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I had written to Victorian health authorities on several occasions and none of my material was acknowledged. Alpha had won the contract to build and run the new Mildura hospital in Victoria. When I received material relating to standards in Sun Healthcare's US nursing homes I tried again.

18 October 1998

A/Program Manager
Health Financing
Department of Human Services
GPO Box 4057

Dear Sir/Madam,

Objection to licences for the Mildura Hospital

I refer to my letter dated 19 September 1998 and to previous correspondence objecting to the granting of hospital licences for corporations significantly influenced by Sun Healthcare. I feel impotent sending information into a black hole where it has little impact and I get no response. I nevertheless feel obliged to make sure that your department is fully informed so that you cannot later escape responsibility.

Betrayal of trust:- The information coming from the USA is now quite terrifying with a congressional inquiry titled "Betrayal: the Quality of Care in California Nursing Homes" exposing a truly frightening situation in California where Sun owns a large number of facilities. The information available and supplied to you indicates that the problems are nation wide and that Sun Healthcare is central to the problems. Note the claim that "thousands of California nursing home patients have died in recent years from malnutrition, dehydration and infections that might have been prevented". The claimant had made a study of the death certificates of thousands of people who had died in for profit nursing homes.

Staffing:- It seems that there is a US wide outcry about appalling standards of care in for profit nursing homes -- neglect, abuse, starvation, malnutrition, infections, bed sores, filth, unwashed faecal soiling, avoidable injuries and needless deaths. This as I have indicated repeatedly in the past in relation to Tenet/NME, Columbia/HCA and Sun Healthcare is consequent on inadequate staffing levels and the use of untrained and unqualified staff to provide skilled care. The critical determining factor is profit and not care. The main cost is staffing. This same assertion is made repeatedly in these reports. Note the claim that the situation stems from "overworked and underpaid staff members who cannot keep up with the demands of caring for as many as 15 people at a time, - - -". and also "the main causes for the poor care was the facilities' refusal to staff facilities at levels to insure adequate care". When the nurses protested and went on strike they were accused of greed and the company commenced a defamation action against them because of the allegations they made.

Fat in the system - a macabre joke:- In February 1998 I indicated my concern about Sun's chairman Richard Turner when he claimed that there was "a ton of fat in the health care system", referring specifically to nursing services. He said "We haven't even begun to cut the fat" which he claimed existed at a number of levels. I have never encountered a health care system where these criticisms could apply. It has always been a struggle to find the resources and the staff needed to give the best care possible. I agree that financial strictures, internal power structures and bureaucratic stasis have ensured a lag time in making changes and have hampered efficiency but the corporate solution is not a viable alternative.

Government vs corporate enterprise:- Turner insisted that government should "but out of the system". The consequences of government delegating its responsibilities to care for vulnerable citizens to profit hungry corporations is now only too clear - hardly surprising when one examines Turner's views. Turner's views are representative of patterns of thought which pervade what corporatists call a health care industry rather than a humanitarian service - the use of language to create a mythical reality. Ultimately the real world will assert itself in real consequences and this is what is happening in the USA.

Putting profit before care:- Note the assertion in California that Sun had made " a considered decision to promote profit at the expense of their moral, legal and ethical obligations". Compare this with Turner's 1996 assertion that " I think operating health care as a business is a must. As long as the government operates the system, there will be no incentive to do better." and "The marketplace would close poor operators". It is now clear that in business there is a strong incentive to promote profit at the expense of care. The final article, a financial analysis states that "Larger, low-cost nursing home chains should prosper" under the new system of medicare funding. This is because the new system will pay the corporations less. When the mythical words are removed it is clear that the market will close good operators and reward poor ones.

Living in a mythical world:- In my February criticism of Turner's position I indicated that "Turner is using language to create a disconnected through the looking glass world in which everything is opposite to the real world." This is not about theoretical up in the air abstractions. It has to do with real suffering people, what is happening to them, and what could happen to us in Australia. Sociologists have long realised that if "something is considered to be real then it is real in its consequences." We need only look as far as the other disasters of this century.

The art of delusion:- The assertion that this was a considered decision to put profit before care may well be correct. If it would have been shrouded in words and mythical concepts which would persuade protagonists of its legitimacy. It is a very dangerous mistake to make the assumption that these people are malign criminals. There is no need to do so. Simply examine their words. They are intelligent but psychologically different people who have manipulated language to create a false reality. They believe implicitly and dogmatically. This is why they are so plausible and so persuasive to those who are too busy to think critically - or elect not to for other reasons. This certainty in their mission is at the heart of their drive and central to their charisma. One of the articles describing Sun's corporate culture says "Sun is no place for doubters". You are either converted or else in bitter conflict.. Anyone who is not a team player is out - a potential threat. A form of social Darwinism in the health care marketplace selects for these personality traits. Delusion is fed by corporate success. Their indignation when criticised and exposed is real. We will never know whether the accusations of greed and the defamation actions against the nurses who spoke out about the abuses were strategic or whether this was part of the delusion. My guess is that it was real indignation.

A civil society:- When the providers of health care do not identify with the principles behind regulatory structures and do not accept their validity, then there is little prospect of their working. In the sort of "civil society" which Eva Cox refers to in her Boyer lectures there is a sense of identity between interacting individuals and the regulatory system. In a civil society the law would consequently "rest lightly" and be seldom used. The situation revealed by Turner's views and their consequences in California is Cox's nightmare society - one which depends on constant policing and penalty - a disintegrating society, struggling to prevent a cultural explosion by madly building regulatory walls.

Regulation has failed:- Australian state departments and government ministers have maintained that regulation by state authorities will contain any problems consequent on corporatising health care in Australia. They have also claimed that the terms of government contracts, presumably overseen and policed by government will be effective. Note the claims that in California "At every turn the oversight system has failed. I felt I'd gone through all the systems that should have been there to protect the patients and they have all failed me."

Reliance on regulation cannot work:- Once again the tendency to blame the regulators must be resisted. In complex areas like health and aged care there are always rationalisations which can be used. Justifications can be developed to explain. Legally the hospitals have to be given the benefit of the doubt. It is not that regulating agents on the ground don't try. It is the impossibility and impotence of their situations. The system simply cannot work.

Tautology:- There is a massive tautology in these arguments. The move to corporatisation is advocated on the basis of the failure of government and other systems in regard to efficiency and effectiveness. These same protagonists then argue that these same inefficient and ineffective government structures will contain the problems they are introducing by corporatising. These are the sort of arguments used by the Turners, Scotts and Eamers of the world. The Canadian analyst John Ralston Saul argues that our civilisation is an "unconscious civilisation". He indicates that this is consequent on the corporatist misuse of language to create a mythical world disconnected from reality. Because we perceive the world and ouractions in it in terms of abstractions which are unreal we are no longer conscious of the real world. In such a world tautologies like this pass unnoticed. They are simply part of the languages structure - a language which I called "NMEspeak" when I first encountereed it in Tenet/NME documents. This argument may sound abstract but its significance is concrete. The consequences for ordinary people are not abstract nor mythical. In Sun's California nursing homes they are very much part of the real world.

Our responsibility to the vulnerable:- I refer you to the financial review included at the end of the material enclosed. Note that the article indicated that services are provided to those "with a reduced capacity for self-care because of a chronic illness or condition. Among these illnesses and conditions are heart disease, stroke, arthritis, vision and hearing impairment, Alzheimer's, and other forms of dementia". Such people cannot be effective and aggressive consumers. They cannot shop around. Sick people are usually powerless and this is why health care is based on mutual trust. That it is those with least power - children, the mentally ill and the aged - who have been so successfully targeted by corporate predators is illustrative of the depths to which we have sunk. I have in the past compared the distortion of reality and the underlying ideological processes with those which resulted in the holocaust and in the abuses of apartheid. I did not believe at the time that the consequences would be so similar.

Public patients and vulnerability:- Now public patients in Mildura will be entrusted to a corporate provider dominated by Sun's influence. This captive group have no where else to turn. They do not have the ability to shop around. They are more vulnerable than any of the US groups exploited by Tenet/NME, Columbia and Sun. Their only protection is the oversight provided by government regulations. There are good reasons for believing that these do not work. Let me quote Turner again "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". This is Turner and Wooldridge's mythical world - a world where the ignorant, the frail, the frightened, the disturbed, the mentally failing, the young and the powerless possess mythical shopping powers. Even in this world Mildura citizens will not have the power to "shop".

Contracts:- My first experience of the misuse of patients for profit was soon after I entered practice in another country. Government workers and other groups were provided with services under a system of contracts. A majority of doctors at that time were not motivated by profit and provided ethical care. There were disturbing exceptions. It was extremely difficult for those of us who were disturbed by this to nail these down. A health system based on contracts lends itself to abuse.

Unconfirmed matters:- I have heard two other matters of concern but I have not yet verified their accuracy. I indicate their nature to prevent you from taking hasty action.

  • 1. Californian authorities have barred Sun from owning any more health care facilities in California because of poor standards of care in their facilities. I am waiting for documentary support. If this is true then it is ironic that while the USA is acting to protect its citizens by containing Sun, our federal government has ignored objections and welcomed them into Australia. They are being given government projects to build collocated private hospitals in NSW and to build and run public hospitals in Victoria.

    2. I learn from US sources that Sun's pharmaceutical subsidiary Sunscript is operating in Australia - presumably after receiving FIRB approval. An informant has indicated to me that Sunscript paid the US government US $130 million to settle some matters relating to medicare billing.. I did not see this in their US Securities and Exchange (SEC) reports so my informant may be misinformed. I am following it up and will let you know. If true then it is disturbing to think that they will be well positioned to squeeze as much as they can from Australian medicare payments. Is our policing adequate? I am worried that Sun will be operating in two areas which have provided fertile opportunities for fraudulently fleecing the system, pharmacy and pathology.

  • I expect to learn if there is substance to these matters and receive more documents shortly. I trust that your department will not rush into making decisions which will recreate the worst features of the US for profit system in Australia.

    Profit and being human:- I have repeatedly maintained that the drive for profit in integrated corporate systems severely compromises care particularly the human side - time, patience, kindness, empathy, comfort. In addition to staffing the one eyed emphasis on objectively documented efficiency and consumer political correctness in patient/provider relationships impact on care. This must be taken together with the alienation caused by currently popular management techniques. All intrude adversely into the human side of care. These deficiencies go to the heart of the humanness of our society. They are experienced subjectively and are not easy to quantify. In the care of the aged and the mentally impaired compassionate relationships are the essence. The consequences are revealed here. I really have become weary from having to say "but I told you so"!

    Yours sincerely,



    I attach a number of documents to illuminate these matters. I am not convinced that the material will be examined and my photocopying facilities are being exhausted. Most of the material is therefore supplied in files on a computer disk. They are in rich text format and should load into any modern word processor. The responsibility to examine it is yours.

  • A, Material faxed to me including a damning report from the Sacramento Bee, a report indicating president Clinton's anxiety about the federal hearing on care in nursing homes and a report describing the recent strike in Massachusetts.
  • B. Material Received in digital form.

  • 1. List of Sun nursing homes in California.

    2. Introductory article - a damning overview exposure in TIME called "Fatal Neglect".

    3. WEB SITES - Citizens aware of what is happening have opened web sites to inform citizens and gather information. I have included the text from pages on representative sites.

    4. Press Clippings/documents - problems in Sun's nursing homes, not only in California but across the USA

    5. Action by the nursing unions

    6. The nature of Sun Healthcare and its chairman. Articles which are revealing of the way the corporation and its founder behave and think.

    7.` Corporate matters. Information about the company, its operations and its finances.

    8. State and federal court actions - recent press report.

    9. Regulation and control. The way in which more regulation is advocated in the face of repeated failure.

    10. Australia

    11. The financial perspective - an article by health care financiers which is revealing of the way in which such people think and the paradigms they use.

    C. Extracts from my February 1998 submissions regarding Sun Healthcare and some of the documents.

  • The comments and criticisms reflect my opinions about the material and are intended to highlight the issues which I feel are important. Make up your own minds.

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