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Wenkart
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Tom Wenkart, a colleague of Goldridge and the
infamous Edelsten founded Macquarie Health, a
complex set of companies built around a large
pathology business but including hospitals, medical
clinics and a medical technology business. Like the
other two doctors he indulged in controversial
practices, ran into trouble with the tax office and
became bankrupt.
and
Macquarie Health
Three doctors were among the driving medical entrepreneurs of the 1970s and 1980s; the infamous Geoffrey Edelsten, the self destructing Ian McGoldrick and Tom Wenkart, the founder of Macquarie Health. Like McGoldrick, Wenkart started commercial life in partnership with Edelsten but then parted and went his own way. All three indulged in controversial practices, ran companies into the ground and became bankrupt.
After his first venture with Edelsten collapsed Wenkart turned to pathology and this became his primary business enterprise. He also owned a number of hospitals as well as a large chain of medical clinics. He got caught up in the enthusiasm for US style Taj Mahal medical complexes that planned to make money from the rich of Asia.
Wenkart and his companies were caught up in crippling disputes with the tax office; disputes which he resolutely appealed all the way to the high court and lost.
When Wenkart's pathology business was in serious financial difficulties and under investigation for unsavoury practices it was sold to Mayne Nickless in 1998. Wenkart became bankrupt.
The most recent report I found about Macquarie Health was in February 2004. It indicated that the company still operated 5 hospitals in NSW but it is not clear what role Wenkart plays in this. I could not find any recent reference to the medical clinics run by the company.
BACK in 1971 Tom Wenkart and his partner Geoffrey Edelsten were known as Tom and Jerry, the whiz-kid doctors.
1989 - Review of 1971 origin with Dr Edelsten
Aged just 26 and 27, the pair revolutionised suburban medicine in Australia by founding Preventicare - a computerised medical diagnostic service for GPs.
It was a short business association of just 15 months with Preventicare forced into provisional liquidation.
The failure saw the two entrepreneurs drift into different areas of medicine.
LUXURY HOTEL TO GO NEXT TO CITY HOSPITAL Sun Herald November 19, 1989
The Macquarie group includes pathology services, private hospitals, medical centres - such as the Health 24 group - microfilm production and computer hardware and software. Its ultimate holding company is Traknew Holdings (Wenkart spelled backwards.)
1994 The business
WENKART TAKES TAX BATTLE TO HIGH COURT Australian Financial Review May 6, 1994
Macquarie Health Corporation wholly owns Macquarie Pathology Services and Health 24, while Macquarie Hospital Services controls private hospitals including Delmar, St Marys, Manly Waters, Eastern Suburbs Private Hospital(formerly Netherleigh) and United Gardens.
1996 The business
The pathology business - by far the most profitable, with 1993 operating revenue of $33.3 million - arose out of Preventicare, a pathology company formed in 1971 by Dr Wenkart and Geoffrey Edelsten, then a doctor. Dr Wenkart later bought out Edelsten's interest.
The Macquarie group encompasses about 70 different trusts, partnerships and companies.
After Seven Years, RPA Hospital Plan 'a Shambles' Sydney Morning Herald June 17, 1996
It's (Macquarie Pathology) the heart of a giant medical empire, which runs several private hospitals and a network of medical centres up and down the eastern seaboard.
1998 The business
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The Macquarie Group is one of Australia's biggest private medical corporations and it is run by Dr. Tom Wenkart. It runs hospitals, medical centres and a pathology service and spans three states and the Capital Territory. This group is now plagued with on-going business difficulties including multi-million dollar debts to banks and the tax office.
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The medical empire is an interlocking network of companies run by little-known Dr Tom Wenkart, the former partner of Australia's most infamous medical entrepreneur, Geoffrey Edelsten. Edelsten of course, has since spent time in jail and was de-registered as a doctor.
Macquarie Group under Tom Wenkart is experiencing difficulties Radio National March 3. 1998
Wenkart generally kept well out of the limelight but the reports suggest that like his co-entrepreneurs he was supremely self confident and failures were seldom his fault. Some of his ideas such as the Taj Mahal at Royal Prince Alfred Hospital were singularly unrealistic. He had the charisma to sell his ideas and to persuade politicians and senior bureaucrats to join his companies.
His bitter dispute with the tax office in the face of damning criticism is reminiscent of McGoldrick's battle with the Medical Board.
The reports of his various activities on this page give insights into the man.
So who is Tom Wenkart, the man behind Macquarie Health Corporation which will build the new facility he describes as "the hospital of the 21st century"?
1989 Wenkart on top
Colleagues described him as a livewire now in his mid-40s. Wenkart has had two heart bypass operations while successfully juggling a marriage to wife Christine, four children, a home in Killara on Sydney's leafy North Shore, and a multi-million dollar business.
In a recent report in Australian Dr Weekly Dr Wenkart commented on his association with Dr Edelsten just a few years after Wenkart graduated from Sydney University's medical school.
"We were together for a very short time - it was only 15 months," Dr Wenkart said.
"But what we created in 15 months was enough for a lifetime.
"The truth is if he (Dr Edelsten) had understood what my skills and strengths were and had listened to me - as he did from time to time - he would have kept himself in check and what we created would have been unique."
Dr Wenkart said a person in business should be realistic.
"One of my best learning curves was in the days of Preventicare - I learnt 20 years of business in a year and a half," he reflected.
"That was as close as I have been to the pits and I can tell you right now I kept all that knowledge. I didn't forget it."
LUXURY HOTEL TO GO NEXT TO CITY HOSPITAL Sun Herald November 19, 1989
As his empire collapsed around him stories of his management style made by disgruntled ex-employees, if true, suggest a personality not dissimilar to that of some of the founders of the worst US companies. His charisma and persuasiveness, his drive, his controlling personality and his tendency to rationalise and then resort to angry outbursts when confronted are all suggestive of the personality characteristics I have described in a number of US medical entrepreneurs.
Tom Wenkart's empire now has troubles of its own, with multi-million dollar company debts to the tax office and the banks, plus an investigation by the health authorities into alleged inducements offered to doctors.
1998 Wenkart under pressure
And now a former colleague has decided to speak out about life inside the ailing corporation. ABC reporter Ray Moynihan has this special portrait of a medical entrepreneur whose business is facing a few too many health problems of its own.
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Steve Flecknoe-Brown (past manager at Macquarie Health): Every point along the way it (tax dispute) was fought resolutely, doggedly, and the result was that every avenue of appeal had been exhausted by last year. It also resulted in the tax man being in a very ugly mood.
-----------------------------
But one of the key questions for those looking to buy is what role Tom Wenkart would play in any new Macquarie Corporation, and it is fair to say his personal style has not endeared him to many within the health care industry.There is also a high turnover of senior staff at his Sydney headquarters; among those coming and going have been former Health Insurance Commission official Dr Ron Tomlins, and former Liberal Senator Bob Woods, who joined Tom Wenkart's team soon after leaving Parliament under a cloud.
---------------------------
Steve Flecknoe-Brown: What we found a person who wouldn't let go of the control of the company; he wouldn't delegate any authority within the company, and we found that that was, at least for my part and for the part of the people I've spoken with since then, is not consistent with our standards of authority and our standards of responsibility.Ray Moynihan: What sort of a person is Tom Wenkart?
Steve Flecknoe-Brown: Oh look, he's a charming fellow. He's a highly intelligent, extremely driven man. That at his best, leads to a man who can captivate a whole room full of people and lead from the front. There's no doubt about that. But at its worst, when things aren't going right, when there's a lot of pressure on, and you can imagine how much pressure does build up in an organisation that's turning over $50-million or $60-million a year and there's no delegation of responsibility, every decision comes through that desk. You can imagine how much pressure builds up and at those times, the atmosphere is unbearable.
Ray Moynihan: In what way?
Steve Flecknoe-Brown: Explosive temper outbursts, bullying, the sort of mental intimidation that makes it extremely unpleasant to work. And again, if you actually felt you were achieving something in that environment you keep going, but most of the senior managers felt, when I was there, totally emasculated, totally unable to make a decision. And as a result, why put up with the unpleasantness when you're getting nowhere?Ray Moynihan: Steve Flecknoe-Brown is not a disinterested player. He left Macquarie under bitter circumstances which also involved legal action, and he now sees himself as a potential saviour for the ailing empire. He wants the problems facing this large business publicly debated, because he says all the signs indicate a corporation in distress.
--------------------------------
No doubt Tom Wenkart has been feeling the pressure. So much so that about a year ago he grabbed and pushed one of his senior pathologists during a verbal confrontation. While the attack didn't result in any physical harm, the pathologist involved took the precaution of filing a police report at the local station, just in case anything like it happened again.
---------------------------------
Steve Flecknoe-Brown: The questions I asked were answered in glib, dismissive fashion, and I was in no position to exercise any power to change the arrangements that were already in place.
--------------------------------
The fact that a colourful and energetic entrepreneur like Tom Wenkart can run what at its height was a $100-million health care company, and remain virtually unknown, is strong evidence that Australia could do with a lot more public scrutiny of those who profit from the sickness of others.
Macquarie Group under Tom Wenkart is experiencing difficulties Radio National March 3. 1998
A shaky business:- The engine for the Wenkart empire was the pathology business, the largest in NSW. It developed from the failed Edelsten/Wenkart venture Preventicare, taken over by Wenkart. There is little early information available about the pathology business other than its size and high financial turnover. This changed when the pathology division started losing money, when its income tax problems were exposed, and when some very questionable practices created a furore.
Meanwhile, Tom Wenkart slogged away attracting little publicity while his company, Macquarie Pathology Services, became the largest pathology service in NSW.
1989 Growth of the business
LUXURY HOTEL TO GO NEXT TO CITY HOSPITAL Sun Herald November 19, 1989
Despite Macquarie Pathology's substantial revenue, it reported a loss last year of $944,000. Macquarie Health Corporation's latest annual report (for 1993) shows a net loss of $26.8 million.
1994 Losses
WENKART TAKES TAX BATTLE TO HIGH COURT Australian Financial Review May 6, 1994
There was considerable publicity when two doctors revealed that Macquarie had offered them free computers and software. While the company seems to have have rationalised their position, it was a clear breech of medical ethics and almost certainly the law. It would have placed doctors in a position where they would have been pressured to use Macquarie laboratories. To their credit pathologists, and the industry condemned the practice and urged authorities to prosecute.
The pathology industry has demanded a government inquiry into one of the largest pathology companies in Australia amid allegations that the company has "induced" doctors to use its services.
1996 Free computers for doctors
Sydney doctors have alleged that the company, Macquarie Health Corporation, has been trying to win business by indirectly offering the use of computer systems worth thousands of dollars.
But the corporation said its companies had offered the systems only to smooth the transfer of information between its laboratory and the doctors.
An internal memo says the corporation had legal advice that its offers were not illegal but knew that the industry and the Government perceived it was "providing inducement".
The offers were made through a related company, Australian Healthnet Services.
Dr Tom Wenkart, a prominent medical entrepreneur, is a director of both companies.
---------------------------
Dr Tania Chernih and Dr Sophie Bernard, both of Sydney, said they rejected offers by the companies of the free use of hardware and software."They made it quite clear that there would need to be the substantial use of Macquarie's pathology services. I have no doubt that the offers were an inducement," Dr Chernih said.
One offer included practice management software unrelated to pathology information transfers. Dr Chernih she was told 400 doctors had accepted the free use of computers.
According to the ABC's 7.30 Report, the general manager of the corporation, Mr Ron Tomlins, said the offers stopped in August. Dr Chernih said she was approached again last Friday.
Mr Tomlins said: "I don't accept that the computers are in return for pathology." He said the corporation was trying only to improve the efficiency of its operations.
The Australian Association of Pathology Practices, which represents 65 per cent of the industry, said yesterday the practice was "a clear breach of the Health Insurance Act".
Inquiry Call Into Pathology Company Sydney Morning Herald October 2, 1996
Selling the Pathology Business:-
As the financial situation deteriorated Wenkart was forced to sell the pathology business but it seems that like McGoldrick, his continued involvement may have been a sticking point. In 1998 Mayne Nickless bought the business.
This group is now plagued with on-going business difficulties including multi-million dollar debts to banks and the tax office.
1998 Trying to sell
-------------------------------
For some time now he's been looking for new partners for Macquarie, but it's understood now that the whole business is being offered up to the market; with an estimated turnover in excess of $50-million potential buyers are currently weighing up their options. Any sale could have major flow-on effects for the entire private health sector across Australia, particularly if it is subsumed within a larger conglomerate.But one of the key questions for those looking to buy is what role Tom Wenkart would play in any new Macquarie Corporation, and it is fair to say his personal style has not endeared him to many within the health care industry.
Macquarie Group under Tom Wenkart is experiencing difficulties Radio National March 3. 1998
MAYNE Nickless yesterday boosted its presence in the fast-growing pathology services market by purchasing the NSW-based Macquarie Pathology for an estimated $45 million.
1998 Mayne buys pathology business
----------------------------
The purchase of Macquarie adds 45 pathology centres to HCA's existing NSW network of Hampson Sugarman Pathology, which was bought in 1995 and has a strong regional presence in the Hunter, North and Central coasts as well as southern Sydney.
Mayne's HCA gets booster The Australian August 5, 1998
The free computer scandal melts away:- That the investigation of this scandal was ongoing was documented in August 1998. In 1998 Mayne Nickless purchased Macquarie's pathology business. At the same time Mayne Nickless' Dr Barry Catchlove was made chairman of the investigating body, the Health Insurance Commission (HIC). There are no further press reports about the computer scandal. This must be considered in the light of the September 6, 2004 ABC Television Four Corner's claim that health care fraud was much higher than official estimates. This was because it was not in the health care industry or in politicians' interests to expose fraud or to prosecute offenders. Responsible government authorities had been politicised. The minister had little interest in giving the HIC greater powers to investigate and prosecute.
The pressure on Tom Wenkart continues, with an ongoing investigation by health authorities.
1998 Investigations
In 1996, two Sydney GPs told the ABC's 7.30 Report that officers from Macquarie were offering them the free loan of expensive computers through a related company, to enable them to send some of their pathology work to Macquarie. At the time of the revelations, company officials vigorously denied the computers were being offered as inducements.
But authorities launched an investigation into possible breaches of the Health Insurance Act, which prohibits inducements, and under bribery provisions, carries a penalty of five years jail.
Macquarie Group under Tom Wenkart is experiencing difficulties Radio National March 3. 1998
According to the HIC's corporate plan, its tasks include policing inappropriate practice and fraud in pathology. Dr Catchlove's appointment has therefore raised questions in the medical community about a conflict of interest.
1998 Catchlove's appointment to HIC
Mayne's Strength Raises Eyebrows Sydney Morning Herald August 8, 1998
This was another cause for concern for those critical of Dr Catchlove's appointment. Two days before he became chairman, his company bought Macquarie Pathology, effectively taking control of 20 per cent of the $1billion pathology industry.
1999 The HIC, Catchlove and fraud
For the past 10 years the pathology industry has been plagued by rumours and allegations of rorting. Dr Catchlove was one of the fiercest critics.
It's the job of the HIC to investigate any and all of these allegations.
Unfortunately, because the commission lacks the power to press criminal charges, all these allegations must be referred to the DPP. There have been fewer than three successful prosecutions.
An obvious solution would be for the HIC to be given the same powers to investigate and prosecute as the ACCC. However, despite being very concerned about this situation the Minister for Health maintains that the question of extending the powers of the HIC has never been raised with him.
Catchlove Conflict Inevitable Australian Financial Review October 30, 1999
As one looks at the problems with the tax office, the persistence with which Wenkart fought the assessments, and the comments of the judges one wonders how much of Wenkart's success was based on his personal interpretation of tax law. Edelsten and McGoldrick had similar issues with the tax office and behaved similarly.
ONE of Australia's leading pathologists went all the way to the Full Bench of the High Court this week in the latest round of his 10-year battle with the Federal Commissioner of Taxation.
1994 The tax battle
Dr Thomas Richard Wenkart, head of the $33 million-a-year business Macquarie Pathology Services , was in the High Court on Tuesday alleging that the commissioner was double-assessing two of his companies.
Dr Wenkart, 50, a Sydney GP who launched his pathology and private-hospital empire 20 years ago, is also fighting tax cases in the Federal and Supreme courts.
And he is expecting an outcome on a fourth legal front within days, as Justice Smart of the NSW Supreme Court hands down his judgement over an incorrect Pap-smear report on Ms Rhonda O'Shea. She was diagnosed as having cervical cancer four months after a Pap smear had been incorrectly analysed as negative by Dr Wenkart's Macquarie Pathology Services. Ms O'Shea is suing the company and her GP, Dr Susan Sullivan.
Macquarie Pathology is part of the Macquarie health group, which encompasses 70 separate trusts, companies and partnerships.
Two of these entities, Richard Walter Pty Ltd, the company's cashbox, and Morlea Professional Services Pty Ltd, were in the High Court on Tuesday alleging that the commissioner acted in bad faith by double-assessing the companies and had not formed a conclusive view as to which company was liable
In the Federal Court, Richard Walter, Morlea, and another Wenkart entity, Linwood Finance, are also fighting six tax cases relating to the income years 1981 to 1989.
And in the NSW Supreme Court, the commissioner is seeking recovery of taxes from Wenkart companies for the years 1986 and 1989, and from 1981 to 1984.
-----------------------------------
The Australian Taxation Office began a tax audit of the entire Wenkart group in 1988 and has prepared a report which canvasses various tax arrangements which, the report says, were used by Dr Wenkart to eliminate income received by the pathology laboratory in the fiscal years 1981 to 1988 inclusive.
WENKART TAKES TAX BATTLE TO HIGH COURT Australian Financial Review May 6, 1994
A year ago, Justice Tamberlin of the Federal Court found that this company, Richard Walter Pty Ltd, had engaged in "sham" deals aimed at avoiding tax on nearly $10 million of income. The deals by Richard Walter, the group's cashbox company, were part of "a series of elaborately ... contrived tax avoidance structures". Richard Walter was to have paid the Australian Tax Office the back tax, plus penalties and late payment fees, amounting to approximately $10 million.
1996 The tax office wins
However, the company appealed the decision earlier this year. On Friday, the appeal was dismissed by a two-to-one majority after being considered by three Federal Court judges.
After Seven Years, RPA Hospital Plan 'a Shambles' Sydney Morning Herald June 17, 1996
Along the way, one Federal Court judge referred to the case as 'an essay in tax avoidance, naked and unashamed'.
1998 Damning comments
Macquarie Group under Tom Wenkart is experiencing difficulties Radio National March 3. 1998
When the tax battle was lost some of the Wenkart companies entered liquidation and so did Wenkart a year later (1999). The pathology business was sold to Mayne Nickless.
One of the Group's companies is currently being liquidated, and faces an estimated $20-million tax bill, on top of bank debts. And there's an ongoing official investigation into Macquarie's pathology arm; and as if that's not enough to worry about, Dr Wenkart's grand plan to build a state-of-the-art private hospital adjacent to the University of Sydney, is looking increasingly untenable.
1998 Companies bankrupt
----------------------------------
The news couldn't have come at a worse time. Tom Wenkart has only very recently lost a long legal battle with the tax office, involving one of his companies called Richard Walter. Richard Walter is a combination of the middle names of Tom Richard Wenkart and Geoffrey Walter Edelsten, who were business partners back in the 1970s, before going their separate ways. A decade later, Edelsten ended up deregistered and served a brief stint in jail, before re-making himself as a lawyer and businessman. Wenkart went on to build a giant medical empire, of which Richard Walter was one of many inter-related companies.
Now, Richard Walter is in liquidation, facing an estimated $20-million in bill in unpaid tax, interest and penalties, and a multi-million dollar bank debt.
Macquarie Group under Tom Wenkart is experiencing difficulties Radio National March 3. 1998
Last October, Dr Wenkart, 56, was declared a bankrupt and resigned as a director of the company.
2000 Wenkart bankrupt
Wrangling Puts End To RPA Plan Sydney Morning Herald March 25, 2000
In 1994 the hospital arm of the company owned six hospitals and I did not find records of any subsequent sales or purchases. In 2004 they are recorded as running 5 hospitals but it is not clear what interest Wenkart retained in this business.
It is likely that this small company had little leverage and consequently was squeezed in negotiations with insurers. In 2003 they tried to take on Medibank Private. I don't know the outcome.
Macquarie Hospital Services controls private hospitals including Delmar, St Marys, Manly Waters, Eastern Suburbs Private Hospital(formerly Netherleigh) and United Gardens.
1994 The hospitals
WENKART TAKES TAX BATTLE TO HIGH COURT Australian Financial Review May 6, 1994
DELMAR Private Hospital has refused the latest contract offer by Medibank Private in a bid to "keep the bastards honest".
2003 Threatening Medibank
Tom Wenkart, chief executive of Macquarie Health Corporation which owns the Dee Why hospital as well as Manly Water Private Hospital, said the increase offered to their contract with the health fund this year was "grossly unfair".
----------------------------
Dr Wenkart said if they could not come to an agreement with the health fund, Delmar Hospital would not re-sign a contract when the current one expired at the end of this month.
Delmar's contract wrangle. Manly Daily June 24, 2003
Macquarie Health runs five private hospitals throughout Sydney and has an active web-based IT division.
2004 Still owns hospitals
PREDICTIONS 2004 - PART TWO OF TWO The Australian February 10, 2004
Macquarie Health had a Medical Informatics division and was active in developing software which it tested and used in its hospitals.
GEORGE MARGELIS
2004 Computer technology
Medical informatics director, Macquarie Health CorporationUsing .NET should enable Macquarie Health Corporation to automate processes such as pre-admission and discharge. The project will swallow about 30 per cent of its budget, but George Margelis says its biggest expense will be personal health records software development, which accounts for about 60 per cent.
"We think .NET will be the way to go, but wireless is pretty big in healthcare," he says. "Then comes integration and the use of XML."
Personal health records will be controlled by patients and will allow seamless integration of data from multiple healthcare providers.
"We are also working on yourdiagnosis.com, which is an online medical history program," Margelis says. "It will also link with the personal health record."
The corporation is looking at mobile-equipping most of its hospitals.
"We looked at using PDAs with wireless and we had all sorts of problems with the range. We are looking at putting a lot of our clinical data-gathering stuff on smart phones so we can use them in a patient's home or at the patient's bedside. The beauty now of .NET is that there is not a lot of extra development work needed on the small-screen stuff."
Margelis says he expects to hire more development and testing staff this year. He says the hot issues will be security -- especially as applications are starting to roll out to mobiles -- data integration and migration.
PREDICTIONS 2004 - PART TWO OF TWO The Australian February 10, 2004
There is a brief outline of the failed colocation at the Royal Prince Alfred Hospital on the NSW privatisation page. Here I am more interested in the thinking and behaviour of the company and of Wenkart.
Wenkart was caught up in the wild enthusiasm to build grand medical parks and entice the wealthy from surrounding countries into them. His charisma and persuasiveness are revealed in the support he received from politicians and government administrators some of whom subsequently joined the company. He somehow induced politicians to award him an open ended contract to build the colocation at the Royal Prince Albert - and secured startling commercial in confidence undertakings. This contract subsequently caused many problems and was heavily criticised. Its content was never made public.
Wenkart succeeded in getting government to overrule local council objections to his doubling the size of the proposed hospital. He later went back to the original size claiming the original idea was uneconomic. There were endless delays and legal confrontations over a 10 year period. He never built the hospital. He eventually advised authorities that he wanted out, and then sued them when the contract was cancelled.
Now Dr Wenkart's company has been selected by Health Minister Peter Collins for a plum project to build a luxury 200-bed private hospital on public land next to Royal Prince Alfred Hospital, Camperdown.
1989 Wins contract and expresses his dream
Dr Wenkart believes this project will attract him international attention.
Instead of dull hospital wards, patients at the $180 million hospital will stay in a five-star hotel.
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PAP will be a high-tech hospital and include medical and surgical facilities, a 14-bed intensive care unit, a four-bed coronary care unit, 16 operating theatres, a 24-hour seven-day medical centre and emergency clinic, a car park for 1,200 cars, 24-hour dining facilities, retail shops, banks, and conference facilities.
----------------------------
Last week Dr Wenkart said negotiations for financing for his $180 million PAP development were "excellent".He said there were investors in South-East Asia ready to put up money immediately without knowning the financial details.
LUXURY HOTEL TO GO NEXT TO CITY HOSPITAL Sun Herald November 19, 1989
Doctors Wenkart, Ruscoe and Bryant contemplated planeloads of overseas tourists on a health pilgrimage to their luxury hospital resorts. The vision was state-of-the-art Taj Mahals offering high-tech medicine, all funded by private health insurance.
1992 The dream and political support
------------------------------
One investment banker sniffs: "These private hospitals were designed as Taj Mahals. The men behind them are salesmen with a vision. These things are designed as monuments to them. They are over-engineered and over-capitalised. You can buy private hospital beds now for under $100,000, but these new ones were costing $200,000 to $300,000 a bed to build."
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It worked like this: the areas involved called for tenders and awarded the successful bidders 99-year leases in return for up-front payments or a "land premium." The developers paid a refundable 10 per cent, with the balance due when the lease was signed and their rights taken up.
---------------------------------
In contrast, Dr Tom Wenkart, who heads Macquarie Health Corporation (see story below), said "nothing, but nothing, has been delayed" with his plan to develop Prince Alfred Private Hospital. "We'll be up and operational by the end of 1994."
---------------------------------
The company first submitted a plan with a floor-space ratio of 2.5:1, that is, two and a half times the area of the site, but then wanted to almost double the floor-space ratio. This was rejected by South Sydney Council, which sent the original local environment plan to the NSW Minister for Planning, Mr Webster, for gazetting.At this point, Mr Richard Smythe, former director of the NSW Department of Planning, intervened. Mr Smythe, now a consultant to Macquarie Health Corporation, approached Ms Gabrielle Kibble, his successor as director of the department, who recommended that the minister exclude parking spaces for 600 cars from the floor-space ratio, which effectively meant a floor-space ratio of 3.5:1. The Minister accepted that argument and the LEP was gazetted in November last year.
PRIVATE LESSONS Sydney Morning Herald October 17, 1992
This year is the fifth anniversary of Dr Wenkart's winning the tender for the hospital from Central Sydney Area Health Service but, so far, no building has gone ahead, despite council approval being given late last year after Dr Wenkart adjusted his development application.
1994 Five years and no hospital
WENKART TAKES TAX BATTLE TO HIGH COURT Australian Financial Review May 6, 1994
Seven years after a contract was signed for the development of Royal Prince Alfred Private Hospital as a vital part of the NSW Government's teaching hospital program, no development has taken place, the site remains a car park and an RPA doctor describes the situation as "a complete shambles."
1996 Seven years and no hospital
--------------------------------
Lawyers have been called in, mediation has failed, and doctors have tried freedom of information legislation and the Ombudsman in an attempt to discover what is going on.Now the Central Sydney Area Health Service board, which runs RPA, is going to arbitration to try to end nearly a decade of frustration.
After Seven Years, RPA Hospital Plan 'a Shambles' Sydney Morning Herald June 17, 1996
Dr Wenkart is understood to have sought but not found the right financial backers for the hospital, which was to have cost $100 million. After a number of years, mediator Mr Trevor Morling, QC, was brought in to resolve problems with the lease.
1996 Legal wrangling
The mediation was unsuccessful and the matter was due to go to arbitration before a Freehill Hollingdale and Page partner, Ms Helen Wright. That arbitration has now been called off.
Uni Plan For $30m Private Hospital Sydney Morning Herald December 6, 1996
A new lease was signed in December last year with Macquarie Health Corporation - under considerable pressure from CSAHS - which included dates by which work must be completed. A development application and a building application have been submitted to South Sydney Council.
1997 A new lease with deadlines
"It took legal pressure of considerable strength to get the developer to sign a lease agreement with a timetable in it . . . more than two years of hard work," Dr Horvath said.
------------------------------------
A spokesman for the Macquarie Health Corporation said the original proposal to build a 400-bed hospital, a multi-storey hotel and shopping complex had been discarded because it was uneconomical. The new proposal is for a 200-bed hospital and car park.
Agencies Criticised For Being Too Secretive Sydney Morning Herald October 30, 1997
Last December, Macquarie International Health Clinic, an offshoot of Macquarie Health Corporation, signed its first lease with Central, specifying a set of deadlines for completion of the hospital by 1999.
1997 Still no building
However, the company failed to obtain building approval from South Sydney Council by November 1. Nor did it begin excavation for the hospital, or work on the adjacent new 1,200 car park, by November 14.
From Here To Maternity: Saga Of Hospital Bus Shuttle Sydney Morning Herald December 16, 1997
Diana Horvarth (Chief Executive Officer of the responsible Area Health Service): The developer has put millions into this project, to us, to others, and can't get a cent back until there's something on the site. So that doesn't even make sense in terms of the investment. It doesn't make economic sense and it doesn't make health sense.
1998 No hospital not sensible
Macquarie Group under Tom Wenkart is experiencing difficulties Radio National March 3. 1998
Nine years after a contract was signed to build Royal Prince Alfred Private Hospital, work has finally begun after the Central Area Health Service hammered out a lease agreement with the developers, Macquarie Health Corporation.
1998 The appearance of building
The 200-bed hospital, to be built on the site of a Royal Prince Alfred Hospital car park, has been the subject of a NSW Ombudsman's report, mediation and legal wranglings. The developer, Dr Tom Wenkart, had told the Herald in 1992 the hospital would be "up and running by the end of 1994".
Nine Years On, Private RPA Hospital Under Way At Last Sydney Morning Herald May 9, 1998
Plans for a $75 million private hospital on the campus of Royal Prince Alfred Hospital are in total disarray after a decade of legal wrangling.
2000 No hospital and contract terminated
Dr Diana Horvath, the chief executive of RPA's administrator, Central Sydney Area Health Service, has told staff in a letter that the lease for the 200-bed hospital and 1,200-space car park was terminated with Macquarie Health Corporation on March 17.
Macquarie had advised the health service "it no longer intends to build a private hospital''. This was confirmed yesterday by the chairman of RPA's medical board, Professor Chris O'Brien.
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However, in the past few days, Macquarie has decided to mount a legal challenge to the termination and will appear before Justice Windeyer in the NSW Supreme Court on Monday. Macquarie's founder, Dr Thomas Wenkart, did not return calls from the Herald seeking to ask why this challenge was taking place.
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The minutes also show the new car park built by Macquarie had opened without approval from South Sydney Council and was therefore operating unlawfully.
Wrangling Puts End To RPA Plan Sydney Morning Herald March 25, 2000
The Colocation Contract and Accountability
One of the major problems in both privatisations and colocations has been the nature of the contracts signed. They usually include "commercial in confidence clauses which block FOI disclosure. These are services, often paid for by the public or the community and provided to them. Both the company and the politicians are shielded from accountability.
The colocation contract with Macquarie Health is an excellent example of the way commercial in confidence provisions shield these private/public projects from public accountability. It is interesting that authorities were in a position to release the material if appropriate steps were taken but they declined to do so.
The report, by the Deputy Ombudsman, Mr Chris Wheeler, criticises the failure of CSAHS and its solicitors to set deadlines for the hospital. He described the heads of agreement between the CSAHS and Macquarie as "fundamentally flawed" and the decision to choose Macquarie "unfortunate" in view of "delays and problems" at "virtually every stage of the long drawn-out and unsuccessful process". (Macquarie has now agreed to deadlines, including opening the hospital by December 1, 1999.) The report is the result of a freedom of information request made in December 1995 to CSAHS by a Macquarie Street surgeon, Dr G. M. Halliday.
1997 Ombudsman report on contract
Mr Wheeler's report has many blank pages.
The CSAHS gave him documentation but claimed he could not include it in his report as it would breach confidentiality agreements if released under freedom of information.
Former Senator Joins Uni's New Private Hospital Race Sydney Morning Herald June 6, 1997
Ms Moss said there had been a "staggering" 39 per cent increase in complaints against agencies handling FOI requests and the most important of these may be the subject of a special report to Parliament later this year.
1997 The FOI problem
It involves a confidential 1989 agreement between a private hospital developer, Macquarie Health Corporation, and the Central Sydney Area Health Service (CSAHS), to build a 400-bed hospital, hotel, car park and shopping centre on the Royal Prince Alfred public hospital site at Camperdown.
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Investigators from the Ombudsman's office recommended that the details be released under the original FOI request, saying "the failure to construct the Prince Alfred Private Hospital was an unfortunate episode which adversely affected the interests of the people of NSW".The chief executive officer of the CSAHS, Dr Diana Horvath, said yesterday she had been given legal advice that the service was unable to release the documents because of their confidential nature.
Agencies Criticised For Being Too Secretive Sydney Morning Herald October 30, 1997
Mr Puplick indicated he would ``willingly hand over all the relevant documents to the Ombudsman if the Ombudsman used its legal authority to demand them, or to the Parliament if called for under the protection of parliamentary privilege, but neither body had been prepared to exercise their authority''.
2000 Authorities hide behind regulations
Wrangling Puts End To RPA Plan Sydney Morning Herald March 25, 2000
While Health 24 was the largest medical centre chain in Sydney in 1991 and had a chain of clinics down the east coast there is little information about it. The last reference I found to its existence as a part of Macquarie Health was in 1996. Perhaps it was sold to one of the larger chains.
Health 24, the largest medical centre chain in the city and suburbs, has also noted a significant drop in attendance, while the other big chains, Health Watch, Immediate Health Care and Mediclinics, also say they have seen a major drop in patients.
1991 The largest in Sydney
GP FEE SCARING AWAY PATIENTS Sydney Morning Herald October 19, 1991
Health 24, the biggest NSW-based chain of 24-hour clinics, often gets phone calls from hospitals which want to know whether the clinics can handle a batch of non-emergency cases backlogged in hospital waiting rooms.
1991 and in NSW
MATTER OF MAYHEM AND PRIORITY AT HOSPITAL BUFFER ZONES Sydney Morning Herald October 19, 1991
A counsellor from the Health 24 Medical Centre's Smokers' Clinic, Ms Donna Harrison, of Balgowlah Heights, said courses cost $150 at the clinic. Smokers received individual counselling and support for three months.
1993 Also runs stop smoking clinics
HOW MELANIE WON THE BATTLE TO GIVE UP SMOKING Sydney Morning Herald January 28, 1993
The dealings with Health minister Collins, the employment of Mr Richard Smythe, former director of the NSW Department of Planning, as well as former Health Insurance Commission official Dr Ron Tomlins have been described above. These were not the only health care bureaucrats and politicians to have links with the company. As indicated earlier comments made by insiders suggest that most did not find Wenkart's management style congenial and soon departed.
Former Senator Bob Woods has a new job as a consultant to Dr Tom Wenkart's Macquarie Health Corporation. One of his main tasks is to lobby on behalf of Macquarie's much delayed Prince Alfred Private Hospital at Camperdown.
Dr Woods, former parliamentary secretary to the Minister for Health, is working on the project with public relations consultant Mr Brian Dale, a former press secretary to Premier Neville Wran and a News Ltd executive.
Former Senator Joins Uni's New Private Hospital Race Sydney Morning Herald June 6, 1997
In 2003 Macquarie Health entered into some complex financial arrangements with a group called SSH. I do not know the significance of this but others might. It is not revealed whether Wenkart is still involved.
Analytica withdrew its takeover bid for SSH Medical last week.
2003 Major transactions
The withdrawal of the bid, which was announced on July 22 and lodged with the Australian Securities and Investments Commission on August 22, came after SSH announced that a series of major transactions with Macquarie Health Corporation and a $2 million loan facility from a private investor would be subject to shareholder approval.
SSH Medical posts 02/03 loss but says well placed for future developments. Australian Associated Press Financial News Wire September 14, 2003
- - - - we have succeeded in forming a strategic alliance with Macquarie Health Corporation and new director Mr John Maher. With the alliance, equity reserves increased by approx $1 million with minimal dilution of shares.
2003 Strategic alliance
SSH MEDICAL CHAIRMAN ADDRESSES SHAREHOLDERS AT AGM Australian Company News Bites November 28, 2003
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