Sun Healthcare enters Australia
Overview
Sun is a giant US multinational which provides aged care, home care,
step down care, managed care and pharmaceutical services. It
purchased a major holding in Alpha Healthcare and the Moran Group in
June 1997. Most of the facilities it purchased were located in New
South Wales (NSW). Sun made the mistake of revealing its planned
entry to the press. Some Australians were already aware of the fraud
investigation and immediately made inquiries. Information was
supplied to relevant authorities. It is unlikely that future
multinationals will release information until their entry into
Australia is a fete accompli.
August 2003 note There are two pages which argue the case against allowing Sun into Australia. I had considered making summaries of these long pages or deleting large sections but there are bits of historical interest and deleting sections made it very tatty so I decided to leave them as is. Instead I will modify this page to give more information and put a copy of the main contents list here.
These are
Sun Healthcare an
assessment
This assessment prepared in November 1997 provides all the background
information needed for anyone to make an assessment of the
desirability of corporate medicine, of US corporations in general and
of Sun healthcare in particular. It stresses that Sun has not been
proven guilty. It argues that the allegations are such and our health
system is so vulnerable to US style business practices that we need
to act to protect Australian citizens.
Sun Healthcare
documents
This accompanied the large set of documents used to support the
arguments against Sun's entry into Australia. It lists the documents
and comments on them. It contains a large number of documents
released by FIRB under FOI legislation. It is highly critical of the
political processes used to bring Sun into Australia.
Criticisms of
Alpha Healthcare letter to FIRB regarding aged care nursing
homes
This letter from Alpha dated 5 August 1997 was only released by FIRB
under FOI some time after the original documents. I felt that the
terms used and the content of the letter showed exactly that misuse
of language about which John Ralston Saul was so critical. I called
it "NMEspeak" when I first encountered it in Tenet/NME documents in
1992. In addition it clearly indicated that Sun and Alpha were very
interested in providing aged care nursing homes. I wrote a strong
criticism of this letter in February 1998 and sent it to relevant
authorities with a copy of the letter. The documents were also sent
to the federal department of Health and Family Services which
licenses aged care nursing homes. They had indicated to me in 1994
the steps which they normally took to inquire into the probity of
nursing home licence holders.
The concerns about Sun Healthcare in 1997 related primarily to its aggressive business practices, its disturbing policy statements, the strongly supported allegations of dishonest behaviour and the US federal governments fraud investigations. If you like you can go directly to a list of the concerns at this time. I did not have information documenting the standards of care in Sun facilities. These came later.
How Sun was brought into Australia:- A very remarkable "Yes Minister" political exercise was used to bring Sun into Australia. The federal Minister for Health, Dr Wooldridge has responsibility for the integrity of medicare. His department was asked to comment on Sun's suitability by the Foreign Investment Review Board (FIRB) which advises the government on foreign investors. He was personally advised that Sun was under investigation by the FBI for allegedly defrauding medicare. He refused to comment on the basis that private hospitals were licensed by state governments and this was a state matter. When New South Wales objected to Sun's entry Dr Wooldridge's junior federal government colleague the deputy treasurer took the decision to overrule the objection and allow Sun into Australia. FIRB would not disclose their advice but have indicated very clearly that they are an advisory body only and that the decision was made by the deputy treasurer.
How strange that the minister's department does have responsibility:- The documents reveal that Sun was purchasing pathology laboratories and that these are licensed by the Health Insurance Commission, a federal government department. Worse still the correspondence quite clearly shows that Sun intends to involve itself in the nursing home business. Nursing homes are licenced by the federal department of health and family services, Dr Wooldridge's own department.
Policy priorities behind this decision:- The government is pursuing a policy of contracting the care of public patients to private corporations and of increasing the number of patients using private hospital facilities. During 1997 government had attempted to reduce its financial involvement in nursing home care by legislation which reduced government subsidies and forced the aged to use up their life savings. While a public revolt prevented the full implementation of this policy, a viable set of paying customers was created for private nursing home operators. Two months after Sun's entry Dr Wooldridge announced his new plans to "revolutionise" health care by building step down hospitals. Step down or subacute hospitals are a Sun specialty and this service is provided by Sun in its US nursing homes. Sun's chairman promotes it as the way to reduce the costs of health care in the USA.
Remission Impossible:- We must ask how severe our Dr Wooldridge's political pain was and whether Sun saw "silos of opportunity" in selling its solutions to our health care system to him. In his depressing 1992 analysis of the future of the health system in Australia, "Remission Impossible" Ron Williams, a financial analyst predicted that Australian politicians would see the US corporate system as the solution to the problems in our health system. He predicted that very soon decisions about the sort of health care given to Australians would be made, not by doctors caring for the patients but by businessmen sitting in US board rooms. We are entitled to ask whether decisions about health care in Australia are already being made in Sun's board rooms in New Mexico. Is it any wonder that the Australian public has become so distrustful of politicians?
