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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The Insurance Dispute

This page examines the struggle of the local community to save their community hospital when the Adelaide Community Healthcare Alliance (ACHA) bankers wanted to close it, and Healthscope did not want to manage it. It highlights the contrasting culture of the not-for-profit community service and the for-profit service as illustrated by Healthscope.


The Western Community Hospital




Nature of the Hospital

The First Closure  

The Battle Goes On

The Second Closure and a White Knight




The Western Hospital, in Adelaide, the capital of South Australia, was never part of Healthscope's empire. Healthscope did not want it. The reason for devoting a page to the Western Hospital here is the way in which it illustrates the stark divide in perceptions between for profit medicine as exemplified by Healthscope, and not-for-profit/community health care thinking as exemplified by the Western. The former's dominant consideration is profit and if profits are not there then the services are expendable. The community, in contrast, will go to almost any lengths, take risks, and make sacrifices in order to keep the services available to the community and its members.

2003 Restructuring - jobs, costs and property

Healthscope says ACHA hospitals made a $6 million loss in the 2002 financial year and is about to post a loss twice that amount for the past financial year.

Its prescription for the financial ills has been to axe about 80 jobs, cut costs and sell property amid warnings flagship private hospitals such as Ashford will close unless the situation is turned around.
How the health fund battle will hit members Sunday Mail September 21, 2003

The sale of the Western also illustrates the way in which not-for-profit groups like the the Adelaide Community Healthcare Alliance (ACHA), having banded together to protect themselves in this new marketplace, are forced to adopt managerial practices and employ managers with a market focus. They begin to think and behave similarly. In fairness to the ACHA their banks, commercial institutions responsible to shareholders, had lost confidence in their ability to remain viable and were pressing them. ACHA had large loans to service.




The Western hospital was a classic community not for profit hospital. It had been founded and built by the community and was an important and integral part of the health service to a large section of the population of Adelaide. The doctors and staff were loyal. Management looked after them so that it was a rewarding place to work in. Even though patients paid for their care everyone saw health care as a community service.



2003 History

"It's the only private hospital in the western suburbs, and feeds a quarter of the population of Adelaide."

The roots of the Western go back to 1955, when a 26-bed community hospital was built at the then Henley Private Hospital on Seaview Rd, after rallying by the community.

In 1966, in-principle support was given for a larger hospital at the present site, with a public appeal raising $200,000. It opened in 1974.
DOCTOR BREATHES LIFE INTO THE WESTERN Weekly Times Messenger August 13, 2003

2003 History

Back in 1955, in response to community need and fundraising from trading tables and donations, the hospital opened with 26 beds.

Called the Henley Private Hospital, its successor in 1974 became the Western Community Hospital.
Doctor won't say die Sunday Mail August 24, 2003



Nature of the Hospital

Volunteers from the community played a role in providing additional services within the hospital. Patients knew one another, the volunteers, and the staff most of whom lived in the community.

The Western hospital illustrates the difference between corporate and community hospitals.

Comments, reported in the press during the fight to save the hospital from the bean counters, and in large numbers of letters to the press, attest to the sort of place it was.

July 2002 Letters to the editor

KARYN GILBERT Grange (letter to editor)
During my stay there I recognised most of the nurses because they either lived in the area, had children at the same school as mine, had nursed other family members and friends previously, or I knew of them just through the general community of which Henley & Grange enjoys a great reputation.
The community helped to get the hospital started, as it was so badly needed in the western suburbs, so how did it happen that it came into someone's hands, obviously not from our community, and it is now able to be sold? Also, think of those wonderful nurses - - - - - - .
COMMUNITY'S HOSPITAL. Portside Messenger July 31, 2002

August 2003 Grieving

Nursing director Kathy Nagle says staff had been grieving since the announcement by former owners Adelaide Community Healthcare Alliance (ACHA) it would be sold.

"I've been here for nearly 15 years and I'd always considered it a home, it's like a family," she says.
DOCTOR BREATHES LIFE INTO THE WESTERN Weekly Times Messenger August 13, 2003

August 2003 Working environment

Dr Noble said the 90-bed hospital was lucky to have had a high retention rate of previous staff. "We've got a good facility and good workers and to see this place demolished would have been intolerable basically," he said.

"I've worked here since 1980.

"It's a sort of hospital you come to and you relax.

"There are other hospitals you go to and you're very uptight.

"I still go to several other places but I do like coming back here.

"It was too good to let go."
HOSPITAL STABILISES Weekly Times Messenger August 25, 2004



The First Closure

The Western Hospital was not making enough money within the Alliance. When medical insurance rates, particularly for maternity hospitals climbed dramatically in 2002 the Alliance decided to sell the Western to an aged care provider and use the savings to upgrade its other hospitals. Hospitals were now a business and this was an economic decision.

The local community had always seen this as their hospital, built with their money. They responded angrily. The response was immediate and dramatic. A fighting committee was formed. Mass meetings were held. Doctors met with ACHA's board. Politicians took up the issue as the community rallied to help save the hospital. The AMA and the South Australian government appealed to the federal government to resolve the indemnity issue. Within a month ACHA had promised to keep the hospital open for another year but it would not reopen the maternity service.

June 2002 The first closure attempt

THE only private hospital in the western suburbs with a maternity ward is the latest victim of the worsening medical insurance crisis.

Western Hospital at Henley Beach will close its doors and the 90-bed, community-owned complex will be sold as an aged-care facility.
The closure is a sacrifice designed to keep its sister hospitals' insurance bills from spiralling out of control.
He (Sam) said Western had provided only 25 per cent of the Alliance's business.
HOSPITALS ON CRITICAL LIST Western latest victim of indemnity insurance. Adelaide Advertiser June 26, 2002

June 2002 Not financially viable

Alliance chief executive Geoff Sam says rising medical indemnity costs have made obstetrics insurance for Western Hospital prohibitive and without that service the hospital would be unviable.
While the Western Hospital holds special memories... Adelaide Advertiser June 26, 2002

June 2002 Calling for federal assistance

The private health issue has prompted the South Australian Government and the Australian Medical Association to call for federal assistance. (for the medical indemnity problem)
Hospitals face closure over liability crisis. The Australian June 27, 2002

July 2002 Staff and doctors

STAFF at the Western Hospital will hold an emergency meeting with the hospital's board this week, an eleventh hour attempt to save the western suburbs' only private hospital.

A staff committee has been formed to try to block the sale of the hospital by owners, the Adelaide Community Healthcare Alliance (ACHA).
The committee has support from Colton MP Paul Caica (ALP), who has written to ACHA chief executive Geoff Sam calling on ACHA to review its sale decision.

Mr Caica argued the community had "equity" in the hospital which was built with public funds.
"If it is indeed viable, every effort must be made to ensure that the Western remains in the service of both the community that created it, and the broader health system."
Portside Messenger July 10, 2002

July 2002 Public meetings

About 1000 men, women and children - many born at the hospital - gathered outside the Western Hospital to express their disgust at plans to close the last remaining hospital along the foreshore between Port Adelaide and Glenelg.
Hospital closure sparks angry protest. Sunday Mail July 21, 2002

July 2002 A temporary reprieve

The Adelaide Community Healthcare Alliance Board has decided to retain some medical and surgical services at the Western Hospital at Henley Beach for at least the next year.
Medical services at Western Hospital saved for another year. Australian Broadcasting Corporation (ABC) News July 23, 2002

July 2002 But not for maternity care

The alliance says it will close maternity facilities on November 1, as announced, because it cannot guarantee the provision of specialist anaesthetists to deliver pain relief to women.
They (Community) say they want the hospital retained because it is a modern, well-equipped facility and the only private hospital on the foreshore from Port Adelaide to Glenelg.
"With renewed commitment by doctors and the community to increase and sustain patient activity, we are confident that a range of services can continue to be available."
Hospital wins reprieve. Adelaide Advertiser July 24, 2002



The Battle Goes On

The community did not rest on its laurels. The hospital was still under threat. The Alliance was owned by the community and anyone who paid $10 could vote at meetings. The community rushed to enroll.

A local council lent its support. Opposition politicians assisted in promoting a petition signed by 30,000 people.

July 2004 Enlisting voters for ACHA meetings

The sign-up campaign is an attempt to apply pressure on the ACHA board at a special general meeting next Tuesday, July 30, at Ashford Hospital.
ACHA membership is open to any SA resident who, after six months as a member, has automatic voting rights at ACHA general meetings.
"This is a community hospital that was paid for by the community for the posterity of the members of the western suburbs.

"And unfortunately it's being sold off to fund some beds in other institutions."
BID TO BOOST ACHA NUMBERS. Portside Messenger July 24, 2002

July 2002 Council support

RESIDENTS lobbying to retain the Western Hospital have found a prominent ally, with Charles Sturt Council publicly throwing its support behind their cause.
The council also has offered "in kind" support to the Western Action Group, a group of senior doctors who successfully fought to keep the hospital open for another 12 months for acute services.
Cr Bernie Phillips called on the State Government to intervene and take over the management of the hospital.

"The best outcome for this community is if the hospital stays in the hands of the community," he said.

August 2002 A petition

Supporters of Western Hospital refuse to stay silent, reports Renato Castello: A 30,000-PLUS signature petition calling on the State Government to save Western Hospital will be presented to Parliament this week.
Former employees started the petition after hospital owners, the Adelaide Community Healthcare Alliance (ACHA), announced plans in June to sell the 90-bed hospital.
Opposition health spokesman Dean Brown MP, who collected the petition from residents at the hospital last Sunday (August 25) said the government should buy the hospital if ACHA could not sell to another private hospital operator.

"Adelaide's western suburbs cannot afford another closure of an acute hospital as it will have a significant impact on local health care and patient choice," he said.
PETITION PUTS ON PRESSURE. Weekly Times Messenger August 28, 2002

September 2002 A vital service

DIANE BENT Fulham Gardens (Letter)
With the development of the Government-assisted Port Adelaide Project, it is not only essential but vital to retain the Western Hospital, to accommodate the influx of new people into the western area. PRECIOUS HOSPITAL. Weekly Times Messenger September 4, 2002



The Second Closure and a White Knight

All the communities efforts were in vain and when in 2003 Healthscope did not want it, the hospital was closed and the complex was sold to a not-for profit aged care provider. Fortunately it was sympathetic to the community. They were not going to use the hospital building itself, and were willing to let it. The community did not give up. They renewed their efforts and started a public appeal to raise $175,000 to buy new equipment for the hospital.

With strong support from the community a group of doctors rented the building, successfully negotiated funding with the insurers and reopened the hospital with most of the original staff within weeks.

They had an option to purchase the hospital itself after a year and in 2004 they did so.

The Australia-wide shortage of anaesthetists prevented them from reopening the maternity beds. Whether they will be able to keep the hospital solvent in the long term remains to be seen. If Healthscope and the market's assertions that size and leverage are really critical for survival are valid then the prospects are gloomy. If these assertions are self fulfilling and self justifying then success would challenge the dogma and be a blow for common sense.

April 2003 Sale

The fourth ACHA hospital, the 90-bed Western Community at Henley Beach, will be sold by the alliance as a "non performing asset".
First day on job, hospitals' manager sacks 23. Adelaide Advertiser April 17, 2003

May 2003 Doctor's Rescue bid

But hospital sources have told the Weekly Times Messenger a group of specialist doctors is seriously considering making a bid to buy the hospital and keep it open for acute medical services.
BID TO SAVE THE WESTERN. Portside Messenger May 7, 2003

June 2003 Doctor's Rescue bid

In a state first for a general hospital, two doctors are negotiating to lease and run the Cudmore St site for a year, with an option to buy it, the Weekly Times Messenger understands.

The 90-bed private hospital and surrounding nursing home is expected to be sold to an aged care provider this week
But the fate of the hospital is far from sealed because the doctors need to secure a contract with a health fund to run it.
DOCTORS' BID TO KEEP WESTERN HOSPITAL OPEN. Portside Messenger June 18, 2003

June 2003 Healthscope did not want it

But the plans (to sell the Western) were reannounced on April 16 after ACHA sacked 23 staff and transferred management of its three other hospitals to national private hospital group Healthscope.
DOCTORS' BID TO KEEP WESTERN HOSPITAL OPEN. Portside Messenger June 18, 2003

June 2003 The community rallies again

A GROUP of Western Hospital supporters have called a special general meeting to express their anger over the sale of the western suburbs' only private hospital.
Association member and western hospital community focus group chairman Angelo Piovesan said they were challenging whether the sale breached ACHA's constitution.
"At the outset, we are trying to protest the managing of Western in the last three years, and certainly the assertion it is a non-performing asset.

"We don't believe it's right for them to sacrifice the Western so the others (ACHA's other sites Flinders Private, Ashford and Memorial) can survive, and to enable the upgrading of those sites."

Mr Piovesan also said ACHA had reneged on an undertaking given at last year's annual general meeting that all four sites would be managed by an external healthcare operator.

"They had no authority to quarantine Western for sale," he said.

"They needed a 75 per cent majority of members eligible and present for a sale or for a dissolution, but never sought that." ACHA has not returned a number of phone calls by the Weekly Times Messenger.

July 2003 The purchaser is not for profit

Elderly Citizens Homes of South Australia has bought the complex and will run the nursing home and retirement units. However, a group of doctors is planning to lease and operate the acute-care hospital. The hospital part of the Henley Beach property would close in three weeks, when ECH took over, but chief executive Rob Hankins said it could reopen later.

"We're doing what we can in terms of a community contribution to make the facilities available for the doctors to get the hospital up and running," he said.
Western Hospital's fate still in the balance. Adelaide Advertiser July 2, 2003

July 2003 The hospital is saved by the doctors

THE Western Hospital has officially been saved . . . for at least 12 months.

After lengthy negotiations, a jubilant Dr Richard Noble, a surgeon based at the hospital, will announce today the site will be reopened for acute services on Monday, August 11.

Dr Noble heads a group of largely doctors who will run and operate the private hospital, after clearing the final hurdle last week of securing a contract with a health fund. The group initially tried to buy the site and this week signed a lease with the new owners which includes an option to purchase at a fixed price after one year.
DOCTORS CLINCH HOSPITAL DEAL Weekly Times Messenger July 30, 2003

July 2003 The rescue package

TWO Adelaide doctors and a pharmacist have put together a rescue package for the Western Hospital, which closed only last week.
"It's important now for the local community to support the hospital, which has served the western suburbs very effectively for a number of decades."
Doctors help to rescue hospital Adelaide Advertiser July 31, 2003

August 2003 The hospital reopens

WESTERN Hospital has reopened after three weeks standing empty.
With strong community backing, Dr Noble and two partners have leased the hospital at Henley Beach, which reopened on Monday.

"It's been a really good start," Dr Noble said yesterday. He expected to have about 40 patients by today.
Hospital reopens Adelaide Advertiser August 13, 2003

August 2003 The task ahead

He (Dr Noble) admits they face an uphill battle to do what no one else has been able to make the hospital viable and operating at a profit, in order to buy it from ECH.

"If we don't make it work, it gets bulldozed." Dr Noble was handed the keys last week and reopened the acute care, 90-bed hospital on Monday (August 11).
DOCTOR BREATHES LIFE INTO THE WESTERN Weekly Times Messenger August 13, 2003

August 2003 The community/medical common focus

This doctor has twice tried to save the Western Hospital, formerly known as the Western Community Hospital.
"It gratifies and inspires me to have such great community support," says Dr Noble.
Dr Noble has become the acting administrator, employing 100 people, including 83 nurses and his staff adore him.
We're not a group of rich doctors trying to save this place to make money. It will always remain a not-for-profit concern."
Dr Noble was "devastated" when the hospital closed recently, having a year ago fought to keep it open when the former owner Adelaide Community Healthcare Alliance was pressured by banks to close it.
Doctor won't say die Sunday Mail August 24, 2003

February 2005 Maternity difficulties continue

While the hospital has secured indemnity insurance, it has been able to recruit only eight of the 20 specialist staff needed to provide obstetric anaesthesia and epidural pain relief services.
"We have got over most of the hurdles, we have the equipment, the indemnity, midwives, the only thing stopping us tomorrow is there is not a big enough pool of anaesthetists."
Hospital can't deliver Sunday Mail February 15, 2004

June 2004 Doctors buy the hospital

THE Western Hospital, at Henley Beach, has been saved from closure after a group of six health professionals bought it.
HOSPITAL SAVED BY DOCTORS Weekly Times Messenger June 9, 2004



Web Page History
This page created May 2005 by
Michael Wynne
Extracts relating to another Western Hospital removed Feb 2006