"Contrary to tradition, against the public morals, and hostile to good government, the lobby has reached such a position of power that it threatens government itself. Its size, its power, its capacity for evil, its greed, trickery, deception and fraud condemn it to the death it deserves." - Hugo L. Black"The consumer is the only man in our economy without a high-powered lobbyist in Washington - John F. Kennedy
Quoted in "Inside Lobbying for Health Care Reform"
Add to that (political donations) 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" (a 1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY web site accessed in 1997.
The page starts by arguing that the starting points for concepts about democracy in the USA, in the right extreme of world politics, and in the globalising marketplace are centred on rights and opportunities to pursue self interest. This is at the expense of democratic community obligations and responsibilities to others and the community. What happens in politics, in the marketplace, and in the close relationship between politicians, economists and the market follows. The page looks at the consequence for markets, politics, society and the health system.
The page goes on to examine the links between the market and politicians by looking at political donations, lobbying, perks from corporations, and at deferred rewards with directorships and jobs after leaving politics. It looks at the development of a corporate class and their dominance in politics. The possible impact of politicians' ownership of company shares is explored. The extensive and often deceptive corporate marketing of points of view and in support of the politicians they want is explored. The financial support and so neutralisation of community groups who might otherwise become corporate citics is documented. These matters are all illustrated by examples from the health care marketplace. Brief outlines are provided with links to pages on this web site documenting these matters in health care.
In the USA it was the market which initiated the ideology and which imposed its economic solutions on health care. Politicians largely followed on and then with Reagan embraced market thinking.
Australia differs from the USA in that the politicians and their economists have embraced the ideology and driven the process. The market has aided and welcomed the changes but not led them. It is politicians who have sought to corporatise health care and who have brought in multinationals. They have done this without opening realistic public debate on the radical corporatisation health policies they introduced. While market analysts have been enthusiastic, much of the local marketplace has been reluctant to embrace health care. Companies have been slow to fill the corporate opportunities created by government policy. Local companies have not exploited the vulnerability of sick citizens as willingly as those in the USA and when they have there has been a backlash. The community, which strongly supports the single payer Medicare system has been ambivalent, and the health care professions generally opposed. The way corporatisation of health care has developed in Australia is reviewed and links are provided to other pages.
A criticism from the left throws considerable light on what is happening or at least the direction in which the western world is heading. This is not a plug for socialism but a criticism of right wing market extremism. It is a plug for balance.
Churchill famously expressed the view that democracy was a poor form of government but it was the best we had been able to come up with. The argument I am advancing is that all our so called democratic systems are compromises of one sort or another and imperfect - not true democracies and that includes the USA. Pure Athenian style democracy is impractical outside a city state but it remains an ideal. Different cultures and different societies embrace the idea differently. Modern democracy is a moderately complex western idea and some societies are still insufficiently westernised to be able to adopt it successfully. George Bush's imposition of his idealised market centred definitions do not serve us well! There are serious problems in the way we are implementing the democratic ideal - problems which subvert key values and result in a shift of power from citizens to corporate leaders.
Corporate interests would respond to the criticism of the way they relate to politicians by claiming that they are doing no more than exercising their democratic rights and that every citizen has the right to speak out in their own interests and to join with others to press common issues. This is quite legal and is what democracy is all about to them. In the self-centred current context of democracy they are right.
This response reinforces my arguments about the problems in democracy and particularly with different democratic "starting points". When democracy is about personal rights and asserting them in ones own interests then corporate conduct becomes legitimate. Those who are more active or more able to exert influence hold greater power and use it for their own benefit. They gain status by flaunting wealth and power. This destroys the most fundamental tenet of democracy - equal representation.
It (the Grubman/Weill nursery school drama) reinforces his thesis, he said, that Americans don't practice democracy as often as they preach it.
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The idea of democracy is just that, Mr. Homberger (author who writes about America and New York) said -- a lovely but impractical theory."The whole democratic ideal, the idea that you thrive on merit alone, is part of the American mythology, but it is not the way people conduct themselves." Doing Unto Others in a Big Way The New York Times November 24, 2002
If, instead of embracing personal rights, a particular idea of merit, and the legitimacy of selfishness as a starting point, we embraced personal responsibility for others as a key democratic value then the practices described here become inappropriate. In speaking out individually and joining together we would be expected to act for the common good - acting responsibly for all of us, even when this is contrary to our personal interests and the interests of those we represent. Instead of asserting our own rights and interests as stakeholders we would act as informed and more knowledgeable citizens to protect the interests and rights of others.
The politico-economic term stakeholder would become suspect. It would be replaced with terms like independent adviser, outside expert and other words that more closely reflect the values and mutual responsibilities which should be intrinsic to the relationship between politicians and citizens in a civil society. We already have groups like this in the community but they lack the money and the influence to be effective. They can't compete. In the sort of democracy they have in the USA and which others are embracing they are ignored and lumped with the large number of market losers - those who are seen to have squandered their opportunities and so must bear the consequences.
Much the same can be said about market societies - societies whose wealth and welfare is built on markets. When controlled by society, applied intelligently in moderation, and modified to suit context and culture both democracy and markets have served us well. The market is the best system we have come up with so far but no particular model has universal applicability. Both have major weaknesses and flaws and work only because as reflective beings we are aware of this and modify contexts in order to reduce or eliminate the problems which arise.
My criticism is that right wing extremism has adopted an ideology which fails to see and refuses to recognise the pitfalls in their particular interpretations of democracy and capitalism - the one size fits all model. Instead it exploits the weaknesses of both democracy and the market for personal advancement and turns a blind eye to its conduct. (e.g. using taxpayer money to fund government election campaigns in Australia).
We should be asking questions about what we want democracy and capitalism to be and how it should serve us? Is the prime focus of democracy the right and opportunity to compete with little regard to the consequences for those "inferior beings" who lose out in the particular form of competition? In some countries unfetterred competition for wealth and advancement has become an ideological all encompassing given which cannot be challenged. This form of democracy in the USA was well illustrated by DeBotolo in the first of his June 2004 series on "status anxiety" - (irrespective of whether his main thesis and his solutions have validity which is another issue). (see ABC Four Corners Program Compass at <http://www.abc.net.au/compass/s1102413.htm>).
A more balanced view of democracy recognises rights but gives far greater emphasis to our responsibilities to one another, to cooperative endeavour and to public good rather than personal gain. We all have rights only because we have obligations to one another.
Those who fail in a competitive market system, often through no fault of their own depend on the rest of us to meet our obligations and protect their interests too. Many have valuable attributes which do not flourish in a competitive marketplace. A responsible democratic society will seek to create contexts in which they can realise their potential and make their contribution to the common good. If the issues were put to voters more clearly and they were allowed to reflect on it, I suspect that a considerable majority of citizens would favour a responsible balanced model of democracy and markets over the selfish model.
Competition, like lust, is an essential and important component in our civilisation. Our survival depends on both. My argument is that both need to be controlled and directed in a civilised society. There is a time and a place for each. My personal experience with lust was with the violent and frequent rape of young children whom I had to treat when African society and culture broke down under apartheid. The pack rapes by uncontrolled German and Russian troops during the Second World War is another example of ruthless uncontrolled lust escaping control. Closer to home we have footballers whose subculture has escaped the social control exerted by the wider communityindulging in similar conduct.
If we look at the "rape" of trusting and dependent citizens by Citigroup and other financiers and by the large health care conglomerates, Tenet, HCA, Vencor etc. we can draw some inferences about uncontrolled and ruthless competition. We need to ask whether market ideology with its emphasis on competition as an unchallenged "good" destroyed the social fabric which previously held this primitive urge within acceptable social bounds and directed it to activities which benefited citizens. Can we draw a parallel with the footballers.
The question then is whether we want the sort of ruthlessly competitive marketplace which the economist Milton Friedman* advocated, and which we are getting - in spite of public relations attempts to deny this. With competition as an unchallenged "good" I suggest that this is what we will get.
If we want a society in which the corporate market is the means by which we carry out those projects and services which require cooperative effort, and through which individuals build fulfilling lives then we need to define more socially tenable starting points and control competitiveness in the same way that we control our lust! We need to look more critically at what we are trying to achieve and consider the starting points, contexts, norms and values which are needed to achieve this. Experience now suggests that the role of competition needs scrutiny, modification, and redirection with a re-emphasis on the primacy of values. Health, aged care, banking and financial advice are key areas for attention. Competition for third party profit clearly has not worked.
* Friedman maintained that corporate staff's only responsibility was to shareholders and that executives were expected to exploit every opportunity for profit within the limits of the law.
In addressing politicians in capitalist democracies I ask you to remember the framework of analysis which I am using. The argument is that politicians are little different to corporate executives. Like the rest of us politicians come from the community and respond to situations in the same way we do. It is easy to blame politicians for their dishonesty, their greed in accepting donations with hidden strings attached, and the unprincipled manner in which they compete for power. The argument is that we are getting the sort of politicians who succeed in the political context which we have created. The system selects for the characteristics which win votes and secure government, power and status. Could it be that the sort of principled, wise, reflective people - those who would best serve us as leaders - don't enter politics or else are unable to compete there? Could it be that we no longer value these attributes highly and as a consequence individuals with these attributes are no longer produced in our society?
The power of the marketplace and the close relationship between the corporate establishment and right wing politicians is a problem across the world but none more so than the USA. Market enthusiasts and marketplace economists are the driving force behind domestic and international policies. They have a disproportionate influence and hold excessive power in the World Trade Organisation and in pressing for trade agreements. Influence in the World Bank ensures that loans to developing countries favour marketplace solutions. The market has a profound impact on political thinking, on the decisions which are made, and on the laws passed or defeated.
While trade, the economy and markets are the engines which generate the wealth which supports our civilisation, it is not the whole of this civilisation - something those who have enmeshed their lives in markets and economics seem unable to grasp. Their horizons seldom extend beyond marketplace arguments and solutions. Instead of examining alternate perspectives, these are seen to be misinformed or obsolete. They respond to alternate points of view by attempting to educate those who hold them - or even market their views and rationalisations competitively.
I argue that over the last 30-40 years this corporate establishment has appropriated the structures of democracy as their own. Capitalist markets have become synonymous with democracy and the language of the marketplace has become the language of democracy. There has been a powerful and influential movement to restructure all of society within a marketplace model. The emphasis on measurable outcomes, while important, has marginalised perception and understanding in human affairs. Only measurable factors are seen to have relevance and to be worthy of consideration. Money is required for almost all of our activities and easily made economic measurements increasingly replace other considerations in decision processes. Cognitive considerations, common sense and underlying moral issues are being marginalised.
By marketising democracy, the market has come to control democracy and define it in its own image. Constraints on market activity are seen as a breech of democratic rights. The ideal of democracy has been eroded and the political process marketised. Politics has been colonised by corporatists. While citizens retain one vote each the influence of the corporate sector on politicians and the political process enables the corporate sector to exert a disproportionate influence on national decision making.
Wealth and organisational structure allow corporate interests to buy marketing time and expertise. They exert a far greater influence on the perceptions of rank and file voters than less wealthy groups and individuals whose arguments are drowned out. Political funding, most of it from the corporate sector plays an increasing role in winning elections. Despite contrary claims this funding does not come without obligations. Funding plays a particularly disproportionate role in the election of the president of the United States.
Money buys the means to influence voters. Through a circuitous process the market is increasingly able to buy the candidates, the power and the policies it wants. The Bush vs. Kerry 2004 campaign is no exception.
As a consequence of the adoption of market thinking, economic outcomes have become the measures of success or failure. They are seldom considered as constraining or facilitating factors in social endeavour. Personal greed and personal advancement have replaced social conscience and responsibility to others as motivating forces. Incentives and disincentives have replaced values, cognition, responsibility and reflection as the driving forces in our lives - a perverse and extreme behaviourism. We have become blind to alternate points of view. Any challenge to economic ideology is labeled as left wing or socialist which puts it beyond the pale.
The corporate hold on the money the community needs for all their activities has allowed them to impose market systems of thinking and practice on those activities. The community is increasingly dependent on corporate largesse and so bound to the market by monetary ties. Instead of the market serving society, society is becoming the bonded servant of the corporate marketplace. It has been restructured to serve its new master. I am not suggesting some evil scheme in which corporations trade influence with community groups, but rather a social process with social consequences. Donations by pharmaceutical companies to patient self help groups may be humanitarian but this has huge benefits in the market and politically.
The humanitarian motives on which our social services, including health and aged care, were built have been replaced by incentivisation, marketplace advancement and profitability. Hospitals and homes designed to serve the community have been restructured and redesigned to serve the marketplace and those who invest in it. The original intention to use the marketplace to serve the community has been lost in the pressures generated by the marketplace.
This is not to suggest that those who work in this environment do not identify with the ethic of care and do not believe that this is what they are providing. The problem is that society requires them to serve two masters, the vulnerable sick and the ruthless marketplace as if they were congruent rather than mutually exclusive. In this situation those in the system serve the stronger master and then employ strategies which allow them to claim that they are serving the weaker, more socially acceptable master.
As part of this process the leaders of corporate empires and their supporters have infiltrated the structures of democracy and have come to control it in their interests. The more their interests are involved the greater the corporate political activity. In a marketplace society it is money which buys influence and political outcomes. Behind the facade of "one man one vote" is another force which exerts a far more powerful influence - the money corporations spend to get their way and frustrate the votes of the citizens. The wider society still outwardly abhors greed and self interest and this influence is therefore kept largely out of view and hidden behind "charitable" corporate largesse.
The amount of money spent is proportional to the corporate need for legislative support, or the threat which community (i.e. voter) pressure for legislation poses to their interests. Health and aged care have been the centre of legislative effort over the last 10 to 15 years. As a consequence more money has been spent by health and pharmaceutical groups than in most other sectors.
One of the best analysis of corporate influence was made by the the Center for Public Integrity in their 1994 study of the failure of president Clinton's initially popular health plan. This report is no longer on their web site but I have drawn many of my illustrative quotes from it. Since that time there have been other studies and reports describing the same practices by managed care companies, pharmaceutical giants, and many other sectors of the marketplace. Corporations have spend more and more as new issues which affect them arise. The strategies have become more sophisticated. Some of these more recent activities are referred to on other pages.
Corporate influence is exerted in multiple ways and I refer to some of these.
The Center looked at contributions made to the members of Congress serving on each of the five committees that worked on health care legislation. From 1993 and early 1994, members of these committees accepted $8,240,694 in political action committees (PAC) contributions from health care-related interests. The House Ways and Means Committee led the way by virtue of its size and importance. Committee members garnered nearly $2.7 million, with the powerful (and now former) chairman Dan Rostenkowski, D-Ill., accepting $218,750 from organizations that have health care-related interests.
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A relative unknown before this year, the Tennessee Democrat (author of health care legislation) took in $9,428 in 1991 and 1992 in individual donations from health care-related individuals. In 1993 through early 1994, health care-related individuals added $461,800 to his coffers.
Inside Lobbying for Health Care Reform (a 1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY accessed in 1997
Also giving to the inauguration was Enron Corp., the energy company that supports deregulating the industry. It has been Bush's top financial supporter during his political career, according to the Center for Public Integrity.
Bush Raises Record Inaugural Funds Associated Press January 20, 2001
In modern democracy political success is heavily dependent on marketing - marketing a simplified message and marketing the image. Without political donations and the use of the media, a party could not win elections.
In both the USA and Australia regulations exist to force disclosure of political donations, but these are lax and full of loop holes so that exact contributions are often difficult to determine. In neither country have politicians shown any interest in closing the loopholes. The public remains uninformed about those who are bankrolling political campaigns, Few know which politicians are receiving political contributions and who their donors are.
It is clear that these donations exert a powerful influence. This is why market groups spend so much. The corporations support those whose views favour the corporate position. The elected politicians feel an obligation to support those who have given them money. If they fail to do so then this might be directed to a competitor at the next election. Most heavily supported are those who sit on committees which deal with issues specific to a particular industry.
This political influence occurs at state and federal levels. In their home states and cities in the USA corporate leaders are lionised. They have close dealings with the local politicians and lend them support.
The traditional means of lobbying -- hiring a law, lobbying or public relations firm -- remain the bedrock of the Washington landscape. According to House and Senate records and other sources, the Center has identified at least 97 firms that have been hired over the past 18 months to influence the health care debate.
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On a more traditional level, the Center for Public Integrity found that at least 80 former Congressional and Executive Branch officials have gone through the "revolving door" to work for health care interests. Twenty-three former officials left the government in 1993 or 1994. Twelve of the 80 are former members of Congress,- - - - - - - - .
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Washington was stunned in late January 1993, by the announcement that the respected, nine-term, ranking Republican on the House Ways and Means Health Subcommittee, Bill Gradison, was quitting the Congress immediately to become the chief lobbyist for the insurance industry association.
Inside Lobbying for Health Care Reform (a1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY accessed in 1997
Lobbying state lawmakers and government officials cost businesses, unions and issue-advocacy groups at least $715 million last year, with nearly half the money spent in California, New York and Massachusetts, a new report found.
Lobbyists Spent $715M on States The New York Times May 15, 2003
Lobbying politicians has become a lucrative industry and a revolving door as individuals move from inside the political system, to lobbying and even into jobs in the corporate system. People who have had experience as politicians or in government departments have both knowledge and the ear of those in power. They can take the corporate position into the heart of the political process and ensure that it is heard and loudly argued. This is a marketable commodity and they command huge salaries for doing so.
Over 85 members of Congress participated in 181 trips sponsored by the health care industry to 73 cities in the United States as well as San Juan, Puerto Rico; Paris, France; Montigo Bay, Jamaica; and Toronto, Canada. Of those trips, half were to the popular vacation destinations of California and Florida. Members brought their spouses on 73 of the trips.
Inside Lobbying for Health Care Reform (a1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY accessed in 1997
There are of course many other ways in which corporate interests can express their appreciation and get politicians on side. Trips to meetings or to do research and meet others who support marketplace solutions would be a great help to them - then there are the pure junkets or holidays under the guise of business.
Lucrative corporate positions await those who help serve their corporate donors well. Politicians who have been supportive retire to lucrative positions on corporate boards where their experience in the political system is a great asset. Australia is no exception. Two previous labour prime ministers, Hawke and Keating, act as corporate ambassadors in China and other countries selling Australian corporate services. Business success is politically valued and successful corporatists move to politics or else are appointed by politicians to positions of power and influence.
The most widely-held assets appear to be in the pharmaceutical industry -- 32 members of Congress, their spouses, or children have investments in Merck & Co.; 28 in Bristol-Myers Squibb Co.; 20 in Procter & Gamble; 17 in Johnson & Johnson; 12 in American Home Products; 12 in Glaxo; and 11 in Pfizer. Anheuser Busch and Philip Morris, two other companies that have been lobbying over health care reform legislation, are also top investment choices. Inside Lobbying for Health Care Reform (a1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY accessed in 1997
Having a financial interest in an industry creates a subtle conflict of interest when legislators are passing legislation which will impact on profits. (e.g. patient rights legislation)
The establishment in the USA consists largely of successful and wealthy businessmen, politicians and senior government officials. Political donations and lobbying are the outward and legal links between money and influence, links which extend much deeper at a personal level on the golf course.
Political candidates from the corporate sector receive strong support from that sector and consequently are elected. Some studies have defined a corporate class as a way of representing this corporate establishment and studying them. One study found a massive dominance of the corporate class among politicians and in other positions of power.
Governments gaining power on the back of corporate largesse respond by appointing corporate leaders to positions of power in their administrations. While they are required to be unbiased and act in the public interest their views about what this is are coloured by their past experience and activities. To claim that they are suddenly independent of their lives and the positions they previously held is trite nonsense. It is because of this experience and the positions they hold that they have been appointed. In the USA president Bush's appointment of Thomas Scully and other corporate advocates to senior positions in health care administration is illustrative. In Australia similar appointments were made to the Health Insurance Commission and other health departments by the minister for health, Dr. Wooldridge.
This is not to claim that the corporate class should be completely disempowered but to press for a more balanced representation, and insight into the limitations of markets and those who believe in them. Our difficulty is that because society has become marketised and corporatised most of its structures are organised by corporate managers and leaders. It is as if functioning society itself has become no more than a corporate marketplace. As a consequence those with alternative points of view are not trained, nor do they get the experience required for them to become leaders. If they do get elected to positions of power they do not function well within the market focussed structures where they must work.
With the Clinton administration and the House Ways and Means Committee, the commercials were a form of pressure that could be turned on or off if government policymakers were responsive to the industry association's concerns."This kind of quid pro quo relationship" between advertising and the specific provisions in legislation is a new development, Jamieson (researcher into health care advertising) said. - - - - - - - - She said that by the time Congress votes on health care reform legislation, advertising alone about the issue will exceed $50 million.
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More than ever before, tens of millions of dollars in television advertising have been spent by health care advocates with spectacular, if not chilling, results. For the first time, Congress and the White House have faced the prospect of being bludgeoned by mass saturation criticism if the "wrong" provisions are included in the legislation.
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The combination of sophisticated, instantaneous grass-roots mobilization and utilization of the public airwaves is deadly -- a more effective and formidable strategy than previously seen.
Inside Lobbying for Health Care Reform (a1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY accessed in 1997
The success of the corporations, particularly those in health and aged care is built on marketing their products to the public and buying the services they need. This skill is readily transferred to the political process. Public Relations firms are paid large sums for their skills. Corporations and the bodies representing them exert a powerful influence on the political process by marketing the points of view of the party and the politicians whom they favour. They have been particularly successful in marketing policies favourable to their interests. Vast sums have been spent.
Whatever one's politics or ideology, the Clinton administration's American Health Security Act is one of the most sweeping domestic policy reform proposal in decades.
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The frontal assault by a lobby group against the White House, via the television airwaves, was unusual for several reasons. Most Washington associations never are so direct or high-profile in opposing a President and his policies, and heretofore, no group has ever blitzed the public policy process with television commercials to this extent.
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But there is no better measure of the potency of the commercials than the straight polling numbers. In the six month period immediately following the unveiling of the Clinton plan -- precisely the time the White House hoped to build upon the momentum of the President's speech and broaden public support -- the percentage of Americans supporting the Clinton health care plan dropped 18 points to 39 percent, with 46 percent opposing it.
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"Impact" is an understatement. No single organization has done more to dampen national enthusiasm for the Clinton health care reform plan -- or kill one of its key provisions, mandatory health alliances -- than HIAA (Health Insurance Association of America). As mentioned earlier, the "Harry and Louise" television commercials are widely considered to be the key reason why public support for the Clinton health care plan dropped a precipitous 18 percentage points in a six-month period.
Inside Lobbying for Health Care Reform (a1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY accessed in 1997
One of the best known of these is the 1994 $15 million series of ads by the insurance companies featuring a fictional yuppie couple, Harry and Louise. This destroyed the previously popular Clinton health plan. Similar strategies have had a profound impact on Medicare legislation, particularly in regard to drugs, and on the patient's rights legislation to protect patients from HMOs. Citizens who genuinely understand the issues must rely on their own limited financial resources to market and lobby in the interests of the community. Their reasoned voices are drowned out in the noise.
One of the more successful strategies has been to deceptively create citizens advocacy groups. A variety of strategies are used to induce unsuspecting members of the community to enroll in what they believe is a body representing a good cause, but this membership is only a token. This allows the organisation to claim credibility in marketing, and to exert political pressure through lobbying. What is not disclosed is that the organisations are staffed by the industry and are entirely funded by the industry. The organisation represents the views of the industry and markets them under the guise of community. Massive advertising and lobbying activities are mounted to support or oppose legislation. The public is persuaded that this is in their interest and the politicians believe that they are facing a citizens movement. The drug companies have been particularly adept at this.
Hospitals and communities have many self help and advocacy groups associated with them - motivated people who do not always have a deep knowledge. They depend on community donations and fund rasing so are always short of cash. If they become critical of corporate practices they will link with others and become a political force.
Most of these groups readily accept donations from corporations which operate in their areas of interest. Their activities are soon dependent on these donations. This effectively neutralises them as critics. Pharmaceutical firms have been particularly good at "selling the claimed benefits" of their expensive new drugs to these groups. These groups then press authorities to include the drugs on Medicare and other drug listings.
Different sectors of the marketplace have specific interests and competitors soon band together in industry associations which they jointly fund. These well funded groups make political donations, employ lobbyists, and market, sometimes through "citizens groups" on behalf of the entire industry. These corporate associations exist at federal and state levels. They include the Federation of American Health System which donates and lobbies for the corporate hospital chains including Tenet Healthcare and Columbia/HCA. Its board members and committee members are drawn from these two and some other companies. Thomas Scully, its president was appointed to a senior position by president Bush. He was largely responsible for drafting the new Medicare legislation. He has now left this job to join a firm where his inside knowledge and expertise will be useful. It is apparent that to these people self-interest and the pursuit of their careers is paramount. Public service is more a means to a personal end than an opportunity to serve.
At a federal level industry groups lobby for their global interests using bodies like the business round table which meets regularly with government and the president. Medical groups are represented in the US Coalition of Service Industries (CSI), the business groups pressing for the inclusion of services like health and aged care in global trade agreements such as those proposed for the World Trade Organisation. In Australia bodies like the Business Council of Australia have considerable influence and press the corporate position
In addition to this corporations and sometimes their founders make donations and lobby federally or in strategic states where they operate. To overcome legislative limits on donations some have pressured all members of staff to make the maximum personal donation to a particular individual or political party.
In general the Republican party in the USA has been more sympathetic and more representative of the corporate community and has received more of the money, although both parties depend on corporate donations. In Australia both the coalition and the labour parties court the corporate dollar, although the coalition gets more. It is less constrained in the support it can give to the corporate sector than labour.
So it is little surprise that Modern Healthcare's inaugural list of the 100 Most Powerful People in Healthcare is topped by two of the individuals primarily responsible for overseeing the industry's most vital signs of life: HHS Secretary Tommy Thompson, who ranked No. 1, and his top deputy, Thomas Scully, the administrator of the Centers for Medicare and Medicaid Services and the second most-powerful person on the list.Together, these two top-level political appointees personify the synergistic, joined-at-the-hip connection between healthcare and government, crafting key policies, enforcing reams of regulations and providing $1 out of every $3 spent on this booming sector each year in the U.S.
They are the pillars of power, the linchpins of a far-flung, fragmented system with an almost dizzying array of heavyweight powerbrokers and influential organizations, most of which have found a spot on this year's first-ever attempt to catalog the real movers and shakers, based on a poll of Modern Healthcare readers
The 100 Most Powerful Modern Healthcare October 16, 2002
After a year-long investigation that involved conducting hundreds of interviews and reviewing thousands of pages of Federal Election Commission records, House and Senate lobbying and financial disclosure forms, and federal court records, we believe health care reform has become the most heavily lobbied, legislative initiative in recent U.S. history. In 1993 and 1994, hundreds of special interests cumulatively have spent in excess of $100 million to influence the outcome of this public policy issue.
Inside Lobbying for Health Care Reform (a1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY accessed in 1997
A recently released report on lobbying expenses for 1997 by the congressional watchdog group Center for Responsive Politics found that four hospital systems spent more than $400,000 on lobbying (each).
SYSTEMS TURN INTO BIG SPENDERS ON WASHINGTON'S LOBBYING SCENE Modern Healthcare January 04, 1999
A recurring and ongoing theme of discontent in the USA has been the association between politicians and corporate executives particularly health care corporate founders. Health care now spends more on corporate lobbying, political donations and marketing than any other sector. Hard headed business groups do not spend like this unless the money gets them what they want.
When I visited the USA in 1993 there were continual discussions on this issue. I was advised who could be trusted when I visited them and who received health care support and should be avoided. Those who could be trusted included Moncrief, Zafarelli and Morales in Texas. Schroeder and Stark in Washington. There were others but I do not recall the names. I corresponded and met with Moncrief. He was extremely helpful and opened his complete resource of material to me and his staff copied documents for me. He supplied me with copies of the legislation he was drafting and later sent me the completed legislation The political situation I was told was very bad in California as was New Jersey and I think Florida.
Misbehaviour is not a bar to corporate power and influence. Executives from Tenet and HCA featured prominently among the 100 most powerful in health care despite the shocking record of the companies they ran. The concept of probity, so important in health care has no meaning in the market.
This section looks more specifically at the behaviour in specific health related industries, their associations and by individual corporations. In writing about the individual corporations I concentrated on fraud, care and other misbehaviour. There is much written about politics and health. Some of it is on this site. I have not specifically researched these areas in depth. This section summarises what is on this site and gives links. They are illustrative and there is much more information out there.
Whom can the country turn to for an honest investigation? Democrats and Republicans alike are so beholden to accounting-industry money that they scuttled an attempt by Arthur Levitt, the former S.E.C. (US Securities and Exchange Commissions) head, to regulate conflicts of interest in companies like Andersen two years ago The United States of Enron The New York Times January 19, 2002
A good place to start is Wall Street, the centre of the US marketplace and its ideological heart. It is here that the share market is organised and administered. It is here that patterns of thought are established and corporate practices defined as legitimate. In many ways the USA and its politicians are hostage to Wall Street. The countries economic success flows on from this heart of the market. Every industry including health and aged care are influenced by this centre. The influence rapidly becomes global as most of those who operate here are multinationals. Successful strategies are adopted across their empires. It is particularly disturbing that these Wall Street multinationals have not only been repeatedly plagued by scandal and fraud but have been active participants in fraud committed by others.
Wall Street corporations have health care divisions and advise health care corporate giants on business strategies, even attending board meetings. Preliminary reports suggest that some of the Wall Street bankers and analysts have been active in health care fraud - at least in the HealthSouth case. One of the largest involved in health care is Citigroup and because it has bought hospitals in Australia I have used it as the focus in addressing these issues. Laws were passed to abolish older restrictions on conflict of interest to retrospectively legalise the mergers which formed Citigroup in 1998. A prominent politician became one of the most senior Citigroup officials while continuing to play a political role.
In a web page entitled "The Banking Marketplace" I have examined the flow of ideology and political power on Wall Street. The practical consequences of this are well illustrated by the political dealings of Enron, its auditors and of course its bankers. Some of this is described on the Enron page.
Tenet
Healthcare
Tenet (previously the disturbing National Medical Enterprises or
NME) has been involved in a succession of scandals relating to fraud
and the misuse of patients for profit. The founders market success
and philanthropy gave them enormous credibility and influence. Their
views influenced policy and they publicly debated medical leaders
like Dr. Arnold Relman whose views they considered obsolete. They
were given senior positions in universities and were invited to give
key speeches.
In New Jersey all staff in Tenet/NME facilities were according to one witness required to donate to the governors political campaign. In 1993 I met the chief state fraud investigator, a man with a very distinguished past history who was gunning for the company. Within minutes he spontaneously volunteered that this was his second job as he had retired early. He was financially secure and no one could reach him.
The health insurance group for the Department of Defense (DOD) in the USA was CHAMPUS. It was one of the insurance groups whose members were misused and which was most severely defrauded by Tenet/NME. Documents show that many complaints had been made but no action taken. In early 1993 there was a brief press report saying that the DOD had discontinued its investigation of Tenet/NME. At about the same time there was a press release that the senior fraud investigator in the DOD had resigned and joined Tenet/NME. This appointment Tenet/NME claimed was a reflection of their commitment to reform. He was to supervise their oversight practices. In June 1993 I had an interview with an officer from the DOD when I visited the Pentagon in regard to this fraud. There was some embarrassment when I raised the issue of NME's new appointment. I was assured that he worked in another section. They had not abandoned their investigation of Tenet./NME. Tenet/NME's new employee has not featured in any subsequent press reports that I have seen. His appointment did not prevent further misdemeanours.
Jeffrey Barbakow, the chairman of Tenet, and
likely architect of the second major fraud scandal, was one of
president
Bush's "Pioneers" - prominent people
who had raised more than US $100,000 for Bush's political campaign.
Columbia/HCA
Two members of the Frist
family dynasty (see also)
which founded HCA were republican members of the US congress. Bill
Frist was leader of the house in 2004. That Columbia HCA has paid US
$1.7 billion in fines has not dented the influence which its chairman
Thomas Frist holds or the political career of brother Bill.
Columbia/HCA also had very close political links in other states
including Nevada. This is addressed
elsewhere on this site.
Ten nursing home corporations gave at least $ 269,000 in campaign contributions in Florida last year. About $ 139,000 went to the Republican Party; about $ 86,000 went to the Democratic Party. The remaining $ 44,000 went directly to candidates.The Florida Health Care Association, a Tallahassee-based lobbying group, spread at least $ 33,000 among 50 candidates.
Crist feels heat over nursing home bill. The Tampa Tribune February 1, 1999
Large sums have been spent by nursing homes to persuade politicians to introduce legislation to protect nursing home chains from litigation and to increase funding. (see aged care review, some extracts in page of references 2000-2001, and a section in page of references 2001 to 2003)
The public, the press and the media have been
particularly vocal in California where politicians have been
repeatedly confronted with the money they received and their
protection of nursing homes. Reports claim that the attorney general
has not prosecuted offenders. The governor rejected health care
legislation requiring minimum staffing standards, refusing to sign
it.
Sun
Healthcare
"Throughout much of the '90s, Wall Street analysts touted the company's stock, and local business people cited Turner as a model of corporate success. ----------- Sun's aggressive growth won Turner a reputation as a visionary. ---------- On Wall Street, his name carried weight with analysts who thought Sun's stock was a golden investment ---------- one of the really exciting growth stories in the industry ----------- and doing a good job of keeping costs in line. (Turner's) reputation was as a very skilled operator -------- he was considered a guy who "thought outside the box, ------- Turner was the man of the hour.
From boom to bust. The Albuquerque Journal on 7 August 2000
Sun Healthcare was the big success story in
New Mexico and its founder Andrew Turner was admired. It donated
willingly and had close relationships with leaders in the community.
When nursing home chains including Sun Healthcare were faced with
financial collapse in 1999 it was the New Mexico senators who led the
charge to bail out these companies by changing Medicare funding.
Turner's strong but unfounded assertions that aged
care was overstaffed and inefficient,
and that government should butt out of aged care and leave it to the
market came at a time when these were beliefs integral to the right
in politics. They fell on receptive political ears and other
corporate chains followed. Turner was arguably a major contributor to
the massive understaffing and flight of previously motivated but
dedicated nurses into more congenial employment. The adverse
consequences for care across the entire nursing home sector in the
USA is now
well documented.
Integrated
Health Services (IHS)
The chairman of IHS was particularly well
known for his relationships with politicians and for the large sums
spent on donations and lobbying. The way money was paid for favours
was revealed when an influential politician was charged with tax
fraud. This sort of payment was legal and no charges of bribery or
other felony were laid. One of the IHS
pages describes IHS political dealings in more
detail.
Vencor
(now Kindred Healthcare)
Bruce
Lumsford founder of Vencor was a
friend of the governor in Kentucky and was active in state politics.
He attempted to run for governor in 2003 but his past record at
Vencor torpedoed his campaign and he withdrew.
Beverly
Healthcare
Beverly has been an active participant in political donations and in lobbying. It was at the forefront of a concerted corporate nursing home drive to get legislation passed to stop the law suits which were crippling bad nursing homes in Florida. Judges and juries were so appalled by what was revealed in court that they awarded massive punitive damages - the only time the chains have been held accountable. Beverly's story goes back many years to a political scandal in Arkansas when Clinton was governor.
There is more information about political lobbying and aged care corporations on one of the pages in the Genesis Health Ventures section
At any rate, soon Aetna and the Big Five insurers' new Alliance for Managed Competition would be beginning a full-scale lobbying, advertising, and public affairs campaign on health care reform, using both prominent names and well-placed insiders as their agents.
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Meanwhile, legions of the big insurers' political and public relations agents are at work both in and outside Washington.
Inside Lobbying for Health Care Reform (a1994 report on the lobbying which defeated Clinton's Health plan) by THE CENTER FOR PUBLIC INTEGRITY accessed in 1997
Atop the list in the insurers' category (100 most powerful) is Karen Ignagni, No. 30, president and CEO of the American Association of Health Plans, a high-profile, Washington-based lobbying group that represents more than 1,000 insurers providing coverage to about 150 million Americans, or more than half the nation's population."One of the most effective lobbyists for her group," Reinhardt said of Ignagni, pointing specifically to her successful effort in turning back congressional efforts to enact a patients' bill of rights. "She has turned out to be very, very powerful."
The 100 Most Powerful Modern Healthcare October 16, 2002
Political influence is seen by many to be the reason why health care legislation to control corporations and protect patients is repeatedly frustrated. Lobbyists and public relations firms are richly paid to influence and promote views which are not their own. They become very powerful not because of the rightness of the causes they cynically promote but because of their success in doing so. The giant insurers and their managed care subsidiaries have been at the forefront both in donating, and in employing lobbyists and public relations agencies to market the policies they favour to politicians and the public.
The insurers in the managed care marketplace are are among the most powerful in the health care sector. They played a prime role in defeating president Clinton's health care plans in 1993/4.
Managed care came under extreme pressure between 1997 and 2003 with a massive public backlash. There was extreme pressure for a patients bill of rights to control HMOs, and for repeal of the ERISA legislation which protected insurers from the legal consequences of their practices. The insurers faced lawsuits from state attorney generals, from doctors as well as multiple class actions from the community.
The amount of money spent by HMO's in pressing politicians to reject patient rights legislation and preserve the protection given by ERISA is vast. The bombing of the World Trade Centre took health off the public and the political agenda. Political influence resulted in the passage of legislation which gave the illusion of protecting the public but largely retained the status quo. By promising to behave better they settled with the attorney generals and the doctors. Legal strategies derailed the class actions. These matters are described in more detail on the second managed care page.
The pharmaceutical and managed care industries spent a combined $141 million last year, according to Public Citizen's analysis of newly released federal lobbying disclosure records. Drugmakers and HMOs hired 952 individual lobbyists in 2003 - nearly half of whom had "revolving door" connections to Congress, the White House or the executive branch. That's nearly 10 lobbyists for every U.S. senator.
Drug Industry and HMOs Deployed an Army of Nearly 1,000 Lobbyists to Push Medicare Bill, Report Finds Public Citizen June 23, 2004 <http://www.citizen.org/pressroom/release.cfm?ID=1733>
The pharmaceutical industry is the most profitable in the world and one of the most influential. This is in spite of an avalanche of fraud settlements and widespread public disapproval. Donations, lobbying, and marketing have all played their part. The reasons for the publics disenchantment and the political influence exerted are discussed at greater length on a page about the pharmaceutical industry. The prominent role they played influencing president Bush's recent Medicare Plus drug policy is examined in a report released by Public Citizen in June 1004. The full report can be downloaded from the Public Citizen link in the quote above.
A number of not for profit groups and individuals have taken a particular interest in these issues in the USA. The following organisations and web sites have carried important articles or reports analysing these issues. At the present time the focus has been on the corporate involvement in Iraq and the political links and dealings associated with that. Health care issues are less in evidence. As the names suggest common themes on these sites are integrity, openness, accountability and a healthy skepticism.
Center for Public Integrity: <http://www.publicintegrity.org>
CorpWatch or Corporate Watch: Try <http://www.corpwatch.org> and (http://www.corporatewatch.org>
Open Secrets: <http://www.opensecrets.org> and look at <http://www.opensecrets.org/lobbyists>
Public Citizen: <http://www.citizen.org> and look at <http://www.worstpills.org>
Common Dreams: <http://www.commondreams.org>
Truth Out: <http://www.truthout.org>
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.
Price competition, professional cooperation and standards MJA September 2, 1996 p 272 (by Dr. Peter Arnold, chairman of the Federal Council of the Australian Medical Association)
Australia, Canada, New Zealand and perhaps much of Europe differ from the USA in that they started with a more balanced form of capitalism often with socialist governments. They have tended to look more to my second form of democracy and capitalism paying greater attention to the less fortunate sections of society. Citizens were generally happy with the social services provided. The sort of democratic ideal and market in these countries differed from that in the USA. With the demise of communism and the ascendency of capitalist extremism countries have increasingly swung to the right and away from social services and responsibility for one another. In Canada this has split society with health care at the heart of the debate.
None have moved as rapidly in swinging to the economic right as Australia. Labour treasurer and Prime Minister Paul Keating was the first to abandon a socialist perspective of markets and government responsibility for essential social services by adopting economic rationalist thinking in the 1990s. The coalition government which succeeded him in 1996 was far more radical and embarked on a strategy of downsizing government services and contracting out almost every facet of social services to competitive marketplace groups. Not surprisingly this has not always been successful and in areas such as health and aging there has been considerable resistance.
The difference between the USA and Australia is that in Australia the marketisation of society has been led by political ideologists and economic theorists. Although the market was part of this and has embraced it enthusiastically they have not been the moving force. This is well illustrated in a policy speech given to the Australian Medical Association in 1996 by Dr. Wooldridge, the new minister for health, and another in 2000 to the world bank by Graeme Samuel, government appointed chairman of Australia's National Competition Council.
The extent to which "businessthink" has been adopted by governments as their primary paradigm of interpretation is reflected in their words - published every day in the press.
Particularly revealing is a little gem reported on the front page of the Courier Mail (March 22, 2000). The minister was asked about the suitability and the probity of appointing Tim Besley to review Telstra's services because of his close relationship with Telstra and with the privatisation of other government services. The government response from the ministers department was "At the end of the day, if you are going to attract people of calibre to conduct inquiries then they are going to be people involved in business". Ouch! What a give away! The rest of the population are not "people of calibre" - what an insult to the electorate!
A what if!
What if the federal government had succeeded in bringing all of the major multinationals into Australia and they came to dominate our health and aged care system. Then in designing a health system and evaluating its impact on citizens our government might have brought in "people of calibre" from healthcare's rogues gallery -- Richard Eamer and John Bedrosian from Tenet/NME, Richard Scott, Rainwater and, Thomas Frist Jnr from Columbia/HCA, Bruce Lunsford from Vencor, Robert Elkins from Integrated Health Services (IHS), Andrew Turner from Sun Healthcare, and of course Richard Scrushy from HealthSouth. Scrushy faces 85 charges of fraud in the USA and 18 senior staff including some from its Australian division have already pleaded guilty in the USA. All these companies, except Vencor and IHS, have received support when they attempted to establish themselves in Australia. They have all been recognised by the market as leaders of calibre in the international business of health care. Because professionalism has now been rendered passé there would not be any need for professional representation on this committee. Dr. Thomas Frist would represent the profession. As a businessman he is clearly a doctor of calibre.With a belief system so clearly spelled out in the government's own words we can understand that it had no choice but to take our health system away from suspect groups like the health professions and hand it over to "people of calibre" - big corporations. The move away from a public system run by elected citizens for citizens has been driven by these all encompassing "econocentric" belief systems. Theories of racial superiority have been replaced with ones of occupational superiority. Airy fairy value systems are obsolete and have been replaced with commodified health and aged care packages marketed directly to the public. This strategy has been adopted as an all encompassing self evident government policy.
There is a real possibility that our Dr. Wooldridge's policy was influenced by Andrew Turner in 1997/8. His public statements echoed Turner's views. NSW, the state where Sun was buying facilities opposed Sun's entry to Australia. Turner's Sun Healthcare could not have entered Australia without federal government support in overruling this objection. Without Sun, Wooldridge would not have been able to implement his plan to reform health care by using Sun's skills in "step down care".
That politicians and economists led the way is not to suggest that political donations, lobbying and marketing do not occur or that politicians do not move on to cushy corporate directorships when they have treated corporate interests well. Nor is it to suggest that leaders like Catchlove (Mayne Nickless) and Russell Snider (Health insurance) did not play a role. It is simply that corporate leaders seem to have played a less critical role in driving corporatisation. It is politicians who have sought business leaders out for government appointments - even making them head of departments responsible for regulating the market. They have struggled to find the businessmen and corporations needed to implement their economic health and aged care policies.
Multinationals become customers shopping for government support
It is therefore politicians who have courted large corporate groups and sought out multinationals, granting them favoured status, tax exemptions and discounts. State premiers have traveled the world competing with other states to bring multinationals to their states (e.g. Virgin Blue to Queensland). At the 2000 Olympics a special facility was built for politicians and business to entertain multinationals and so secure their involvement in Australia.
The consequence is that market competition has been turned on its head. Instead of competing to provide services to citizens big corporations become customers of the government who compete for their patronage. The same politicians and government departments that are responsible for regulating and controlling these companies are beholden to them for their custom. The context for regulatory vigour has been effectively compromised. Not only are the multinationals often wealthier than the state but they can threaten to remove their custom. The likelihood that government will act effectively to constrain corporate misconduct is remote. What happened in Queensland when a government department attempted to hold coal mining companies to their environmental contracts is particularly revealing.
In the USA a significant number of politicians are seen to be supporting corporate interests rather than acting in the interests of citizens. Attempts to address the problems in health care in the interests of citizens are frustrated by politicians acting in the corporate interest. The danger of this occurring in Australia should be emphasised because of the strong support politicians have given to health care corporations and their susceptibility to corporate coercion. The most glaring example is the support given to Mayne Nickless by the minister for health.
The frequent changes in Australia over the years, as the pendulum of government ideology swung from right to left federally and in the states, have not been helpful for health care. Labour's plans for a Nationalised Health System during the 1980s pale into insignificance when compared with the potential problems created by the diametrically opposed pressures of competition policy and the contracting out of government responsibilities to a corporate marketplace less than 10 years later.
Citizens and care givers have no sooner succeeded in defending themselves from one form of ideological extremism than they are challenged with a diametrically opposed and even more extreme ideology. The two party system ensures that health care is for ever trapped in the broad ideology of the current government. It can have no reason and no rationale of its own. There is a good case for taking health care out of politics and subjecting it to a different form of democracy.
The point I am contesting is the applicability of econocentric policy to all facets of society, and the marketplace as a suitable place for some of society's activities. Citizens instinctively recognise this. Outside the USA most governments have introduced privatisation changes in health care by stealth using less than candid marketing. They are well aware that their plans would flounder in the face of real public debate. Australia is a good example.
I have promoted some tentative ideas about a possible system which, unlike the economic model is simple in concept, combines many of the benefits of a public hospital system, particularly cost, and adds the advantages of the successful not for profit system we already have. It allows government to disengage from health care. It keeps both government and the market at arms length and lets everyone get on with the business they are good at - cooperating in looking after patients. It offers the prospect of doing this without unnecessary distractions from prevailing ideology or the need to squander time and effort competing for the money which should be going to care for patients. It takes democracy to newer levels of representation and fosters a civil society.
The story of the corporatisation of health care in Australia is more fully described on the "Corporate Medicine in Australia" page. There is more with some duplication on another page. A brief outline and links to other pages relevant to the role of governing politicians is given below.
The consequence of economic belief systems and ideology for health care in Australia were recognised by Ron Williams who predicted the course politicians would take in his 1992 book "Remission Impossible". In my 1993 submission to Justice Yeldham's license determination in regard to National Medical Enterprises (now renamed Tenet healthcare) in NSW I analysed the political and market forces at work. In an attempt to prevent it happening I predicted the justifications which would be used to give politicians what they wanted and then refuted them. What happened in Australia and the role politicians played is described on another Tenet/NME page.
Governments supported Tenet (then NME) when it entered Australia in 1991. Justice Yeldham granted hospital licenses tied to negative comments and imposed conditions in September 1993. Governments then led the way in NSW, WA and federally, joining with the banks in supporting NME financially. NME had recently paid US $200 million to settle allegations of fraud in the USA.
Support for multinationals in Australia remained strong and the foreign review board hurriedly and without investigations approved the entry of General de Sante Internationale (GSI) when Tenet sold its hospitals. Despite its poor record Columbia/HCA's arrival in Australia in 1997 with a $1 billion war chest was welcomed. It wasn't until the FBI raided hospitals across the USA that enthusiasm evaporated. There was no public condemnation by politicians.
By now government plans to bring in multinationals were in disarray and the extent of their pain is reflected by the decision to bring Sun Healthcare into Australia to introduce step down care over the objection of NSW, the state where Sun were buying. The FIRB process was used and possibly abused for this purpose. The decision was made by the government itself. FIRB were at pains to stress that they were only an advisory body.
There is a page in which I describe the governments attempts to introduce managed care into Australia and my attempts to frustrate that and to force Sun Healthcare out of Australia. This gives some insight into political behaviour in Australia.
Deficiencies in the Foreign Investment Review Board (FIRB) process allowed unsavoury groups to enter Australia. Limitations in most states' laws prevented authorities from effectively using their probity requirements to exclude unsavoury healthy care multinationals once FIRB had allowed them in. These problems were recognised in 1993 but state and federal governments have refused to give FIRB the needed powers or to give states the legislative backing to allow them to reject multinationals. Instead they seem to have manipulated the system to bring Sun Healthcare in through the loophole. Australia's track record in regard to effective government regulation is reviewed elsewhere.
When Sun's credibility collapsed and it ran into problems with probity in Victoria the government turned to Mayne Nickless, a company with a criminal record. Mayne staff were appointed to senior government positions. At the same time the government actively supported the corporate sector by driving Australian citizens back into the private sector using coercion and bribes - such as subsidising private health insurance with large amounts of tax payers money. At the same time the public system was underfunded so that waiting times and services suffered. Citizens had been steadily abandoning private medicine for the less costly and popular public system. This was not part of the market plan.
In addition to this the government unsuccessfully adopted a policy of contracting the care of public patients and the running of public hospitals to Mayne Nickless and other private groups. They lent further support by encouraging private groups to run private hospitals on public hospital campuses. These policies were marketed to the public but did not prove popular. It did not work and the experiment was abandoned.
The corporatisation of laboratory and radiology services was strongly supported but the government and the health minister were burnt when the scan scam was exposed.
The corporatisation of general practice in Australia was not a government initiative. It came from the market. Those who provided services ordered by doctors sought to own and control the doctors on whose support they depended.
The pharmaceutical industry has resented the control of prices by the Pharmaceutical Benefits Scheme and has attempted undermine the process. They obtained the ear of the minister who made changes giving the corporate sector more power and input. Several members of the committee resigned in protest.
