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GP
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Introductory
page Australian
section Endeavour
Healthcare
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Central
Initial
USA
Australian
International
Corporate
Practices
Hospital
Corporatisation
Entry
to
Privatisation
Privatisation
Background
Australian
states
Pathology
&
Radiology
Gen.
Pract. Corporatisation
Home
Australia
General
Practice
Sonic&Co
IPN/Foundation
Lifecare
Primary
1995-2004
Primary
2005-2009
Revesco/Gribbles
and
Healthscope
Mayne/Symbion
Endeavour
Content of this page
This corporate web site addresses the
issues of corporate health care within a
broad framework. A web page describing
this broad context should be considered as
an introduction to each page on the web
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This is
another company which emerged with a lot of fanfare
and powerful backers like Kerry Packer. When the
promise was not met there were corporate
resignations. It was finally sold to IPN and Sonic
Healthcare.
Updated 2009 (Click Here)
Endeavour is another company that emerged with a lot of noise and powerful backers. Its promise to list on the market has never eventuated and its has been forced to reduce its sights and sell off some of its empire. Its founder has resigned. Its story is revealing.
The comments and suggested interpretations on this page are my own. They are based on an examination of press reports publicly available. They are made within the framework of understanding developed in linked web pages. Those with a different more market oriented perspective might interpret the events differently.
Endeavour Healthcare started with the merger of Dr Garry Garside's Prime Health and Norm Carey's Westpoint Healthcare in early 2000. Both were West Australian (WA) Perth businesses that had been expanding in general practice. There were also occupational health interests. They were targeting General Practices, specialists' practices as well as pathology and radiology - a typical vertically integrated business model.
Endeavour is raising up to $15 million in mezzanine equity through Perth corporate adviser Poynton & Partners. The company is expected to raise a similar amount later this year through a prospectus offering in a public float.
Foundation Relists In The Face Of Rival, Australian Financial Review May 4, 2000Westpoint: A private Australian integrated property company operating three medical centres in Perth, involving 55 doctors. Presently considering public listing. Aiming for 68 practices nationally. Within 12 months it aims to extend to 10 medical centres in Perth with 140 to 150 doctors.
A questionable practice, The Weekend Australian June 3, 2000
I found little information on these two groups but the moving force seems to have been Dr Garry Garside who became M.D. of Endeavour. He enlisted the South African owned Poynton & Partners to secure wealthy backers. In South Africa public care is in crisis and not for profit groups have their hands full. Corporate medicine has filled the gap for the wealthy without any opposition. Australian must have seemed wide open.
The larger backers claimed a position on Endeavours board. Endeavours initial capital was $8 million. Willhart Ltd, Schaffer Corp Ltd, Chieftan Securities Ltd are reported as investors. Asset Backed Holdings added $2.5 million. An early market listing in 2000 to raise capital was planned and an optimistic turnover of $65 million was projected before this.
The company struck investor gold and immediate credibility when Poynton's induced some of Australia's wealthiest businessmen to put up $75 million. The group's anchor shareholder was Mr Packer's Australian Consolidated Press and the group included multimillionaire Richard Pratt's Thorney Investments, a South African group Rand Merchant Bank and Colonial First State. With so much cash in hand the listing was delayed until April 2001.
Mr Kerry Packer has dealt himself into the corporatisation of Australia's health-care industry, securing a major stake in Perth-based Endeavour Health Care as part of a $75 million placement.The placement has attracted fellow billionaire Mr Richard Pratt and Africa's Rand Merchant Bank to the Endeavour share register.
Packer Snares Leading Stake In Health Care, Australian Financial Review September 15, 2000
Packers company put in the largest amount and became the "anchor shareholder". It promised to maintain its dominant holding by investing further when Endeavour listed on the share market. Endeavour negotiated a significant credit facility with National Australia Bank to fund its national expansion program. It set about buying up practices across Australia.
The company immediately spent $50 million of the $75 million expanding into NSW, Queensland, South Australia and Victoria as well as Western Australia. It secured 25% of GP's in Perth but its inroads into Queensland where Foundation Healthcare dominated were minimal.
These purchased businesses it claimed generated "annual revenues of about $70 million". By the end of September 2000 it was reported as running "medical centres, pathology and radiology". In October it bought Corporate Health Group, a South Australian based occupational health service company.
The Adelaide group has annual turnover of more than $10 million and employs more than 60 health professionals operating from four locations.It also holds equity interests in a number of other healthcare assets, including an expanding national day surgery business and two South Australian Health & Fitness clubs.
Endeavour snaps up Corporate Health, Courier Mail October 14, 2000
In December it had acquired all of Russell Pathology in WA. By March 2001 it owned 30 GP clinics as well as pathology and diagnostic imaging. It was competing strongly with Mayne Nickless, the other advocate of vertical integration as well as the Sonic/Foundation/LifeCare alliance, companies which had de facto vertical integration but denied it.
The planned float in April 2001 was delayed for another 12 months. The major shareholders chipped in another $29 million with Packer contributing $8 million to bring his stake in Endeavour to $20 million. Dr Garry Garside told the press that he was evaluating acquisitions general practice, pathology, radiology and other primary health care sectors. The reports suggest that Endeavour had established a foothold in all the major states.
Two of the country's most powerful business identities, Mayne Nickless chief Peter Smedley and Consolidated Press group boss Kerry Packer, are engaged in a tussle over the $3.5 billion market for general practice medical advice. Over the past three months representatives of Mayne Nickless have been quietly approaching doctors that own large general practice clinics around the country, offering millions for some practices.
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Endeavour, which like Mayne operates pathology and diagnostic imaging companies, - - - - has plans for an aggressive expansion of its clinic network over the next 12 months.
Health Risks For Packer And Smedley , Australian Financial Review 10 March 2001Foundation and Endeavour between them have signed up about 1800 doctors around Australia -
GP body tackles health players, The West Australian March 12, 2001
Garside talks of "building a national franchise in healthcare whose hallmarks were medical excellence and financial success". It he planning to franchise doctors or does he mean branding. The approach can be contrasted with that of Sonic's Dr Goldschmidt.
Dr Kosterich is a prominent general practitioner who was for a time chairman of the AMA's General Practitioner group. During this period Australia welcomed Tenet/NME, Columbia/HCA, and Sun Healthcare into Australia. Federal and state branches of the AMA were supplied with thousands of documents. These described the way a primary fiduciary duty to the market, competitive market pressures and corporate intrusion into doctor's income had resulted in repeated and system wide fraud, as well as the misuse of patients for profit by these and other groups.
The AMA was opposed to these developments and this must have been discussed at length in AMA meetings. Dr Peter Arnold chairman of the AMA's Federal Council had published a critical analysis as had several others including Prof Stephen Leeder and David Weedon. Dr Kosterich cannot have been unaware of this. The material was available to him and he could only discount it by ignoring or discrediting it and attacking those who raised these arguments.
Dr Kosterich was among the early GP's to sell his practice - to Westpoint Healthcare. He became Medical Director of Endeavour and one of the strongest advocates arguing for corporatised medicine at meetings and in the press. He wrote an article beating up the new model of corporatised health care in the Australian Financial Review on 14 march 2001.
Corporatisation will benefit consumers and investors, as well as doctors, writes Dr Joe Kosterich*.
Everyone Wins In Modern Medicine Australian Financial Review March 14, 2001
Kosterich is clearly intelligent, ambitious and driving. By becoming a member of Endeavour he placed himself within the corporate context. Success in this context meant embracing corporate thinking and abandoning alternate perspectives. His conduct can consequently be analysed within my suggested frameworks of a "paradigm conflict" and the "closed mindedness - successful sociopathy spectrum". Garside's probable paradigm conflicts can be explored in the same way. These and other links explore these theoretical concepts in more detail.
The published material I have suggests that both failed to really confront the arguments against corporate medicine. Those who expressed their concerns were attacked as "scaremongering". The material on this web site shows that corporate medicine really is very scary. Reagan's adviser Mr Califano's 1984 assertion that doctors' compliance with corporate policy could be secured by controlling their incomes has been proven over and over again.
But former AMA general practice representative Joe Kosterich, who is now medical director of the corporate group Endeavour Healthcare, described the concerns as "scaremongering".Dr Kosterich said - - - that "clinical independence" was guaranteed in each contract.
- - - They simply buy management expertise, office space and equipment, and continue to make their medical decisions," he said.
Corporate medicine fears raised, The Australian April 2, 2001
(Foundation Healthcare, Medical Care Services, Endeavour Health Care)
- - These super clinics house not only GPs, but also chemists, radiologists, pathologists, podiatrists, psychiatrists, nutritionists, physiotherapists, travel medicine specialists ... the list goes on. - - (Endeavour) also owns small pathology, radiology and occupational health assets
Healthcare:Script for a profit, The Weekend Australian June 23, 2001Dr Garry Garside, said there was a subtle difference in the company's strategy.
Dr Garside said it was an important part of the Endeavour concept that doctors and health-care practitioners who sold their medical practices into Endeavour took shares and options as part consideration.
We are looking at practitioner ownership and maintaining the independence of practitioners while providing structural support rather than through contractual tenure agreements,'' Dr Garside said.
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Dr Garside said that Endeavour's plan included the acquisition and integration of downstream health-care activities such as pathology, radiology, diagnostic imaging and specialist doctor services.
Endeavour Embarks On A Health-care Strategy With A Difference, Australian Financial Review August 10, 2000
The company claims to have a very different business model to its competitors. In fact it is a simple vertically integrated system - so called one stop health. This is the model analysts see as profitable. The key feature of this model they claim is that doctors own a share of the company. This is of course simple incentivisation. This company also provides pathology and radiology services which it anticipates its doctors will use. Doctors consequently benefit financially not only from doing more work but by doing more tests. This has been a key problem in the US system - in essence it is a way of giving kickbacks which is not illegal.
At the same time as the company sets in place this strong incentive system, it claims that it does not interfere with the way doctors provide care. They are it claims completely independent.
Doctors have an equity stake, so they have more propensity to worry about performance,'' Mr Barnaba (Endeavour board member) said.So what about the clear conflict of interest for a doctor who has an equity interest in the services he or she is referring patients to? The corporate side of the business has to make clear medical ethics are the No 1 criterion,'' he says.
Wealth And Corporate Health, Australian Financial Review September 22, 2000
Contradictory market thinking is well illustrated by Mr Barnaba, the appointee from Poynton & Partners. Garside also juggles words in order to persuade himself that he can serve two masters - his powerful business stakeholders and his patients. In doing so he escapes reality. Experience indicates that when this happens shareholders exert their prior rights and dispense with those who genuinely serve patients as this is not profitable.
On the question of returns Endeavour investors might expect, Dr Garside is uncomfortable with the concept of profit per patient'', a model that he says is widely used in the industry. We're trying to balance patient care with return to shareholders.''
Wealth And Corporate Health, Australian Financial Review September 22, 2000
The company believes that market forces are the way ahead in medicine. Dr Garside almost repeats Sun Healthcare's Andrew Turner's assertion that government should "butt out" and leave market forces to sort out the problems. Sun's own conduct speaks for the folly of this approach.
Dr Garry Garside, managing director of a fast-growing, vertically integrated company, Endeavour Healthcare, says: Governments tend to interfere where perhaps it ought to be left to market forces. If doctors feel their independence is being compromised, they will vote with their feet and leave.''
Wealth And Corporate Health, Australian Financial Review September 22, 2000
The vast majority of Tenet/NME's doctors willingly handed the treatment of their patients over to the company so that it could fleece them. Only a few walked and even fewer blew the whistle. Much the same thing happened with Columbia/HCA. We hope Australian doctors are more resistant but the rapidity with which GP's have grabbed at the inflated prices offered for their practices and have jumped on the corporate bandwagon is not reassuring.
The company grew very rapidly expanding into all the eastern states. Not surprisingly it did not make the projected profits, perhaps because it did not have a large enough market share in pathology and radiology so did not get referrals in all the states.
By the end of 2001 it was in trouble. It appointed a new executive chairman who promptly started selling off businesses and retreating from all states except WA and NSW. Endeavour now planned to concentrate its business here. Analysts predict that it will attempt to make these sectors profitable then sell. It has not yet listed on the market. Mayne was looking for general practice referrals and analysts tentatively put Endeavour on its acquisition list.
Endeavour sold all of its Victorian operations including an option on its medical centres to Mayne Nickless. When Mayne looked at the Medical Centre businesses it refused to buy them. This was despite Mayne's urgent need for a pool of referring doctors. Was it the contracts with doctors or could the doctors have refused to join Mayne?
Endeavour was left with the unprofitable medical centres and the doctors whose equity had evaporated. It also sold its South Australian businesses.
Mayne badly needs to acquire GPs to build a referral base and has so far come up against a brick wall in trying to do this organically.
Mayne course, Australian Financial Review July 16, 2001The Kerry Packer-backed Endeavour Healthcare is completing the sale of its Melbourne assets to Mayne Nickless Ltd in a deal worth more than $15 million that marks the end of its national expansion strategy.
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The sale will mark the end of Endeavour's plans to become Australia's leading integrated health-care group, and also any immediate aspirations to list on the stock exchange. It was Endeavour's national strategy that won the backing of - - (list of major backers)
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- - - the company will attempt to position its residual assets for a trade sale once the NSW operations are going profitably. While facing big losses on their investments, Endeavour's shareholders - - - -
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Endeavour's problems are a legacy of its rapid expansion phase and management's inability to generate forecast earnings and synergy benefits from acquisitions.
Mayne Seals $15m Endeavour Deal, Australian Financial Review 11 January 2002Yesterday, the company's (Mayne) share price dropped yesterday from $5.38 to $5.16 and market analysts were speculating the decision not to take up the option to buy the medical centres meant the company was having second thoughts about its strategy of setting up a vertically integrated medical service.
Mayne chance missed as medical centres go begging, The Australian April 9, 2002The Kerry Packer-backed Endeavour HealthCare Ltd has continued its downsizing with the sale for about $4 million of its Corporate Health Group occupational health business in South Australia
NEWS IN BRIEF --- Endeavour HealthCare in $4m sale, Australian Financial Review February 23, 2002
At the same time Dr Gary Garside the founder and mind behind Endeavour's philosophy resigned without explanation. Garside was the moving force in the company. He had earlier insisted that having a doctor at the helm would protect ethical standards.
He said having a doctor managing the company would ensure ethical standards were not compromised by profit motives.
Packer Snares Leading Stake In Health Care, Australian Financial Review September 15, 2000The sudden and unexplained departure of a founding managing director of a Perth health care organisation is puzzling investors. - - - - Executive chairman, Colin Henson, denied pressure from investor Kerry Packer's CPH Investments Corporation and Richard Pratt's Thorney Holdings was responsible for Garside's departure
Source - Endeavour chief silent on walkout, The West Australian January 25, 2002 Friday
Garside had enlisted the support of some of the most hardheaded and ruthless businessmen in the world. He was not delivering. His quaint ideas about medical independence and medical ethics would cut little ice unless they enhanced profits. One can only speculate that the market was once again imposing its will and ridding itself of those who would not conform - making the situation for them intolerable. This is the story of the USA and Australia.
Other underperforming investments of recent note include the unlisted Endeavour Healthcare, - - - .
Hire Intelligence gets headache, The Australian June 19, 2002
Packer, Pratt and the other major investrs lost interest and Endeavour was sold off in bits. Sonic and IPN picked up the Diagnostic and General Practice businesses.
Endeavour illustrated the problems corporations had in securing GPs. By the beginning of 2005 it was gone.
That problem may have been behind a recent decision by the Kerry Packer-backed Endeavour HealthCare , which also owns about 50 medical centres in NSW and WA, to sell its Corporate Health Group in South Australia.
Doctor, Doctor The Business Is Sick Australian Financial Review August 9, 2003Endeavour HealthCare's medical assets comprise 14 medical centres in Perth and four medical centres in Sydney.
IPN, Sonic to buy Endeavour HealthCare assets Ralph Wragg Australian Business News October 20, 2004Sonic said it had reached agreement to buy Endeavour's pathology operation, Accord Pathology, for $28.12 million while IPN will acquire Endeavour's network of 18 medical centres in WA and NSW for $8 million.
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Industry insiders have said an Australia-wide shortage of general practitioners thwarted Endeavour's expansion plans and forced the company to consider its future.
Packer eyes Endeavour retreat The West Australian October 21, 2004Subject to shareholder approval of the sales, Endeavour will be left with its occupational health business, though this is also likely to be sold.
Packer push to quit Endeavour The West Australian October 21, 2004AZURE Capital chairman John Poynton has bought occupational health business Prime Health Group from Endeavour Healthcare.
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WA Business News understands Endeavour Healthcare's main investors, including Kerry Packer's Consolidated Press Investment, have exited the company.
Poynton makes Prime purchase WA Business News January 13, 2005
Foundation Relists In The Face
Of Rival
Australian Financial Review May 4, 2000
Big health groups to merge and list
The West Australian August 3, 2000
Health groups reach more
The West Australian August 4, 2000
IN BRIEF --- Asset's new venture
The Australian August 4, 2000, Friday
Profits or patients
Sydney Morning Herald August 10, 2000
Endeavour Embarks On A Health-care Strategy With A Difference
Australian Financial Review August 10, 2000
Packer Snares Leading Stake In Health Care
Australian Financial Review September 15, 2000
Endeavour gets Packer-led lift
The West Australian September 16, 2000
Endeavour Confirms Growth Plans, Packer As Shareholder
Australian Financial Review September 16, 2000
Wealth And Corporate Health
Australian Financial Review September 22, 2000
Corporate Medicine
Business Review Weekly 29 September 2000
IN BRIEF --- * Endeavour expands
The Weekend Australian October 14, 2000
Endeavour snaps up Corporate Health
Courier Mail October 14, 2000
Endeavour mops up
The West Australian December 9, 2000
Foundation seeks $50m for growth
The West Australian February 6, 2001
Health Risks For Packer And Smedley
Australian Financial Review 10 March 2001
GP body tackles health players
The West Australian March 12, 2001
Corporate medicine fears raised
The Australian April 2, 2001
Packer Opts For Some More Endeavour
Australian Financial Review May 29, 2001
BRIEFS - - Packer backing
The Australian May 30, 2001, Wednesday
Firms fight for $2.7bn in doctors' fees :::: * Endeavour
Healthcare
The Weekend Australian June 16, 2001
Healthcare:Script for a profit
The Weekend Australian June 23, 2001, Saturday
Briefs -- Colonial investments
Australian Financial Review June 27, 2001
Mayne course
Australian Financial Review July 16, 2001
Mayne business booms as more Australians go to hospital
AAP News 29 August 2001
Down but in some good company
Australian Financial Review November 23, 2001
Mayne Seals $15m Endeavour Deal
Australian Financial Review 11 January 2002
Endeavour chief silent on walkout
The West Australian January 25, 2002
Mayne buys 13 radiology facilities
Courier Mail January 26, 2002
Endeavour gets Vic jitters
The West Australian January 26, 2002
BRIEFS ---- Mayne scores MRI licence
Australian Financial Review January 29, 2002
NEWS IN BRIEF --- Endeavour HealthCare in $4m sale
Australian Financial Review February 23, 2002 Saturday
Mayne diagnosis looks rosy
The Australian February 27, 2002
DAY TRADER -- Mayne sniffles linger
The Australian April 10, 2002
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