel of Prime shares - 47 per cent of the company.

He has also retained ownership (after privatisation) of his private hospitals and owns significant stakes in his two listed American businesses, Ramsay HMO Inc and Ramsay Health Care Inc.

Three years ago, the Paul Ramsay Holdings group of companies looked like every banker's worst nightmare. Today, Paul Ramsay is sitting pretty and, perhaps, thanking his lucky stars.
PRIME RETURNS FROM THE BRINK Australian Financial Review August 25, 1993

1994 Recovery process

IN 1989, Mr Paul Ramsay's television and health-care businesses tottered on the brink of collapse, weighed down by about $440 million of debt and a complicated corporate structure.
The publicity-shy Mr Ramsay acknowledges that his zeal for deal making in the 1980s was largely to blame for his financial woes and says a new business ethos exists within his shrunken empire.
"One of the things we tried to do was to help the banks. I moved out of my house and tried to cut every expense. I lived extremely cheaply. Instead of battling the banks, I said let's work together.

"They lent me a lot of money in good faith and it is my turn to pay it back."
Since 1989 the group has raised about $100 million in fresh equity, sold more than $70 million worth of assets and written off about $60 million through liability forgiveness.

During that period, Mr Ramsay supplemented the cross-collateralisation of loans in his group with personal guarantees through Paul Ramsay Holdings.
REHABILITATED RAMSAY ON THE PROWL Australian Financial Review March 1, 1994

1995 Rescued by US HMO's

Four years ago Ramsay was fighting for his corporate survival, his empire - a textbook example of 1980s conglomeration - close to collapse. Having geared up for expansion into financial services, radio, television and health care, Ramsay was crunched between soaring interest rates and plunging asset values.
A timely foray into the US health maintenance business has largely been responsible for Ramsay's resurgence. The trade-off has been less time at home to focus on Prime's growth.
"He put his head down and dealt directly and honestly with the bankers and I think he came out not only with his business in great shape but with his reputation intact.
Back From Brink And Into His Prime Sydney Morning Herald March 25, 1995

1997 Looking back

Ramsay's operations had a near-death financial experience in 1989-91, involving a bank-forced consolidation of his stretched media and health empire.
Ramsay Hitches His Star To The Public System Business Review Weekly Mar 24, 1997



Rebuilding the Australian Company
1992 to 1994

During the early 1990s Ramsay concentrated on rescuing and then rebuilding his Australian empire. He made his psychiatric empire profitable becoming the third largest hospital group in the country behind Mayne Health and Australian Hospital Care.

At this time there was strong pressure on private health care because private insurance rates had fallen to almost 30%. The taxpayer funded public hospital system was increasingly attractive to citizens and the private sector could not compete.

It was the costly elderly who remained insured. This forced premiums up to unsustainable levels with more and more younger people dropping insurance. The private system was failing. Ramsay Health Care fared better than some competitors because of its niche market in psychiatry where there were few competitors and like Healthscope it had leverage. It must have felt threatened when insurers, followed the US example and attempted to limit in-patient hospital stay.

1993 Rebuilding

Analysts say those private hospital groups that nearly drowned under the burden of '80s-driven debt (during the property boom, hospitals were trading for as much as $250,000 a bed) were now beginning to get their houses - or hospitals - in order. Listed groups such as Dr Mark Bryce's Australian Hospital Care , the psychiatric hospital group Ramsay Health Care and Alpha Healthcare had now reduced their debt to acceptable levels and were performing well, according to Bob Sheraton of Archon health consultants.
RETURN OF THE BODY SNATCHERS Australian Financial Review November 12, 1993

1994 Psychiatry threatened

The idea (to reduce psychiatric hospitalisation) is outlined in a letter to Ramsay Healthcare, which operates 14 private hospitals, including nine psychiatric ones.
HCF BID TO CUT HOSPITAL STAY Sydney Morning Herald March 10, 1994



Web Page History
This page created August 2005
Michael Wynne