Health and Aged Care

Outline of page

This page is a review of information about health and aged care during the 1980s, 1990s and early 2000’s as described on web pages I wrote at the time and as I remember them. The page reviews and interprets the health and aged care systems described on the Corporate Medicine web site through the lens of Michel Foucault’s concepts of governmentality, discourse and power (See previous page for more) with a particular focus on the way regulation has failed. It then returns to Australia’s current aged care system to carry this same analysis forward into the present. As I indicated there we were aware of these issues but Foucault has brought them together in a way that illuminates it better.

By 1998 I had been involved in collecting information about the USA and Australia for several years and had supplied regulatory authorities and politicians with large amounts of information. In 1998 I wrote to the department about the US multinational Sun Healthcare which had indicated its intention to enter our aged care marketplace.  The final paragraph indicates what was happening and describes the nature of the discourse driving it. It is still happening and this page explains how and why.

The tragedy of our time is that the language of reason and science has been replaced by the rhetoric of the advertising agency. The art and wisdom of leadership has become victim to the art of the international corporate con man. Principles of democracy and concern for the citizen have been subjugated to the interest of corporate "stakeholders". The discourse of an integrated, caring and supportive society has been replaced with the interest driven language of competition. In this way the whole of a rich human civilisation is reduced to a self-interested and vulgar market - all in less than a decade. That the market was an integral component of our balanced society is not disputed. It has served us well. When society and its members become servants of the market then the integrated value systems, which make the market work for citizens are removed. They are considered to be obsolete.

Source: Letter to Aged and Community Care Division of Commonwealth Department of Health and Family Services. Re Sun Healthcare 22 February 1998

The letter to the department of health and ageing objected to the US company Sun Healthcare’s planned entry into Australia’s aged care system. At that time, I thought that probity requirements were still in place and robust.  The letter refers to Sun’s submission to FIRB (Foreign Investment and Review Board) when it responded to concerns about its suitability to operate in Australia.  The points in that submission were made assertively as if there could be no disagreement, but they were not supported with any evidence. In the letter I criticized the assertive neoliberal discourse used by the company and confronted the power of that discourse with argument and fact.  

This web page uses Foucault’s ideas to re-examine

1. The US health care system generally and then illustrate this by focusing down on

  1. A scandal in Psychiatric and substance abuse hospitals in the 1980’s and early 1990s using one hospital company as an example
  2. Regulatory failure in the USA surrounding the events at this time
  3. Politics, the market and regulatory failure in Australia in the 1990s when these US companies entered the country.
  4. System failure and injury to patients in general hospitals in the USA in the late 1990’s and early 2000s focusing mainly on the same company.
  5. Regulatory failure in the USA at this time.

2. Aged Care in the USA generally in the late 1990s and early 2000s then focusing down on

  1. An example of a representative company that was a dramatic success before falling from grace
  2. Regulatory failure in aged care in the USA
  3. The response of government, industry and regulators when this aged care company entered Australia

3. Australia's aged care regulation seen against this background and using Foucault’s concepts.

Implications: This analysis shows that regulation has been created, governed and managed within the neoliberal discourse. This is because regulation's primary but unstated function has become and remains the protection of the neoliberal state and the discourse on which it is based. Effective regulation exposes failure and threatens the neoliberal discourse.

It concludes that regulations role in improving the quality of care and protecting citizens has fallen by the wayside. To maintain the legitimacy of the discourse around regulation and protect it the illusion that this is happening must maintained. Persuasive and emotionally loaded words become a substitute or token for the real thing, which is absent. Tokens are critical for the maintenance of dysfunctional or culturopathic social systems because they allow participants to continue believing.  They can defend what they do with sincerity. As Foucault shows it is the power they hold by controlling information that enables them to get away with this.

Action: Foucault's insights show that for the community to bring about change they will have to take control of the aged care discourse. To do so they will need the power obtained by being directly involved in regulation as well as the collection and dissemination of information. This will threaten neoliberal discourse and be strongly resisted but there is no other way. The proposed Community Aged Care Hub is very specifically and intentionally designed to do this.

Note: I could have given multiple other examples but used these two companies because they entered Australia and I had studied and written about them in greater depth. To find many more representative examples that could be analysed similarly look at the links at the foot of this page or peruse the USA site map and the Australian site map on the Corporate Medicine web site. There are short outlines on the maps to several hundred pages containing information about multiple companies and the practices they indulged in.

Tip: Click to expand (+) or collapse (-) content on this page

Preliminary introduction

The discourse driving modern health and aged care is readily traced by looking at what I wrote about the people and companies that wielded power and influence and who were appointed to be regulators. We can track their association with the neoliberal agenda by looking at what was said about them, as well as what some of them said.

My words and Michel Foucault’s terminology: In 2011 I reviewed some basic theoretical concepts as an introduction to a criticism of the Productivity Commission’s final 2011 report 

  • A Basis for Criticism comprising 1. A Simplified Understanding of the nature of Ideas, Beliefs and Behavior and 2. A Simple History of Ideas in Health and Aged Care.

This complements Foucault’s theories by setting out the psychological and social factors that lie behind some of the things he writes about. It reinforces why his concepts of power and discourse are such profound forces in allowing us to control the thinking of others and in making each of us vulnerable to being controlled by others.

In that article I looked at some very basic logical concepts before going on to examine the psychological and social components of our nature that make it so important for us to believe in something. I tried to make this as simple as possible.

As Foucault, whom I had not read about at that time, has shown social discourses are the mechanism through which the forces and tensions I describe manifest and express themselves.  I used the words 'pattern of ideas' and ‘paradigm’ rather than discourse  This has a similar meaning to ‘discourse’ as used by Foucault although his use of 'discourse' includes the processes of communicating them..  I used the word 'internalisation' which refers to the way we adopt ideas, paradigms or discourses as our own. Foucault’s concept of ‘governmentality’ is broader and encapsulates but it also includes the way we embrace and include these discourses into our being so that they become who we are - the way we control others as well as ourselves, a process that extends from government to individuals. In this regard Foucault talks about our ‘mentality’.  I talk of ‘power’ and ‘credibility’ whereas he ties power more closely to having knowledge, creating it and controlling it.

These discourse are what drives our actions and re-affirms our beliefs. In this 2011 article I describe the way we respond to conflicting discourses and the important role that ‘power’ plays in that. Neither logic nor data are any match for these powerful forces when they come into play. We have developed psychological strategies that allow us to negate and ignore both when we need to do that to conform.

There is a brief review of the history of health and aged care showing how a variety of ideological discourses in wider society have repeatedly challenged and temporarily overpowered the medical/community discourse. People have been harmed.

I come back to the present and recent past to show that the conflict with the neoliberal discourse is similar to those in the past but is much stronger and more pervasive because it directly confronts and negates traditional community and medical discourses. These are the conflicting paradigms/discourses in modern aged care – the one much more powerful than the other.

Using these concepts, it is easy to apply Foucault’s ideas to what I have said and to the many hundreds of illustrative quotes in the web pages I wrote about health and aged care between 1997 and 2011.

A focus on regulation

My research and my involvement with the corporatisation of health and aged care took place at the same time as criminologist John Braithwaite, an Australian authority on marketplace regulation, was studying aged care regulation in the USA and the UK. He worked closely with regulators watching how they worked. He based his plans for aged care regulation in Australia on that experience. He did mention the risk that regulators might be ‘captured’ by the market in Australia and after re-examining aged care regulation in about 2004/5 he described the way in which aged care regulation had been captured by the market and its thinking, and how regulation had become ineffective as a consequence. In the material I read he did not use Foucault's concepts which explain just how powerful this regulatory capture really is. I have not read all his work.

Perspective: I was studying the corporations and their conduct so my examination of health and aged care regulation was from a different perspective to Braithwaite. I wrote about it on many web pages and wrote several pages specifically about different aspects of regulation. This throws a stronger light on what was happening and how it served the market and politics rather than citizens. It complements Braithwaite’s findings and also draws attention to some potential weaknesses in his proposals. These can be anticipated and prevented.

To understand what happened in the past and is happening in regulation in Australia today this page examines both the marketplace being regulated and the regulators through Foucault’s eyes. They are a good example of Foucault’s concepts in action.

The discourses: In both the USA and Australia there have been two broad discourses each with some supplementary discourses within them,

  • the first with power and influence, well-coordinated and supported driving the neoliberal agenda

    There is a supplementary discourse within the neoliberal one which is most evident in Australia. This is a defensive discourse. It seeks to justify decisions taken that would otherwise be seen as illogical or harmful, to deny or minimise failures and to develop reasons for stigmatising critics so that they can be discounted.

  • the second rather fragmented critical discourse is without power and influence. It is a response to what citizens have experienced, seen or studied when they were part of or came in contact with the aged care system. Because they come from different backgrounds and have different experiences they often have strong but different views about the problems and what needs to be done. They look for simple answers that are easily understood. They are defensive of their own understandings and are reluctant to integrate and work together so that this discourse is fragmented. As a movement it lacks cohesion. Too often they blame the regulators and call for more regulation. This page describes why this does not work and is unlikely to work.

Why the market and its regulation failed in the USA: In addition to Braithwaite’s valuable findings and assessments, with which I agree and will write about on the next page, there are two other major reasons for the failure of the US and Australian systems and this page explores the first of these. They are

  1. Governmentality: The manner in which governmentality mediated through ideological and marketplace discourse impacted on the thinking and conduct of the providers of care as well as the regulators and the regulatory system in the USA and Australia. This is addressed on this page.

  2. Capacity to choose: The effectiveness of free markets in health care depends on effective customers. They are expected to be responsible for themselves and effective in a harsh world. The free market discourse isolates them from the supportive communities within which we all live and in which we are all in one way or another interdependent. It takes no account of the particular vulnerabilities of people receiving health and aged care – their frailty and their declining mental capacity. It replaces a traditional discourse of community and professional responsibility in providing care based on a recognition of this vulnerability.

    Success depends on these customers’ willingness and their capacity to understand and act on the data that is made available to them. They are encouraged to make choices and choose wisely. The market based system depends on their capacity to critically examine data.
    Health and aged care are services that citizens expect to be able to trust and to which they look for help when they are in need. This often comes at a time of crisis in their lives. When under pressure and desperate we all look for someone we can trust and we grasp at any helping hand.

    Not surprisingly the success of policies based on this discourse has been limited by the number who find themselves in a position to make a considered and calm decision, who have the capacity to evaluate the data and who have the interest to do this.

    Positives and negatives: Making data publicly available has been beneficial in improving the system to the extent that the USA provides on average more than twice the amount of registered and trained nursing time as Australia and an hour more of nursing time to each patient every day. Good motivated nursing homes have responded well but homes owned by the most profitable corporate owners continue to staff poorly and have many more failures. The data shows no change in this. These companies have not suffered and powerful operators who perform poorly have not improved or been put out of business.

    Outcome: There is a maldistribution in the figures with a number of very good homes pushing the average up. It is probable that those providers who have improved staffing and care do benefit from those who do assess the data but these are not the majority.

    Far too many citizens are too stressed, or don’t have the knowledge or inclination to assess a wealth of data. They are trusting and in their time of need are seduced by the bad nursing homes with their aggressive marketing. The discourse of the providers, the marketplace and the image makers remains dominant and the discourse of the doubters who urge caution has limited impact.

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Health and aged care in the USA

In the USA the Wall Street financial marketplace has always been very aggressive. It embraced, capitalised on, and fostered the development of the neoliberal agenda in the 1970s and 1980s. The merger of large companies to form Citigroup was only possible because laws that restricted conflict of interest were liberalized as part of the neoliberal political agenda - repealed to free up the marketplace so that market forces could work their magic. This resulted in massive frauds by Citigroup and other Wall Street financiers as well as by the massive corporations like Enron and Worldcom that Citigroup advised. Those citizens who trustingly came to them for advice were defrauded. The tentacles of these credible and powerful companies extended into health and aged care through discourse.

Financiers and health care

Many like Citigroup had large health care divisions that advised health and aged care corporations on strategy and managed their financial transactions. They held annual conferences for health and aged care providers where the corporate discourse was disseminated by big finance and spread into health and aged care.

In 2004 I wrote a series of web pages describing the network of relationships between financiers, health and aged care, and politics in the USA. Citigroup operated in Australia and was active in the health care marketplace. I wrote several web pages describing its conduct.

Corporate culture: On a page Citigroup Culture and People I wrote about Citigroup’s culture and its senior staff, what they said and did as well as what was said about them. I included material about the stock exchange and the relationship with politics. While I did not use the word ‘discourse’, the page reveals the nature of the corporate discourse in the groups mentoring and advising the health and aged care sectors.

Controlling health and aged care: Another page The Financiers and Health Care describes the relationship between these financial institutions, the big banks and the health/aged care companies they worked with. We can see the way that power and credibility in Wall Street drove these companies to embrace this ‘discourse’ and made it legitimate. They became very successful by doing so. This focus on profits and markets encouraged them to abandon their health care responsibilities and exploit their patients as well as defraud the funding systems.

Finding scapegoats: Ideologies need to destroy the beliefs that stand in their way and look for a scapegoat. In the 1980s when neoliberalism became political policy President Reagan’s adviser Joseph Califano targeted the medical profession as the villains responsible for all the ills in the health system. He wrote a book advocating the use of economic levers and the manipulation of incentives and disincentives in order to take control of doctors' incomes and their careers. He explained how to force them to conform to the requirements of the market. I wrote a web page Joseph Califano and the Market Revolution to describe his views quoting from his book to show why and how the medical profession was pressured to accommodate to the discourse that ultimately led them to cooperate in the exploitation of the vulnerability of their patients.

In Australia too: Califano’s book was influential in Australia in the 1990s when the market and politicians attempted to take control of doctors by requiring them to enter into US style contracts. Doctors in Australia resisted and won a standoff in 1998 when government, Mayne Health and AXA insurance group combined to tempt and force them into contracts which would have put them into the same vulnerable situation that Califano achieved in the USA.

By resisting the medical profession retained power in hospitals forcing managers to engage with them when making decisions involving care. When Mayne Health did not do so and tried to introduce US style medicine in 2002 they put it out of business. While health care, particularly nursing has been impacted by neoliberal management we have not yet seen the sort of problems that occurred in the USA and are described below. Whether the post 2002 generation of doctors, who have not been part of this dispute will internalize the neoliberal discourse remains to be seen. Doctors are increasingly forming companies themselves and are seeking funding from the marketplace and from private equity groups.

Discourse is infectious: In a shorter web page PERFORMANCE OF CORPORATE GROUPS: Profit versus Care this discourse can be traced into aged care, then hospitals in the USA before tracking it into nursing homes, hospitals and General Practice in Australia.

The discourse and politics: A page Politics, Markets, Health and Democracy describes how the discourse and its impact on behavior can be traced into society generally and how it permeated the political system and controlled it using political donations, lobbying, perks, deferred rewards, marketing and a revolving door of senior staff between corporations and government. It also looks at the impact on the democratic process. Health care and Aged Care corporations are among the most active in seeking political advantage in these ways. I then describe the way that these ideas permeated into Australia. In a letter to the Department of Health objecting to the entry of Sun Healthcare into Australia I described this discourse.

Discourse goes global: A short web page written earlier in 2000 The Dominance of the US market and US marketplace Ideas briefly documents the US corporate activity in health care as it spread into international markets. The US corporate health sector was supported by the US government as it pressed the World Trade Organisation (WTO) to have health care included in global trade agreements like any other commodity. Australia is now a leader in making trade agreements in health and aged care with China and other Asian countries. With this globalisation the discourse has been codified into agreements and its strategies established in regulations as a requirement for international health and aged care marketisation and trade.

The impact in health and aged care

Subsequent sections record the passage of the discourse into the leadership and management of a hospital company and an aged care company. They examine the discourse in these two sectors and describe the manner in which the discourse led doctors and nurses working with these companies to cooperate in defrauding insurers and government by exploiting the vulnerability of their patients and in many instances causing them extensive harm.

By seizing control of the interpretation of knowledge and distorting it these companies became very powerful in the Foucaultian sense. Staff patients and community accepted that what they were giving and getting was good care when it was nothing of the sort. Regulators were blinded by this and accepted or ignored what was happening even though it should have been obvious. In each instance it was isolated outsiders who saw what was happening and took action to expose the fraud and the harm done. The power driving this discourse was so strong that for believers even criminal convictions failed to dent it, and companies claiming to have reformed continued to behave in the same way and to re-offend.

In Australia: The progress of the discourse in Australia influenced marketplace and political thought and so the decisions made in health and aged care. The influence of US ‘authorities’ on the discourse is noted. Several health and aged care multinationals were recruited and welcomed into Australia. They received strong political and market support in spite of extensive information about their unsavoury and fraudulent international conduct.


The neoliberal interpretation of knowledge and the discourse in regard to regulation has been largely negative. One of their strongest exponents and an authority on aged care expressed the underlying messages. He indicated that government should butt out and leave it to the market. The belief was that the market was self-regulating and that any interference impeded this process. The same aged care authority said “The quality of health care suffers because of governmental support and regulation. The system takes away incentives to improve”.

Regulatory capitalism: So governments in both the USA and Australia have policies that advocate and claim to be doing less regulation. At the same time, they have been forced to regulate more because of public concern and failures in the system. So while claiming and perhaps believing that they are reducing regulation both countries have seen a massive growth in regulatory activities of various sorts. Many academics including Braithwaite consider that 'neoliberal' is the wrong name to describe the last 40 odd years. They describe this era as ‘regulatory capitalism’ instead.

Controlling regulation: Regulatory vigour and independent data both potentially threaten the neoliberal agenda and it is hardly surprising that believers will ensure that it is kept in safe hands. The regulatory system has become critically important in responding to any criticism of the marketplace in aged care.

In setting up regulatory processes, credible industry and marketplace participants become advisers, consultants and committee members. While some regulation is kept in house, other is delegated to ‘independent’ organisations who are appointed and funded by government so are under pressure to be compliant. Regulation can be contracted to competitive private companies. There are multiple "Quality programs' run by industry and by big corporations themselves. They are at risk of becoming tokenistic, as in the examples I give, or of being used to trap potential whistle blowers.

The regulatory system is ultimately controlled and run by government and marketplace. It is constrained by the dominant discourse and those who manage it must conform to that discourse if they are to be credible and acceptable. While it may not be intentional the regulatory system becomes a mechanism for protecting and supporting the industry and its stakeholders rather than the vulnerable community they claim to defend. It does not work for them.

Braithwaite refers describes the way that regulation in Australia has been ‘captured’.  What Foucault’s concepts reveal is that the regulatory system in both countries was created by the neoliberal discourse and this discourse is deeply embedded in the DNA of those who manage it and so in its staff. A discourse looks after itself and does not turn on itself.  It has never been independent.

What happened: The failures in regulation in the USA and Australia as well as some successes in Australia are described after each example in the sections below.  The successes by state regulators reflect legislation from a more traditional discourse.  Regulators who were not part of the new discourse were prepared to stand firm against the power of the neoliberal political discourse.

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The consequences in health care

I presented a paper at a conference and published an analysis of what was happening in health care in the USA in 1996 warning of the risks for Australia. I used the company National Medical Enterprises (NME) by then renamed Tenet Healthcare, which had recently been forced out of Australia as my example. It is interesting to revisit that article looking at it through Foucault’s ideas of governmentality, discourse and power.

National Medical Enterprise and the first health care scandals

History: NME (National Medical Enterprises) was one of the health and aged care corporations founded in the mid-1960s when the development of US Medicare created a funding stream that could be exploited. These companies. advised by financial advisers and consultants. embraced the new belief in markets during the 1970s and 1980s and brought them into health and aged care over the criticism and protest of critics like economist and social critic Robert Kuttner and lifelong medical critic of corporatized medicine, Professor Arnold Relman with whom I corresponded in the 1990s. He advocated for a Medicare style insurances funded health system that was “not-for-profit, community-based, and run by doctors and local health care institutions with the support of community groups” – a system they could trust, which is what most Australians might like for health and aged care.

Hospitals were gold mines and the companies were enormously successful and soon dominated. This success was threatened when in the early 1980s Diagnosis Related Group (DRG) funding was introduced in acute hospitals to contain the cost blowout that had occurred. As indicated above doctors became the scapegoats and were blamed for this blowout.

Escaping DRGs: Astute operators like NME responded by selling half their general hospitals and moving into less clearly delineated ‘specialty’ hospitals providing psychiatric care, drug rehabilitation and rehabilitation. Here they were paid per item of service. There were no DRGs in these sectors. At the same time neoliberal policy saw the removal of restrictions on the number of beds in these areas. The response was a massive building spree and a rush to find patients to fill the beds.

Money making strategies: Companies were enormously inventive in creating new therapies in these less well defined areas of medicine, particularly in psychiatry where these ‘therapies’ were of little or no benefit and most did not require hospitalization. But far more of these therapies could be given in 24 hours if the patients were in hospital.

Competition for patients: The competition soon became about heads on a bed. They competed to persuade anyone they could find on whatever grounds to admit themselves to hospital - provided they were insured. At the time adults were insured for 1 month. The mental health of children and adolescents and the risk of drug abuse were topical at the time. They were insured for 6 months so were targeted. Once in hospital these often simply anxious citizens, and children with anxious parents, were given as much therapy as possible each day for the duration of their insurance.

Justification: Management claimed, and staff were expected to believe, that the more care the better for you. You were entitled to it because of your insurance. Nothing is as persuasive as success and staff were soon persuaded. Thousands became enthusiastic and dedicated in persuading patients of the benefits.  Management used its power to set a discourse that was confined to the commercial aspects and excluded anything else.

Governmentality, discourse and power

Power driving the discourse: In NME (and others soon followed) the entire process was orchestrated from above with a highly structured management system. I described this as “a powerful group of carefully trained hospital administrators”. Policy was driven by memos and policy documents, staff meetings and a computer system that tracked the admissions, the bed numbers, the treatments, the insurance (most profitable ‘payor-mix’) and the number of days required to complete the treatment which was the duration of their insurance when they were deemed to be cured.

Key drivers: Driving the system were the markers of profitability. All the metrics were planned ahead by central management including the number of patients, the proportion with different levels of insurance cover, and the required length of stay for each. This was known as “plan”. The key consideration and all the pressures on managers were on “meeting plan” as revealed by the computer analysis. The plan set the number of people that were to be found and admitted and success ultimately depended on meeting this essential component. With heads on beds the rest was possible. If you failed to meet plan you received a dressing down or lost your job. If you exceeded it there was a bonus of 50% of salary. Every effort was directed to exceeding plan and those who were most successful in this received company awards.

The second key consideration was being a “team player” by identifying with the economic priorities. Anyone who had doubts was soon pushed out. Staff were fired for being “too clinical”. There was constant pressure and uncertainty about job security.

Knowledge-power, confidence and credibility: The companies had no doubts. Economic success was proof that they were providing superior care. The standard of this care and its profitability was enthusiastically praised by the stock market. The company published about 40 books for the public on psychiatric conditions, advertised extensively on television, ran health stalls at schools to offer advice, generously appointed and paid for councilors to schools and advisers to the courts, particularly juvenile courts. They controlled and interpreted the information that everyone else received. While the entire process was directed to getting heads on beds the industry, corporate profile and standing were enhanced and the parameters, within which legitimate discourse in the sector and the wider community occurred, were set.

Heads on beds: Children were insured for much longer than adults and anxious parents were easily persuaded to admit their children. In addition, the company offered a bounty of $2000 per head on a bed to often off duty policemen. They scoured the community for potential customers who could be persuaded that they needed help. Bounty hunters even operated in Canada flying patients to the USA until Canadian Insurers stopped paying. All of this activity was to generate admissions or to induce people to phone hot lines for advice. Here they were persuaded to come for assessment. These were done by untrained staff whose job it was to persuade them into hospital for further evaluation. These assessors “intake performance” in “converting” inquiries to admissions was tracked by computer and was used in motivating them. Once in hospital patients were allocated a diagnosis and a doctor.

Governmentality: The system for getting heads on beds was called the “Administrator Driven Intake System”. In a typical team player strategy, a document "Intake Focus Golden Rules", the instruction manual for managers, required them to ensure that staff “sell the benefits of the free evaluation”. Managers were to encourage the staff to “discuss each other’s conversion rates” to “be sure that they don't have professional/personal issues or biases that can impede their intake performance." The company deliberately fostered a commercial ‘intake culture’ across their specialty hospitals. This same document instructed managers to “Make ‘intake culture’ part of orientation for all new staff members” Staff became very enthusiastic and boasted of their success at hospital and company meetings.

Power and governmentality: This company was enormously successful and widely admired in the community as well as the market – very powerful. At the same time all this activity was fanning anxiety and bringing people into hospital. The discourse reflected in the documents and in the reports on meetings illustrates how strong the pressures were and how vast numbers came to own these concepts. Management had no doubts. If any staff had doubts they remained silent because anyone who criticized was discredited. Whistle blowers were sued, silenced and then starved. Few spoke out and the patients that did were discounted. Most staff accepted the validity of the discourse and identified with it. Almost all the other companies in the sector were soon doing the same things. They poached NME managers and gave them senior positions.

Governing Doctors: In the USA, as in Australia, patients require a doctors’ signature to be admitted to hospital and any treatment must be ordered by a doctor. None of this could have happened without doctors’ complicity. We see just how powerful and persuasive these pressures and discourse can be. The hospitals had obtained control of almost all of the admissions to hospital through the company's intake system. By allocating the patients to the psychiatrists they gained total control over their income and their careers. Young doctors with families were offered generous contracts (golden handshakes) and loaned money to build houses. They had their secretarial and other expenses paid. If they became team players and handed their patients over for treatment they became very wealthy. If not, they were soon indebted and starving.

Doctors standing in the hospital was linked to their money raising ability. Team players who made more money for the hospital were given more patients or well-paid positions in the hospital. The best were awarded hospital positions and became honoured speakers at professional and community talkfests. They became authorities and their practices prospered. This had little to do with their clinical ability. They came to believe the image created for them and were soon thinking and talking in the same terms as the managers. If local doctors disagreed and refused to conform they brought in some who would not from other states. Effective quality assessment and peer review programs where patient care was reviewed would have challenged many of these successful doctors. In these hospitals these processes became nominal and committees seldom met.

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Regulatory failure in the specialty hospitals

The CMS: In the USA the primary regulatory body for health and aged care is the Centre for Medicare and Medicare Services (CMS). It monitors both billing and standards of care but it does so primarily by delegating these to the states or sometimes contracting services to private entities. Major problem areas can also be addressed by the federal government General Accounting Office (GAO), which provides auditing, evaluation, and investigative services for the United States Congress. It is the supreme audit institution of the federal government of the United States. It was responsible for the oversight of government bodies including government insurance bodies.

I will look at the sort of powerful discourse that compromised the effectiveness of government regulation more closely in relation to a later health scandal and in aged care. But it is likely that the criticisms made there applied equally at this earlier time because all of these hospitals and the Medicare reimbursements for older citizens were monitored and regulated by this system. Reports of government health investigators and hospital inspectors revealed their failure to detect what was happening. All of NME’s hospitals were monitored by state authorities. As far as I am aware none of them detected the fraudulent billing, the unethical and criminal conduct or the harm done to patients. If they did, then they did nothing to stop it.

Accreditation: Although not the primary regulator, accreditation was a major guarantor of acceptable conduct and although it was driven primarily by process rather than outcomes it was perceived as a measure of standards of care and used as such in marketing by the companies.

The psychiatric and drug recovery hospitals were each accredited by two separate accreditation agencies. One was organized and staffed by the corporate psychiatric industry who identified with and supported these practices so there were no challenges to what was being done. The Joint Commission for Accreditation of Health Care Organisations (JCAHO) accredited all hospitals. I know that all of the psychiatric hospitals in Texas were fully accredited and I did not hear of any of NME’s psychiatric or substance abuse hospitals that failed accreditation.

Corporate, business executives and other credible fellow thinkers were on accreditation agency boards. Assessors themselves were drawn from staff in other corporate facilities that thought similarly. In writing about this in 1996 I said

Corporations acquired great credibility because of their wealth. They cultivated this further by making generous donations to research, charity, human rights movements and by forming relationships with academic institutions. They were well represented on accreditation and certification bodies and formed a powerful lobby group in Washington called the Federation of American Health Systems. They made loud and plausible claims to ethical conduct.

In a psychiatric hospital owned by NME’s competitor Columbia/HCA a psychiatrist reported problems to the JCAHO. They promptly informed the hospital who punished him by reducing his privileges and when he persisted removing them. Lawsuits followed.

Insurers: Representatives from the insurers visited regularly to check patient records against billing. One medical whistleblower from New Jersey was interviewed by an insurer and told them what was happening but they disregarded this. When it was all exposed they were the first to sue for damages.

The government insurer CHAMPUS which provided medical insurance to the armed forces and their families was a prime target of the fraud. The Government Accounting Office (GAO), the prime oversight body in the USA was responsible for vetting the bills and the practices of those providing care as well as investigating complaints. It admitted to a congressional investigation that “during the 1980s little monitoring was done”.

It is interesting that a very senior officer, with a commendable record for investigating fraud and who was responsible for investigation resigned to join Tenet’s own investigation team soon after the fraud was exposed. Others indicated to me that many complaints were made about the defrauding of CHAMPUS and these had not gone further than his desk. Clearly the discourse in government and the GAO was supportive of the sector, its thinking and its practices.

Paperwork: The company ensured that all the paperwork complied. There was a lot of tongue in cheek activity. A document instructing staff on note keeping was headed 'WEECHEETUM'. Doctors were offered refreshments on Saturday mornings when they were expected to come in and sign off on treatment – jokingly called ‘charting parties’. Doctors continued to visit their patients daily and charged fees for this. They were described in jest as ‘howdy rounds’ and ‘wave therapy’. They knew what was happening but complied to survive.

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Governmentality and the scandal

It was a policeman in Texas who realized that a teenager had been kidnapped and put in hospital. He took action. Mike Moncrief, a Texas senator believed him and mounted an inquiry. Would be whistleblowers finally came forward. The scandal involving multiple companies and exposures spread from Texas across the USA. Record fines and fraud settlements were reached and NME was convicted of criminal offences. It was forced to sell all of these hospitals - three quarters of its hospitals. Insurers and patients across the USA sued for damages. Most of the companies doing similar things reached settlements and paid lesser fines and/or were sued including Columbia/HCA.

The depth of governmentality: In my synopsis of the 1996 article I indicated that the marketplace frame of analysis was deeply entrenched in US regulators, corporate executives and Australian authorities

The power of the ideas and the extent to which they had been internalized (ie. become part of identity and defended in the face of evidence, logic and even criminal convictions) is revealing. Many corporate executives were unable to accept that these normal and very successful business practices had been harmful and responsible for what had happened in this sector. They believed it was a beat up. Staff were reported as blaming the numerous court actions as a response to the press beat up and not their own conduct. The court negotiated settlements and payments were thought of as strategic business decisions made in order to move on.

Even after the exposure the stockbrokers refused to accept the depth of what had happened. This was “an interruption in growth - we do not believe that it is permanent”. Another said “the worst is behind it” and there was “an aggressive action plan”. In any case “the media will find something else to focus on by fiscal 1993". Years later when the company’s fortunes dramatically revived its business skills were remembered positively as showing that it had not lost its Midas touch.

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Governmentality in Australia

NME moved into Australia in June 1991 shortly before the scandal broke in the USA. It bid to buy a majority holding in Markalinga, a West Australian company in financial difficulties. Markalinga also owned hospitals in NSW. NME was undoubtedly selling its very successful business expertise as a solution to our struggling private system and it promised to build new state of the art private hospitals. It would have marketed its track record and business analysts would have confirmed this and sung its praises. The new company was to pay NME $1 million a year for the use of NME’s business expertise and the services of a trained administrator from its international division to serve as CEO. He had been in charge of a very profitable hospital in Asia.

Regulation in Australia

Federal government regulation

The sale did not go through until December 1991 by which time the scandal in Texas had broken and newspapers in Sydney and Perth had published some information. In spite of this the regulator, the Foreign Investment and Review Board (FIRB) rubber stamped its entry to Australia.

State regulation and its response to corporate discourse

An objection overruled: A scientology group, which might have been seen as lacking credibility, had been tracking the exploding scandal in Texas. They supplied accurate and easily verifiable data to NSW Health Department objecting to the granting of hospital licenses under the probity provisions of state regulations. NSW Health wrote to US authorities and was sent documents describing the settlements but these were not criminal convictions. One of its staff holidaying in the USA was impressed with the company after being given a guided tour of an impressive hospital. The department accepted authoritative assertions and unsupported claims and assurances from the company and its own staff member over the documents from the USA. Hospital licenses were granted in NSW and Western Australia.

A new hospital: In 1992 NME announced plans to build a new state of the art St Georges Private Hospital and applied for licenses. The NSW Health department were confident about their investigation and furious when in October 1992 Four Corners host, Andrew Ollie, showed a UK documentary describing NME’s conduct in Texas and the country wide investigation that was unfolding. They were still angry the next morning when I phoned to tell them that I had heard of similar practices at the international hospital that the new CEO from NME had been in charge of. I did not have proof. When I met with them some days later they had received additional information from the USA and realized they had been duped. They started investigating.

By March 1993 there was extensive press coverage in Australia. NSWHealth indicated publicly that they would not grant further licenses until the US court proceedings had been resolved.

Appointing a judge: The NSW government were extensively lobbied by the market. They appointed a recently retired supreme court judge who had recently taken early retirement to take over from the health department and investigate. It was later revealed his early retirement was in response to an ICAC (Independent Commission Against Crime) investigation into his personal sex life, which put him at risk of improper influence.

The judge ignored the department’s advice to defer a decision and set about investigating. He planned to grant a license with conditions. NSW Health received much more information and then made a submission to the judge recommending that the license be rejected on the grounds of the company’s ‘lack of frankness and candour’ and their own inability to effectively monitor the proposed conditions.

In September 1993 the judge granted licenses with token conditions specifically excluding the NME CEO from the conditions, which he did not otherwise meet.

West Australia: During this period the West Australian Health Department had received the same information as NSW. It did not have the power needed to revoke licenses but wrote to the state health minister urging him to set in place a process to remove licenses from NME and its Australian subsidiary AME (Australian Medical Enterprises). This was ignored.

Governmentality in the marketplace

During this period there had been extensive press coverage and the consequences of the company’s business practices and documents were readily availability. But the Australian market’s support never wavered. The company obviously expected that the licenses would be granted and so did the market. During this period the new company now called Australian Medical Enterprises (AME) negotiated extensive loans with banks including the Australian Industrial Development Corporation a federal government owned and supported QUANGO in preparation for rapid expansion into other states. NME was already negotiating a criminal plea in the USA and would have wanted to get licenses before this became public.

The loans were granted subject to the licenses being granted, the $1 million contract to use NME business expertise being maintained and the continued employment of the NME appointed CEO in that role.

State regulators stand their ground

AME immediately announced plans to buy hospitals in Queensland and Victoria, and a pathology business (federally regulated) in NSW. Both state governments and the doctors in the hospital it was bidding for in Queensland were soon in possession of documents. Leaked information about the impending criminal settlement was also made available. Victoria rejected the license application on probity grounds and the company withdrew from its Queensland bid.

Federal equivocation

After the criminal conviction in 1994 the government used the FIRB process to block further investment by NME but promised to review its decision after 6 months. During this time NME changed its name to Tenet Healthcare and made elaborate claims to reform and a new ethical image described as “intensely steeped in an environment of high ethical standards". It claimed that the sale of its psychiatric and substance abuse hospitals was amputating an 'infected appendage' that was not representative of the company. New management in the USA came from its international division which it claimed was clean.

They confidently indicated that the government planned to reverse the FIRB decision and announced plans to meet the health minister prior to the company AGM. She had been premier of Western Australia when NME had been welcomed in 1991 so they might have expected a friendly reception. The impression gained was that they had been assured of this.

Damning information: There had been sketchy information about an international court case alleging unsavoury conduct. This had been denied by NME. Additional information about this became available in Australia. AME directors were directly and repeatedly challenged about this and asked to investigate whether the NME CEO of AME had been involved. They responded with legal threats.

To avoid any prior planning by the company and any negotiation with the minister the court documents in which the accusations were made and where the persons meeting the minister were personally accused. but had not attempted to defend their actions, were only made available to the minister a few days before the meeting. The government did not lift the restrictions on further investment, creating an impossible situation for them. Soon after this the company started planning the sale of its Australian holdings.

International sales: It was not long before the World Medical Association was in possession of a full set of documents. All governments and local medical associations in countries where Tenet/NME operated were in possession of a representative sample and knew what had happened in Australia. During 1995 and 1996 Tenet/NME sold all its international operations except for one or two hospitals in Spain.

Governmentality- Australian policy undented: Belief is seldom dented by evidence, logic or even experience. By now powerful international and local structures had deeply imbedded the neoliberal discourse into the very DNA of our businessmen and our politicians.  Critics had been discredited by labeling as "lacking objectivity, vengeful etc."

By 1997 a vast amount of additional information about problems in the USA was available and it just kept coming. In spite of this a new government was soon welcoming Columbia/HCA the USA’s largest hospital company which had promised a $1 billion investment in new hospitals.  It was the subject of extensive negative publicity and allegations in the USA. When the FBI swept through its hospitals seizing documents in the first stage of a US $1.7 billion fraud action, newspaper reports were faxed to FIRB which was considering its application. Columbia/HCA’s attempt to enter Australia was abandoned.

Not to be deterred, during the same year, Australia’s leaders welcomed Sun Healthcare whose aged care operations were the subject of considerable concern in the USA.

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Six years on: It happens all over again in the USA

The moneys from the sale of Tenet/NME’s psychiatric, drug abuse and international hospitals were invested by buying other general hospital companies making Tenet/NME the second largest hospital owner in the USA. After its conviction in 1994 the newly named Tenet was subjected to close and continuous government oversight for 5 years. During that period it was not profitable and there were relatively minor transgressions. But as soon as this oversight was lifted it all changed.

Reverting to type: Doing it again

The neoliberal discourse was all embracing and could not credibly be challenged. Tenet had not abandoned its beliefs or its deeply ingrained and once admired business acumen. It was what it was known for. It had never accepted that these were at fault. Its executives had already seen a new opportunity in the DRG system.

High risk major surgeries were not profitable under the DRG system and to protect these patients, and ensure that hospitals would continue to treat them, a system of additional outlier payments was created. Tenet did its sums then adopted a policy of building and equipping hospitals and contracting with staff who would do surgery that earned these additional payments. The policy was openly described as pursuing a high volume of “high-acuity specialties, such as cancer and cardiology”.

Profitable again: Tenet was soon making huge profits again and the stockbrokers and market were ecstatic about this recovery. The company had not lost its touch. Its most profitable hospital was the Redding Hospital, in a country town in California. Much of this profit came from a cardiologist and a cardiac surgeon who were supported by the company.  They soon had a reputation that drew patients from far away. The company had built a new large cardiac wing to accommodate the work these doctors were doing. It was described as “a thriving medical center with a strong local marketing campaign replete with billboards, advertisements and even a ‘put a little love in your heart’ campaign in 2001”.

Filling in the gaps: To follow the story we need to return to the Tenet/NME CEO of AME whose business skills were so admired that Australian banks made loans to AME dependent on his continued employment. In the court transcripts that finally forced Tenet out of Australia a doctor had made allegations in regard to unethical incentives in a contract he was pressed to sign by this administrator and his staff – incentives requiring him to admit and treat more patients. He went to court instead. By that time this administrator had already been awarded the company’s “Circle of Excellence” award because of his outstanding performance.  Neither he or any of his staff appeared in court to give an alternative explanation.

His successes in dealings with doctors were so admired that in spite of these allegations and court documents being made available to Tenet’s ethics committee, when he returned from Australia to the USA in 1996, he was appointed to be head of Tenet’s Physician Services in the USA. In the corporate discourse incentives were a part of doing business and were not seen as problematic. Laws prohibiting kickbacks to doctors were an impediment to be circumvented. All companies sought ways of attracting doctors in any way they could.

By the early 2000s this administrator had been promoted further and he was now a vice-president in California and in overall charge of the Redding Hospital. Stephen Klaidman in his 2007 book, Coronary, described what happened. He indicated that this vice president personally participated in the negotiation of contracts with the two doctors. He took a very close interest in this hospital and was the go-between between Tenet’s most profitable hospital and the company’s board. He personally took the latest performance figures from Redding to board meetings.

Back to the story: Once again it was not regulators but whistleblowers who blew the whistle on the two different but related scams almost simultaneously in 2002.

In Redding: The first was a priest, an ethicist who underwent tests and was advised that he needed urgent surgery on his heart. He had friends in a nearby state and he decided to go there - only to be told that his X-rays were normal. He confirmed this with several additional opinions before phoning the Redding hospital to tell them what was happening. They stood behind their renowned cardiologist and urged him to return for surgery. He went to the FBI instead. They made inquiries then raided the hospital.

At the New York Times: The second was an analyst at the New York Times who was analysing company performance. He was staggered by the vast number of outlier payment that some hospitals were charging Medicare and Insurers. Tenet was the main offender. It was clear that large numbers of outlier charges were not valid. This was a form of fraud known as upcoding - charging as if the patients were sicker than they really were. The newspaper went to the FBI and assisted with the investigation.

When the scandals broke it was found that between 700 and 800 patients had been subjected to unnecessary open heart surgery that they did not need. Many had been harmed. Some had complications and a small number would have died. Problems were then identified in other hospitals. My rough estimate at the time was that the company eventually paid somewhere around $2 billion in fines and settlements.

What had happened: Governmentality

Controlling Discourse in the health debate: In the USA there was debate about corporatization in the 1980s but while politicians and critics squabbled the market took control of the discourse and imposed its own solution on health care. As critic Robert Kuttner indicated in a 1996 paper about Columbia/HCA, the largest hospital owner in the USA "Columbia/HCA insists that medicine is a business, and increasingly imposes its rules on the competition game." Politicians wedded to neoliberal patterns of thinking accepted a fete accompli and legislated accordingly. There was also a strong contrary discourse in the community. I indicated in my material that “all the legislation that does limit corporate excess has been in response to public anger and advocacy”.

In 2000 I wrote about studies that revealed the vast sums donated by health care companies to politicians during the 1990s and how closely health care voting patterns followed corporate funding of political parties. I indicated that “vast sums are spent in advertising by corporate groups who are able to control the perceptions of a large sector of the population by employing skilled public relations groups”. The way discourse was controlled and focused is clear.

The Redding hospital had set itself up as a heart centre in the 1990s spending $2 million on advertising. It was soon doing a high percentage of procedures on its patients. It ran heart screening programs across the region.

But some were suspicious and there had “been whisperings in the community and elsewhere”. Redding’s incidence of bypass surgery was “more than double the statewide average”. Instead of speaking out “HMO firms and some medical groups pulled out of the Redding area, saying they were losing too much money because the filing of health-care claims was off the charts”. Doctors in the hospital and across the town had complained that unnecessary surgery was being done but the hospital attributed this to jealousy on their part and dismissed the complaints. Attempts by doctors in the hospital to set up a quality review process into the cardiac unit were blocked by management.

Discourse and power: The company and the hospital administrators were proud of their creation. The hospital ran screening programs built around scare advertisements warning of the risks of heart attacks. Patients came from all around the country to have their operations there. It was popular so there could be no doubt about the care. The image was the reality for them. They insisted that their market discourse was the dominant reality and expected it to be part of the identity of the doctors, the staff and the community.

For these companies ‘excellent care’ was essential but in practice it needed to be only an image or token and did not need to be real. The discourse sought out and fostered those who were susceptible and would internalize the discourse. It ejected those who looked at what was happening and found reasons why they were not credible and so could be discounted. But even in the hospital there were those who were unhappy.

Creating a mirage: The cardiology centre in Redding, a relative backwater did not develop because leading doctors were recruited to go there. It was entirely a manufactured entity created by Tenet in order to make money. They created the image and the discourse that promoted it. They needed doctors who would identify with their practices and make money for them and whom they could turn into experts.

The cardiologist whom they had marketed and used to build the mirage was not even board certified as a cardiologist. He had “never completed a post-medical school residency program in any specialty”. He had the right personality and looked good. He became a local hero. They built his reputation by marketing and by protecting him. The surgeon who did the operations was not widely recognized in the profession either. In writing about Tenet’s policies and practices at the time I indicated that “Tenet turns these doctors into leading experts widely admired and trusted by the community”.

Susceptibility: The cardiologists was not educated in the USA but received his specialist training there. His training had been patchy at best. He “trained in New York, moved to Cleveland and then made a rapid transit of Orange County, working in seven hospitals in little over a year”. This suggests he did not fit in there well and they may have had problems with him. It is clear that he had an enormous ego, was supremely self-confident, very critical of others and readily found fault. He was very ambitious. My own experience as a teacher leads me to suspect he would have been very skilled technically (good hands) so would look impressive, but that his clinical skills and his judgement were lacking. He was soon seeing things on X-rays that simply were not there, but because of his personality he had no doubts.

People like this are difficult to deal with at the best of times and when you turn them into the leading figures they have always wanted to be it becomes a major problem. He was able to fill a role and an image as a successful and gracious philanthropic pillar of society. He relates well, indulges his hobbies and other skills and goes to lengths to help the people around him. He believes in himself. There have been examples in Australia! The profession finds them difficult to manage but is getting better at it.

Govermentality: To explore the way power, discourse, and governmentality worked you can read between the pages of Kaidman’s book “Coronary” but he does not use these concepts. There was a senate inquiry and doctors from the hospital explained how it happened. I wrote several web pages about this at the time and these quote from press and documents.

Tenet was deaf to any criticism of its business practices. Instead of acknowledging its failings and addressing them when the new scandal broke Tenet, as it had done in 1991, boasted of its internal review but refused to release it. Blue Cross claimed that at another of Tenet’s hospitals 59% of the coronary bypass operations were inappropriate. Tenet denied this and responded by suing Blue Cross for cancelling its contract with the hospital. There were problems in several other Tenet facilities at this time.

When I wrote about this in 2003 I indicated that the corporate health care marketplace has not worked and we must accept this. I pressed for “frames of understanding which see health care as a beneficent service provided in the community by the community and oriented to care of the community rather than to profit”. At that time, I suggested a cooperative integrated primarily not-for-profit system which was a partnership with the health professions. This is much what long term US health care critic and advocate Professor Arnold Relman advocated. Sadly, it is too late for that now. We need to look for a different way forward.

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The problem of regulation

The use of power to shield and control information.

As I indicated in 2007 in regard to the more recent scandals “the government does not levy fines which would force large health care companies out of business or which would seriously compromise care”. This company was a major political donor and was closely linked to politicians. Its members were on central establishment bodies and organisations. Leading politicians from both parties were on its board and would have been doing their best for the company. It was also clear that Tenet was not alone. Many other businesses were soon doing similar things. Among those maximizing the outlier system “were locally operated not-for-profits”. The neoliberal agenda in health care was under threat.

Power and governmentality

In writing about what had happened with Tenet in 2007 I indicated that the “handling of Tenet's fraud prosecution is a glaring indictment of the way democracy is practiced in the USA”. The unnecessary heart surgery scams were only “one of a matrix of unsavoury and perhaps fraudulent practices” resolved in dribs and drabs. After a global settlement in 2006 the documents were sealed and we do not know “exactly what Tenet was charged with and what the documents and evidence actually show”. Settlements were reached that “didn't admit any wrongdoing”. A committee of shareholders indicated that “As far as we can tell, the government has learned nothing from the last 13 years of dealing with this company. The same formulas are used with the same ineffective results and disastrous consequences. And the public's ability to learn more is severely hampered by the same settlements that seal government files”.

Regulatory blindness

The close oversight by the Department of Justice only expired in 1999 but these policies and the problems in Redding started before this although the scandals did not break until October 2002.

The Centre for Medicare and Medicate Services (CMS) is responsible for paying and for vetting the Medicare bills sent in by the hospitals. They did not notice anything wrong. It was a market analyst working for the New York Times who saw what was happening. The CMS is also responsible for the actual oversight of care in hospitals, but this oversight was delegated to the states. Oversight of Redding hospital was conducted by the Californian Health department under contract. A press report indicated that “For years, warning signs at Redding Medical Center were missed by regulators and accrediting organizations”. In the mid-1990s researchers using Medicare’s own data had found that “Medicare patients in Redding were twice as likely to have open-heart surgery as patients in San Francisco and other California cities”. No action was taken.

Problems were eventually detected, but Redding refused to accept this or to do anything about it. The regulators then allowed Redding to get away with it. It was referred to the federal Medicare department where Tenet’s ally Thomas Scully was in charge.

In 1999 a team from the California Department of Health Services, which is paid by Medicare to investigate complaints investigated a death at Redding and found problems including that “medical staff refused to review medical charts”. In spite of promises to fix this a later inspection “found that cardiac doctors were not submitting data for review to the hospital's quality-assurance committee”. There were more promises but the two doctors still did not participate because they were too busy. In late 2002 "it was almost the same as three years ago."

The regulatory discourse

In 2007 I listed some of the reasons being offered at that time for both government regulation and accreditation’s failures. We can see them in terms of discourse, power and control of knowledge.

  • I listed political donations and friendships. Senior executives and politicians come from the same strata of society, shared friendships, played golf and support one another. Political donations help and politicians were invited on corporate junkets. It is here that the discourse is developed and shared. Politicians and senior regulators come to see things in the same way.
  • Further down the pecking order, accreditation oversight staff and management are drawn from the same corporate pool of people so they think similarly. There are often close relationships between both sets of staff.
  • Senior members of companies are on accreditation boards. People who challenge the prevailing discourse and explanations/justifications are not credible. A report from the General Accounting Office's review of the JCAHO revealed that the JCAHO accreditation missed 80% of failures to meet Medicare requirements when compared with state based inspections.
  • Tenet had two representatives on the JCAHO board during the period of the 2002 scandals. It made a show of aggressively inspecting other Tenet facilities after the scandals were exposed in 2002.
  • At another Tenet hospital management stopped staff from telling surgeons that sterilization of the instruments they were using had failed because the surgeons would have cancelled operations losing money. When a surgeon reported this to the JCAHO it sided with the hospital and accepted that this was reasonable.
  • Oversight bodies are underfunded and findings are regularly challenged by companies employing the top lawyers. The companies win cases and force acceptance of their interpretations of the facts. The prospect of lawsuits has discouraged regulators in the USA and the UK. Australia’s quality agency has also lost legal challenges and had to pay expenses. We don’t know if this is impacting on their activities but it is inhibiting.

Controlling regulatory discourse from the top: In 2005 The Washington Post wrote a multi-segment article Bad Practices Net Hospitals More Money indicating that there is little incentive to improve and strong pressure to game the system or do a minimum. It found that Medicare’s “oversight system is fragmented, underfunded and marred by conflicts of interest”. The “amount we spend on quality is a pittance” and “Medicare has outsourced many enforcement activities to private groups that have overlooked or missed cases - - - in many cases the data aren't analyzed”.

The Washington Post used a Tenet hospital doing cardiac surgery as an example. I had also written about it and the failure of any regulatory effort until “106 patients took to the courts and the press picked up the story”. Insects were breeding in the ceilings and landing on operation sites and there were other breeches in sterility. Tenet refused to close the theatres for repair because of the loss of business and instead “had bug zappers in the operating theatres”.

The CMS regulators accepted the hospital's plan of correction and then, when nothing happened, fined them US $323,800, which it reduced to $95,000. Having friends in high places helps. The courts were more effective. The patients who suffered from infections were awarded $31 million.

The Post suggested that the JCAHO "inspections are farces” and that there was “absolutely no comfort in knowing that a hospital is JCAHO-accredited." Even when Medicare was threatening to close down this hospital the “Joint Commission continued to offer its powerful stamp of approval

Whose discourse counts?: Here as in other instances Medicare warned that it would stop paying but it never did so. As in similar situations the hospital could still “tout its heart program as among the nation's best”. Except for press reports, which only some read, the public discourse, the one that everyone participated, in bore no relationship to what was happening.

While press reports and research showed that those who were being paid most were providing the worst care those who controlled the public and political discourse had too much to lose from addressing the issues and nothing happened.

As I indicated then what is described are simply the mechanisms as “the power of the market - works itself out”. I gave the following examples of how regulation was controlled. These were people with power who controlled the discourse around the management and regulation of health and aged care in the USA.

Example 1: President George Bush appointed Thomas Scully as head of the federal Medicare policy and oversight division. Scully had been chairman of the Federation of Health Care Systems in Washington for many years. This is the body representing and lobbying for the large for profit hospital corporations in the USA – driving the corporate discourse. Its directors and staff come from the big companies. Michael Focht, COO of Tenet was a director. He had been in charge of the international division in Singapore at the time the allegations were made. Michael Ford who was the subject of allegations in Singapore was on its ethics committee. Scully refused to acknowledge information questioning their suitability to represent and lobby for the industry.

Scully was the driving force behind a very controversial bill which gave drug companies vast profits from Medicare. When Scully left he was given a special dispensation to negotiate for his next job. He had many in the drug companies to choose from. He elected to lobby for them all.

Example 2: Senator Robert Kerry who was once a Democratic presidential hopeful was on Tenet’s board prior and during the 2002 scandal. Jeb Bush, the president’s brother and governor of Florida followed him. There were powerful voices setting the regulatory discourse for a company whose chairman was one of the largest donors to George Bush’s presidential campaigns.

Protecting reputation: The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) is commonly seen as a global leader and model of accreditation practices. It sets the discourse for accreditation globally. The JCAHO's history is of a series of failures. Each time followed by renewed public claims to greater rigour but they never seem to tackle the key problems in the organisation itself. In 2003 in the wake of its failures in the 2002 Tenet scandal the press reported “The Joint Commission defends its reputation. But it has also pledged to revamp its entire accreditation program because of /the need for major changes in the quality oversight process.’" It seems to ‘put this behind us’ and moves on leaving its failures behind and soon forgotten. It did the same after its failure to detect any of the problems in the 1994 scandal.

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Governmentality and Aged Care in the USA

The corporate discourse in aged care was closely aligned with that in health care and particularly with the NME scandal. During the 1980s some of the same people were involved. As a consequents aged care in the USA is in many respects a replay of what happened in the specialist hospitals and later in cardiology but in a different context.

Aged Care in the USA

It is interesting that a number of US senior aged care executives were trained by National Medical Enterprises (NME) in the 1980s. At this time, it owned one of the largest nursing home companies, Hillhaven. In 1989 Hillhaven was spun off as a separate company but with the same NME directors. As it was not part of the scandals that broke in 1991 this connection is not common knowledge. The nursing unions during the 1990s published a booklet criticizing the company under the title of “Hillhaven Unsafe Haven”.

Hillhaven was broke up in the early 1990s and sold to others. Many of its NME trained management staff went to those companies taking their ideas with them. But two of the most ambitious had already moved on in 1986. They established companies of their own which rapidly became very successful. One of those Andrew Turner founded Sun Healthcare.

Contacts in the UK had in 1994/5 warned me about Sun Healthcare and sent me information. I became much more interested in the US aged care system when Sun entered Australia in 1997. I used contacts in the USA to collect information about Sun. Some of this caused the Foreign Investment Review Board to be critical of it in 1997, and contributed to its failing a probity review in Victoria in December 1998.

While I paid most attention to Sun Healthcare there was intense concern about standards in aged care across the USA in the 1990s. I became part of a group who collected and shared information. I learned about the other large corporate chains at the centre of concern because of the poor care they provided. I reciprocated by bringing this material together in web pages on the Corporate Medicine web site in 2001.

Aged Care generally

Governmentality: Two discourses

Aged care corporatization started in the 1960s and Beverley Healthcare grew rapidly to become the largest. I wrote that

"it reveals the vast gulf between two worlds. On the one hand a very impressive and successful national corporation. It is admired and respected in the marketplace. It has close political links. Staff who have worked for Beverly are given responsible government positions. Beverly itself has no doubts about itself or of its place in the scheme of things. Others see Beverly as the ultimate evil empire. A company which deliberately understaffs and neglects frail and vulnerable people to fuel its corporate success".

It was the subject of several fraud prosecutions and settlements.

Confronting resistance: Other companies soon followed and the two conflicting discourses characterized the system, the one with power controlling the system and the other without much power in the community that experienced the system. The market discourse dominated where it mattered in the corridors of power and was sold to the public as part of the American capitalist way.

Community groups organized themselves and were supported by lawyers. They collected information and assisted individuals to mount actions for damages. This had a greater impact than government regulation and at the time of writing had forced several companies to sell up and leave states where damages were uncapped and where disgusted juries imposed massive fines.

At the time I wrote about this, companies were using their power and close relations with politicians to pressure state governments to place caps on damages in aged care. They succeeded in several states. The battle raged in Florida, the retirement state for wealthy Americans. Rich picking for the industry were threatened. I believe they succeeded.

The bonanza

Rapid growth: As in psychiatry, the combination of a free market, vulnerable customers and a loophole in the DRG funding system saw a massive corporate growth in aged care facilities in the 1990s. New facilities were built and there was an active market buying and selling family owned and nonprofit facilities. Sun Healthcare became the PACMAN of aged care.

Step down care: The loophole was in rehabilitation and step down care previously provided in hospitals and paid for in the DRG funding. This could be provided in nursing homes where DRG payments did not apply and where each item of treatment could be billed separately. Hospitals could turn more of the DRG money they were paid for each condition into profits by discharging patients early to nursing homes where they could be given large numbers of therapies. There were no restrictions and they could charge Medicare and insurers per item of service.

Companies like Sun Healthcare recruited therapists from around the world, made massive profits and expanded very rapidly over a period of 10 years. While it seems that there was extensive over-servicing and fraud in the industry, the former was never investigated and fines for the latter were reduced to avert a crisis as the industry collapsed at the end of the 1990s when the DRG loophole was closed.

Consequences for the aged care residents: Resources were diverted from the care of the frail aged who paid poorly and focused on employing therapists to treat the younger and healthier profitable rehabilitation patients instead. There were many press reports describing the extent of the poor care in corporate owned facilities.

Unlike Australia the USA collects data on failures in care and publishes them. Since 1994 researchers and even newspapers collected and published figures showing the poor staffing in the big corporate chains and their significantly larger numbers of failures in care than other for-profit and nonprofit providers. This was so bad that even California, a state that has not had a good record for oversight, blocked Sun Healthcare from building any more nursing homes until it had done something about the poor care provided to the aged in its facilities.

Governmentality and Sun Healthcare

Sun is a good example of governmentality based on a hierarchical management system and of the close links with politicians. Its founder was one of the first to exploit the DRG loophole and his success made him very successful and credible. His two key messages were for government to butt out and leave in to the industry and that there was plenty of fat in the system because you did not need expensive trained staff to look after the elderly (ie bath and toilet them).

This was a warehouse mentality but at the time it was music to a neoliberal political system faced by rising costs and an ageing population. He claimed to be an authority in aged care and was accepted as such by the marketplace and the community. His narrative and that of his company became the discourse of the marketplace. An article written in 2000 by his local newspaper after his fall from grace tells the story

Turner and Sun Healthcare - - the high-flying financial stars they once were - - - local business people cited Turner as a model of corporate success - - gobbled up enough properties to earn it the nickname Pac-Man ---- 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 - - - a speaker who would grab the attention of participants at an event to honor growing businesses, the organization chose Turner ------ The business community saw Turner as an entrepreneur certainly he demonstrated that he is a person of vision.

Source: From boom to bust The Albuquerque Journal 7 August 2000

Turner and his hierarchy of staff who set the discourse for the company spent their time in the company’s lavish headquarters with its expensive artworks collected by Turner. They managed the business but seldom journeyed into the nursing homes. One of the pages I wrote in 2000 describes Sun’s culture. It shows how discourses (I do not call them that there) developed in the marketplace and how Sun’s unrealistic discourse of "redundancy and fat in the system" contributed to the business machine that was so successful.

The discourse: Turner was scathing about government regulation and insisted the market would fix any problems saying “The quality of health care suffers because of governmental support and regulation. The system takes away incentives to improve”. He does not “see much of a future for not-for-profit homes”. Turner was a workaholic and he expected his staff to do the same. A press report describes the culture in its headquarters. It is headed “The cult of Andy” and indicates that “his presence is felt throughout the company” He is a visionary whose vision drives the company and “current employees speak with an almost missionary-like zeal about Sun Healthcare's work”. They had no doubts and conformity was required. It was “easy to see how a non-believer could fall by the wayside quickly. Sun is no place for doubters”. Those in his nursing homes had a totally different and very negative view of the man. At the time I described him as “a man who is totally out of touch with reality and he has a cult following who reinforce that illusion”.

When it came unstuck: The government finally pulled the rug out of the business by blocking the DRG loophole.  The company, like many of its competitors, was on the brink of collapse. Andy’s illusion remained and everyone believed that success would continue by modifying strategies. It was not until Turner was dumped and new management put in that the company, helped by more government funding traded out of bankruptcy. Thousands of therapists were suddenly jobless.

Turner was furious at being dumped and continued to proclaim his expertise and even succeeded in persuading some as he tried to form new companies. The press indicated that if the company had “paid more attention to business fundamentals, it never would have happened”. It was a company built on its own illusions and it collapsed because of them.

It was the attractive sounding illusions underpinning a distorted view of aged care knowledge, combined with self-confidence and charisma, that gave Turner the creditability to drive the discourse.  This in turn gave him power and allowed him to do what he did. He was feeding his interpretation of information into an establishment that was particularly receptive because it reaffirmed their neoliberal beliefs. Financial success was proof of their validity.

Other large corporate providers included Vencor (now renamed Kindred), Integrated Health Services (IHS), Genesis, Mariner, Extendicare, National Healthcare Corporation (NHC), Centennial and Guardian. I wrote about them in 2001.

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Regulating Aged Care in the USA

Accreditation is seldom if ever mentioned in relation to aged care regulation in the USA. That is a peculiarly Australian use of the process. In the USA aged care is regulated through the same federal Centre for Medicare and Medicaid services that regulates hospitals and whose senior staff, discourse and problems are described above.

In aged care the actual regulation and collection of data is done by the states on behalf of the central agency who confirm and impose any penalties required. The same discourses and power structures and reluctance to put anyone out of business have applied and are evident. Penalties are challenged in court by the providers and seldom seemed to act as a sufficient deterrent.

The corporate control of government and regulatory discourse is described in health care in the earlier sections. It is apparent in aged care too. Politicians embraced marketplace neoliberal discourse and saw people with similar views as credible. They appointed them to federal and state aged care regulatory positions.

Regulation - A chronic and recurrent problem: Articles in the press indicated that even in the 1990s there had been problems in regulating aged care for 20 years. There had been recurrent inquiries and repeated reforms. The issue of discourse and the close relationships between politics and providers had never been addressed - nor had their combined capacity to influence and dominate a trusting community’s thinking been challenged. Looking back with an understanding of power and discourse it is easy to see what was happening.

There were multiple reports critical of regulation, many blaming the close links with politicians and with political donations. Regulators were appointed by the state politicians who were more likely to believe their donors than their staff whose jobs could be on the line if their patterns of thinking differed from the dominant discourse.

There was also a revolving door and friendships between staff employed by providers and those employed by inspectors. It was alleged that unannounced inspections were seldom unexpected as a result.

Examples: Every few years a US newspaper does an in depth series of articles exploring the problems in Aged Care and the regulatory failures. Most are similar to that by the St Louis Dispatch in 2002. Australians who follow what critics are saying about our regulatory system would find what they said then familiar.

One of these articles examined the ineffectiveness of Ombudsmen. This is a good illustration of the way processes are set up to bolster discourse and look as if something is being done.   But they simply become tokens for what should be there. They exist but are ignored and not supported.

In 1972 a law had been passed forcing each state to appoint aged care Ombudsmen. The paper noted that a 1995 Institute of Medicine report had identified the “considerable barriers in most, if not all, states" experienced by Ombudsmen who have no power of enforcement and depend on regulators. The paper indicated that “More than two dozen ombudsmen interviewed by the Post-Dispatch from coast to coast say their attempts to blow the whistle on bad care are often dismissed by state regulators and demeaned by the nursing home industry. Their efforts, mandated by Congress, to push for legislative improvements are often ignored by lawmakers in their own states”.

Another article in the same series claims that “Weak laws, tight budgets, untrained staffs and lobbying from the nursing home industry all hamper government officials' ability to protect residents”. They indicate that despite “a veritable army of government regulators - - - scores of federal reports and academic studies make clear that these people are losing the war and, in some cases, not even fighting the battle.” Apparently “a lack of trained staff, ineffective regulations and fines, industry lobbying and tight budgets contribute to state enforcement problems”. A “1998 report by the General Accounting Office - - documented that state investigators routinely miss at least half of the most serious violations during inspections”.

Whistleblowers effective: That GAO (General Accounting Office) review was not the result of federal oversight. Once again it was the work of a single whistle blower who looked around the nursing home where her mother was being neglected, visited other facilities and saw the same things. She then took out and analysed many thousands of state death certificates. She found large numbers were dying of neglect. State authorities attacked her saying “I don't like people who prey on the fears of people in nursing homes or their families”. She obtained support and this brought her work to the attention of a federal senator who initiated the GAO inquiry. This confirmed her findings and more.

Families and advocates in California commenced an action against Sun Healthcare and another company alleging that “nearly 22,000 California nursing home patients died from malnutrition, dehydration, infections or internal obstructions that theoretically could have been prevented

In 1999, the General Accounting Office reported that, "neither complaint investigations nor enforcement practices are being used effectively to ensure adequate care for nursing home residents”.

Governmentality: Reading between the lines of these and other reports it is clear that politicians, senior officials and regulators, perhaps often because of inexperience too readily identify and see things the way the industry does. They respond by discrediting those who complain or who identify with and believe the complainants. The problems in regulation are too common and too widespread to understand in terms of personal failure. It seems so incredible that it leads to doubt and disbelief in the reports.

If we understand how discourse, the way we see and understand things, influences our perceptions of what is happening then it becomes clearer. The prevailing discourse as expressed by Sun Healthcare’s Andrew Turner illustrates why there was so little regulatory enthusiasm. “The quality of health care suffers because of governmental support and regulation. The system takes away incentives to improve.” Government should butt out and leave it to industry. Regulators were facing this attitude continuously and so were viewed negatively and with suspicion.

Example of regulators accepting corporate discourse: A particularly good example of the way provider discourse was accepted as the norm occurred with the company Vencor, a company that was later accused of a US$3 billion fraud, but which paid far less when this would have put it out of business.

Medicare (which paid for the elderly) and privately funded care both paid well and were profitable. Medicaid, a system for the poor and destitute was much less profitable. Medicare paid for only 4 weeks of nursing home care and after that period these residents were funded by Medicaid. They became much less profitable.

Vencor’s management decided that it could choose who it was going to care for and it was not going to treat Medicaid residents. It sent out instructions to staff that Medicare patients should be discharged after 4 weeks. Staff then misled and deceived these residents about their rights and sent them home to their families.

When a complaint was lodged with state authorities in Florida they indicated that this was a legitimate “commercial decision” and not a regulatory matter. Equity is not part of the corporate discourse in the USA. When the press published the story there was a savage community backlash which caused both the regulator and the company to back down.

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Power and Discourse in aged care in Australia

Turner’s reputation was at its height in 1997 and would have preceding him when he came to Australia. We don’t know if he was recruited by a government that was at the time welcoming large corporations like hospital owner Columbia/HCA and rehabilitation giant HealthSouth, or simply saw an opportunity. While he was here he would have feted as a world authority and spoken to many businessmen including those in the industry and to our politicians. He was charismatic and authoritative. He had no doubts.

Turner’s impact in Australia

Turner’s credibility, his charisma, his insistence that government should butt out and that there was plenty of fat in aged care nursing to be cut (ie reducing costs) must have been a political lifeline at that time.

Articles in the major US business journal Modern Healthcare written by consulting companies advising corporations on strategies for international expansion had only a year before urged them to “play on politician’s pain” before offering corporate solutions. We can only speculate!

Shortly after news of Sun’s proposed purchase of several small hospitals (suitable for rehabilitation) was published, federal Minister for Health, Michael Wooldridge, announced plans to revolutionise health care by introducing step down care.

This purchase required approval by the Foreign Investment and Review Board (FIRB). FIRB is only an advisory body and government has the power to ignore its advice. FIRB was supplied with a considerable volume of material including court documents supporting an objection to Sun's entry into Australia. NSW Health made a submission opposing Sun’s entry. After a short delay the purchase of the hospitals was approved.

Freedom of Information (FOI): A willingness to release information often gives an indication of what position a regulatory body took. As indicated above NSW Health and WA Health had advised against hospital licenses for NME’s subsidiary AME. Both released a large number of documents under FOI. Interestingly on this occasion FIRB was remarkably forthcoming in releasing documents and although its actual confidential recommendation was blacked out there was enough left to show that it was critical.

In addition, FIRB made the effort to explore the legality of releasing other documents some time later. These were Sun’s response to the objections indicating its aged care expertise and its plans to expand into Australia’s aged care sector. My impression was that FIRBs advice had been ignored. The government must have been getting desperate because Columbia/HCA’s promised $1 billion investment had already evaporated in a massive fraud scandal and HealthSouth had only bought one hospital. It too was soon to be involved in a US $4 billion fraud scandal.

The revelations in the FIRB investigation must have been a reality check for politicians because we heard no more about the health care revolution using step down care. Sun did not rush into aged care. Wooldridge refused to comment when NSW Health asked his opinion before approving hospital licenses for Sun’s hospitals indicating that hospitals were a state responsibility – this was even though Sun was purchasing a pathology business, a federal responsibility.

Turner’s impact: I have always maintained that Turner had a significant impact on the thinking of businessmen and for-profit providers and even on politicians. His arguments about leaving it to the market and staffing were simply too appealing to ignore and only a few politicians would have known about the issues that FIRB had with Sun Healthcare. By the time Sun and Turner had fallen from grace these ideas were established across the industry and people had forgotten where they came from.  Even the aged care minister Bronwyn Bishop was telling people you did not need trained staff in aged care.

I think the fact that there has been no requirement to publish staffing figures, and that our residents receive half as much care from both registered nurses and enrolled nurses and an hour less nursing each day than in the USA, is to a significant extent a consequence of the discourse in 1997/8 - supported and justified by Turner. This was a time when policy was being developed and neoliberalism was the driving force for this.

When Sun Healthcare failed a probity review in Victoria (some additional information to that previously available was supplied) at the end of 1998 this was published only days before Christmas and had little publicly. Sun finally collapsed in the USA and Australia in 1999 but by then the damage was done and few remembered the source of their beliefs.

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Aged Care Regulation

Probity abolished: It was only later in 1999 when government were finally forced to acknowledge documents sent earlier objecting to Sun Healthcare’s entry to aged care that it was revealed that probity requirements in aged care had been quietly repealed in 1997. They had over the preceding 4 years been effectively used by citizens to block government plans to bring large multinationals into health care. They must have seen this as a threat to their plans for aged care. Correspondence with the department revealed the nature of the discourse used to justified this controversial decision.

Explanations: The assurances included that there were processes in place to ensure the highest quality of care. The strength of the approved provider process and the assessments they did were asserted. They claimed that the extensive enquiries made related to the suitability of the applicant including for the provision of care. These included the applicant’s ability and experience in providing care and their financial management. Letters used the term ‘passive investment’ rather than owners to refer to owners who provided services through a subsidiary, but this was not immediately apparent. Passive investors did not need to be approved. Only the providers ie. those these ‘passive’ owners owned and controlled, would have to be approved. These standards would ensure “quality care and service to residents”. Facilities were allowed greater flexibility to determine staffing levels. Failures would result in sanctions.

There was no mention of probity and the writer was therefore asked about “checks of propriety, honesty” quoting from a 1994 letter explaining the assessments carried out by the aged care probity agency. An assurance that quality issues were still important was sought pointing out that Sun Healthcare and all those who had failed state probity reviews would readily have been approved under the approved provider process. The efficacy of accreditation as a means of maintaining standards was questioned in the light of the failure of this and other processes in the USA.

Another multinational: In 2006 CVC Asia Pacific a part of Citigroup purchased DCA, which owned Amity, Australia’s largest for profit owner at the time. Citigroup was a company with a record of social irresponsibility that had caused NSW to impose restricted licenses in 2002/3 after an 18 month investigation.

In this instance the minister assured the market that a change of ownership would not be impacted by regulation.  This was even before FIRB had assessed. It seems that any advice it gave would not have been taken. In further correspondence it emerged that Citigroup did not have to undergo any age specific evaluation and it did not need to apply for approved provider status simply because it was buying another provider – a passive investor that had every intention of actively improving the profitability of the providing company then sell it at a profit.

The minister’s discourse justifying all this was “It is through the accreditation system that the Government enforces quality standards in residential aged care, and ensures public funding is used appropriately. The ownership structure of the home does not impact on the ability of the Aged Care Standards and Accreditation Agency to enforce these standards”.

Since that time the claim that ownership had no impact on care has been repeated many times and strongly supported by the accreditation agency (now called Quality Agency) which has reported its data in a way that hid the real differences.

In 2007 in response to concerns about Citigroup and failures in aged care both the minister for health and the minister for aged care boasted of a new $1.6 billion package of regulatory measures to regulate aged care providers and provide greater scrutiny of sales. In fact, little happened.

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The Discourses surrounding current aged care and its regulation.

If we return to Australia we can look at the way in which the industry and the market has dominated the discourse. The Aged Care Roadmap which I have criticised elsewhere sets out the latest neoliberal policies. In mid-December 2016 we had a press release from the minister re-affirming the message of the dominant discourse. “We are rightly proud of the Australian aged care system. Internationally, it is well recognised that we have a robust and innovative quality framework in place”. Is this any different to the exaggerated claims made by Tenet Healthcare about its services when it entered Australia in 1991 and Sun Healthcare’s enormous confidence in itself in 1997. As in those cases this description is not the way many of those who see what is happening understand it.

The aged care discourse in Australia

For years the experts appointed to advise and assist the government have come from the aged care industry or the wider marketplace. The processes set in place have been based on what they advised or, if this involved any restrictions, were prepared to accept.

Whenever government has tried to constrain industry they have been faced by powerful and politically threatening advertisements and lobbying funded by sectors protecting their patch. A good example was the unsuccessful attempt by the Rudd labor government to make the mining industry contribute more to the public budget.  A major problem with the neoliberal agenda is that it reverses the power relationships in society.  Instead of the government of the people controlling the structures of society, the market, one of the structures of society is now more powerful than both and able to control both.  Foucault's concepts explain how the control of discourse enables this.

I have already looked at some of the political and market discourse. We can also track the discourse through those in Australia who have contributed to it.

Doug Moran: The Doyen of the private sector, Doug Moran claimed that he wrote most of the 1997 aged care act. Like Andrew Turner he was a very successful self-made businessman with grand visions that were not always successful, strong convictions and a very assertive personality. He boasted of his ability to get politicians to do what he wanted to. He was undoubtedly a powerful force in developing the aged care corporate discourse in the industry and in politics. The rise and fall of his hospital and aged care empires followed by the sad and very public crises in his family are illustrative. In examining his career and his problems in 2006 I wrote

Doug Moran is a self-made and self-educated man from a poor background. He has been a ruthless businessman and a strong advocate for the private sector. He has displayed supreme self-confidence, dogmatism and disregard for the views of others. His belief in himself dominated everything he did. - - - - He has persuaded others into accepting his views and supporting his ventures. He seldom if ever admits to being wrong. He has imposed his views and desires on others. - - - --- He is a man with a genuine mission tied into his pursuit of wealth. He recognises the power this gives him and uses it for what he considers is best. - - - He has close political associations and uses them quite openly. He has been a potent force in conservative politics

We can understand why Andrew Turner’s views fell on such fertile ground when he visited Australia in 1997 and why they would have contributed to the discourse.

Industry and market authorities: There have been large numbers of contracts to consultants who are invariable accounting or financial businesses working in the marketplace. Multiple inquiries have been chaired by economists or market oriented academics. Industry and like-minded people have populated committees. Industry representatives have been consulted and coopted to help structure the system. As in the USA there has sometimes been a revolving door with politicians moving back into prominent positions in the industries they once regulated or even becoming lobbyists for them.


Industry: The CEO of multinational aged care giant INTFPCompanyB was appointed as an independent expert for the Aged Care Financing Authority (ACFA) in 2012 during which time the ACFA advised on how payments in residential aged care should be made. He later became CEO of Private Equity structured, market listed FPCompanyI. While he was there the industry, led by FPCompanyI exploited loopholes in the system to gouge millions of taxpayers' dollars that fueled an acquisition frenzy.

Financial adviser and industry supporter: In December 2016 the company Stewart Brown which collects information for the industry to use in lobbying and advises providers how to be profitable won a $203 thousand contract (Nu CN3394134) to ‘Peer Review Aged Care Financing Authority’s data collection and reporting activities’.

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The accreditation process

Cutting Funding: As in the USA the government cut back on funding for regulation but as concern about its performance mounted there were forced to restore funding. Whether Andrew Turner had persuaded that this market was self-correcting or believed that regulation was unimportant is not clear.

The Government has reduced the number of staff in its Aged and Community Care Department, which handles complaints, and under-resourced its new aged care standards and accreditation agency, which carries out inspections. At the same time, it has given proprietors the kind of freedom to spend taxpayers' money they have dreamed about for more than a decade.

Source: No Guarantee This Horror Home A Freak Sydney Morning Herald March 7, 2000


The accreditation regime is still in place (now known as the Aged Care Standards and Accreditation Agency), but the government has been forced to double the amount initially allocated to support it, - - - .

Source: The challenge of regulating care for older people in Australia by John Braithwaite BMJ 2001;323:443-6 ---- 25 AUGUST 2001

Independence: In an attempt to create independence, regulatory bodies like the accreditation agency were set up as nominally independent. In practice they were largely funded by government or industry and their board were appointed by government. Invariably these came from the industry, the marketplace, government, politics or those seen by them to be credible.

The prized independence of the agency disappeared as soon as the extent of its failures were exposed by the Riverside scandal in 2000. This was only the first of a cascade of failures.

Bronwyn Bishop appointed her “Liberal Party campaign director, John Lang, to a position on the influential Aged Care Standards and Accreditation Agency (ACSAA)”.

The agency was accused of leniency towards her friend Aged care operator Millie Phillip - - - ACSAA assessors are said to have told the staff of one of the homes that "the owner knows people, nothing will be done". Both homes were subsequently given generous reprieves of several months to achieve accreditation standard.

The director of the Australian Nursing Homes and Extended Care Association, Mr Rod Young, last week expressed concern about political and bureaucratic influence within the ACSAA.

He pointed out that the ACSAA was originally intended to act as an independent body charged with achieving the highest possible standards in
aged care, but is now effectively functioning as an arm of Senator Bishop's Department. --- This is a complete abrogation of the original intentions of the ACSAA.

Source: Aged care scandals erupt again The Guardian June 27, 2001


The former head of the national nursing home watchdog, Penny Flett, claimed public confidence had been "shattered" in the Aged Care Standard Accreditation Agency because it was unable to do its job independently of government.

"The minister's style is very controlling," Dr Flett said in Perth. "She certainly doesn't step outside the rules and regulations, but the agency is not free to decide how it is going to do things."

Source: Handle with Care Sydney Morning Herald June 23, 2001

The agency’s distinguished CEO between 2002 and 2013, Mark Brandon OAM held senior executive and consulting roles in government, in private health insurance and aged care before, during and since that period. He was very much an establishment figure. He claims that during his time there the agency was “transformed into an internationally recognised educator and contributor to the promotion of quality in aged care”. His good relations with the industry were confirmed in January 2015 when he became Chief Quality Officer for private equity owned and market listed company FPCompanyI. His knowledge about the accreditation process must have been useful. Would any one dare find a facility mentored by their previous boss wanting?

Supporting the system: The agency’s future depended on government support. The accreditation agency consequently gave the government and the industry what they wanted. An example is a reporting process that supported key elements of the discourse such as that ownership did not impact on care when a proper analysis suggested that it did.

The theoretical underpinnings of accreditation create a discourse that conceives it as an organization that works with motivated providers to help them improve their standards of care and affirm when they show they know what to do. The vast majority of their contact is with the providers, particularly management so that its views are constantly presented. While interviews with residents and families are part of the process trouble makers would be kept away and this easily becomes tokenistic. Staff who do the accreditation surveys are often drawn from the industry and work for other providers. The dominant discourse is the neoliberal one and critical residents have to argue against the prejudice this brings.

The repeated failures of both the accreditation and complaints processes has given air to the dissident community and staffing discourse. It keeps resurfacing and challenging and apart from some political opportunism in 2005 government has had to keep beating it back.  I wrote a very critical analysis in 2006.

A subsidiary discourse: As explained earlier politicians have met any criticisms of the aged care system by making assertive claims to the robustness of the accreditation agency. This is part of the subsidiary discourse to bolster the dominant marketplace discourse in the face of strong criticism. Industry representatives have been equally assertive. In response to a strongly critical article in The Age on 19 Nov 2007, The CEO of ACSA, the body representing not-for-profit providers said

"LXXXX Sxxxxxx has unfortunately missed the central point - Australia has one of the most robust accreditation and complaints systems anywhere in the world.

The aged-care industry is highly regulated and accountable. The introduction of legislation to deal with elder abuse, our 44 accreditation standards, police checking and new complaints system demonstrate it isn't regulation or accreditation that is the failure in aged care.

As indicated there are some clear and conflicting discourses. There is the one that has come from the government and the agency itself which is invariably positive and full of words with strongly positive associations. The industry conforms to this in a general way but has complained bitterly about it being burdensome. It calls for less accreditation process to which the government has been sympathetic. It has been running a trial of less frequent accreditation in South Australia and has indicated that it plans to contract accreditation out to a competitive market."

A contrary discourse: This discourse comes from families who experience problems in care, nurses who feel it is gamed and so meaningless as well as the press and others who have looked at its failings.

The two conflicting and incompatible discourses were readily apparent at the Senate Community Affairs References Committee June 2005 inquiry Quality and equity in aged care.  The senate review, which was not dominated by the government, can be seen as a response to a previous more self-congratulatory review of aged care by the government controlled house of representatives.  This avoided contentious issues.
The senate review was very critical of the deteriorating levels of staffing and skills as well as the problems in both the accreditation and complaints schemes. Many of those criticisms are still valid.

Going to ground: The then labor opposition which allowed and encouraged this debate in 2005 put aged care in the too hard basket when it gained power in 2007. It failed to address these issues and bowed to industry by uncritically adopting and supporting the market discourse. In 2010 Labor bowed to the industry when it set up the market and industry supportive Productivity Commission Inquiry “Caring for Older Australians.” This led to the neoliberal based Living Longer Living Better reforms and so to the Aged Care Roadmap.

Reviews of the accreditation agency

In 2002/3 the first audit of the accreditation process established in 1997 was sympathetic because the agency had only been in operation for a short period. It was critical of the agency’s failure to collect data that could be used to validate its processes. The agency agreed to do so.

2007: The next audit in 2007 in the wake of the 2005 senate report repaired the damage done to the dominant discourse in the senate but did make some criticisms. It was delegated to consultants who were part of the same quality and process driven discourse as the agency and embraced the theories and language enthusiastically. The terms of reference were narrowed to avoid conflict.

The failure to collect any objective data recording failures in care in order to measure accreditation performance was justified by using the term “indicators” to refer to failures stating “The purpose of the indicators should be confirmed to the sector - - - the basis for the indicator development was the clear understanding that they were being developed not to measure performance, but as tools to assist aged care homes to monitor and improve the quality of their care and services”. They claimed that data about pressure ulcers, and weight loss were difficult to collect and were subject to so many variables that they were of little value in measuring quality - - “it is the action triggered in response to indicator data that determines their usefulness - - - they are only useful as far as they initiate and strengthen the continuous quality improvement process”. If we believe them then there was no way of objectively assessing the performance of providers of care.

The report also indicated that most staff found the process burdensome so confirming the industry’s view that it should be reduced. It also noted that the processes lacked sensitivity and noted that there was no specific objective evidence that confirmed the belief that accreditation improves the quality of care.

It ended up by concluding that the accreditation process was useful because a survey of the staff participating thought so. In referring to accreditation as regulator it indicated its approval stating “accreditation is part of a robust regulatory framework that is well grounded in good practice”.

In 2009 there was a review of the aged care accreditation process for residential aged care homes performed by the Department of Health itself. Submissions were requested and many including Aged Care Crisis and myself made critical submissions. In spite of correspondence and requests neither the submissions nor the report were ever published. No information about it was ever made available. It was allowed to fade away. We suspect that this was because of the content.

The industry breaks ranks: We don’t know what the consequence of this was for the agency itself but we do know that in 2010 it broke ranks with the official discourse and made a submission to the 2010 Productivity Commission claiming that being a regulator created a conflict of interest to its primary role of supporting the providers. It asked to be relieved of this burden, something the commission declined to do.

Response?:  Actual independence by 'independent government authorities' leads to those authorities being abolished. This rebelliousness may not have pleased the far right and when Abbott became Prime minister in 2013, Brandon left the agency. All pretense at independence was abandoned as the agency was transferred to the Department of Social Security under the deputy minister and given a new name ‘Quality Agency’. Nick Ryan, the CEO of LASA, the organization representing and lobbying for the for-profit and some nonprofits took charge of the agency becoming the new CEO. This is exactly what George Bush had done in the USA in 2001-3 at around the time that Abbott was health minister. Was he copying Bush by putting the fox in charge of the henhouse?

Genuine Feedback or a marketing exercise?: The neoliberal discourse was given an additional boost and the roadmap was publicised in 2015 in the Lets Talk About Quality public survey with questions designed to sell concepts and neoliberal thinking and get the responses they wanted. It was followed by a glossy report Lets Talk About Quality: Developing a shared understanding of quality in aged care services. This drove the quality message. Aged Care Crisis decided not to participate in this exercise.

In 2017 there is another public survey by the Department of Health, this time responding to the industry’s lobbying by asking for feedback on a proposal to reduce the accreditation standards from 44 to 8 leaving out several that refer to actual care. Once again it is focused on selling the ideas in the previous survey and the roadmap – giving the industry what it wants. This is going to impact negatively on the system and we need to document our concerns knowing that they will be discounted. The next step as the government has already indicated will be the privatization of the accreditation process, probably with providers able to select from agencies who will give them what they want.

Setting the neoliberal discourses against available data.

Data about failures in care is not collected in Australia. There has been ongoing criticism of the industry in the press since at least 2000 with families and nurse whistleblowers telling of their experiences. Large numbers of nurses have told of poor care in submissions to the senate workforce inquiry. The industry and politicians discount all this as isolated and infrequent. That is clearly not so.

Staffing levels in Australia fall a long way behind the minimum staffing and skill levels advised in the USA with a majority falling in ranges that authorities there would considered hazardous. Our residents on average receive less than half as much care from registered and trained nurses as in the USA and an hour less nursing care each day.

Incredibly the discussion paper for the new 2017 accreditation reduction survey reveals that research has shown an incidence of pressure injuries of 26% to 42% in Australian Nursing Homes. One in three residents in Australia with pressure injuries is a serious indictment of care. That the health department quotes these without comment attests to the extent to which the corporate discourse that pressure ulcers are not preventable has come to dominate government thinking. The original study found that making basic changes to care easily halved this incidence. Pressure injuries should be rare in well run and properly staffed facilities

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The Complaint System

Structure: The complaint system for most of its life has been under the control of a government department. Its staff and an ‘independent’ aged care commissioner have been appointed by government and work with government so are in constant contact with the neoliberal discourse. The aged care commissioner reviewed decisions about complaints but had no power to reverse them. One commissioner appointed was a lawyer whose practice acted for the providers and advised them. He had been an external director of a company owning nursing homes, one of whom was the subject of complaints. His next job after being Aged Care Commissioner was CEO of the not-for-profit provider organization ACSA.

Most of the complaints come to the complaint system from citizens or even staff whom the system itself often fails to meet and talk to. The system usually deals with the providers and their staff who are confident in their views and see complainants as trouble makers. It sets its own discourse (patterns of thinking) within the wider discourse. In a situation where there is such a wide power imbalance complainants are anxious and disadvantaged.

Disenchantment: The critical community discourse is strongest about the complaints system because this is where families come into closest contact with the regulatory system.

Early: There was intense unhappiness by 2000. There were reports that “complaints get lost in the bureaucratic system and unexpected spot checks by authorities are rarely carried out”. Another complained that “despite complaints being lodged with State bodies about the care provided - - - no investigation of the deaths had taken place”. Another had complained more than once, “but the Department's Complaints Resolution Scheme officer failed to contact him”. Witnesses and complainants were written off as “serial complainants”.

Many appealed to the Ombudsman who in his report “attacked the Federal Government's aged care complaints resolution process”. Instead of addressing the complaints reports indicated that “the report's release has been repeatedly delayed because of the department's objections to criticisms made by the ombudsman”. The findings included that “federal public servants running the scheme were confused and did not know how to deal with complaints”

The problems continued and in 2006 when the rape scandal broke and I wrote about this. Families were still complaining that the “aged care complaints resolution scheme failed to deal with their concerns”. Another indicated that “it was quite dismissive, the conversation. I felt extremely let down and extremely frustrated”.  I wrote a long critical account of the failures in accreditation and complaints with many quotes from press reports in 2006.

The Accreditation and Complaint Processes - Australian Nursing Homes Corporate Medicine web site 2006

Ongoing: These criticisms have been persisted and have resulted in repeated changes but none have changed the power structure and the nature of the discourse. The problems continue.

There is a power chasm between the government and the community discourses that gives rise to a sense of impotency. In a 2009 submission I described this saying “There is a sense of disenfranchisement, distrust, disbelief and suspicion” and commented on the “lack of transparency and the unsuitable and often meaningless nature of the information that is publicly available”. Terms like “wrinkle ranching”, “profit body”, and “people farming” reflected the disenchantment with the whole sector.

Staff were genuine: Elsewhere on these pages I describe the distress caused to senior staff at a meeting in about 2008 where the system they had spent so much time designing was heavily criticized. At that time an assessor was asked what the nurses involved had said about an incident. His response was that he had not spoken to them because they had been fired so were not credible – a reflection of the discourse in the department.

More recently a trained nurse complaining about her mother’s pressures ulcers was authoritatively told that pressure ulcers were inevitable. She simply gave up. That could only have come from a discourse that was a long way away from the bedside and nursing care.

Senate Review: In the 2005 senate review inquiry Quality and equity in aged care, the community discourse is reflected as “Submissions argued that the complaints mechanisms often do not work in the interests of consumers, and the mechanisms are unclear, unnecessarily complex and in some cases complaints are actively discouraged” and the “complaints mechanism is not accessible to people and not responsive”. And “members have given up - - - the overall impression is that 'their complaints are trivialised or are made by an over-fussy, neurotic or guilt-ridden family member'. - - - Evidence was presented during the inquiry detailing the fear of, or instances of, actual retribution and intimidation of residents.- - - - Evidence to the inquiry suggests that there are deficiencies with the operation of the Complaints Resolution Scheme - - - found this (intimidation) evidence particularly disturbing and reprehensible as these practices prey on particularly vulnerable people.”

Walton Review 2009: Professor Walton’s review of the system in 2009 acknowledged the dedication of the staff but found that “the department was trapped in regulations and obsessed with natural justice rather than resolution for the distressed resident and family - - - an inappropriate complaint system that did not serve residents well”.

In my submission to Walton’s review I emphasised 1. The disenfranchisement and disempowerment of the community, 2. A lack of on-site empathic person to person communication, 3. An excessive emphasis on process rather than resolution for the parties and 4. An almost total lack of transparency.

I commented that “witnesses are not interviewed, offered evidence is not examined and that communication is delayed and impersonal” and referred to “an arbitrary and largely impersonal and legalistic process concerned with rights more than resolution”. I said “Nothing infuriates and fuels distrust more than secrecy and distant bureaucracy”. Other submissions expressed similar views.

In my submission I suggested that for a complaints system “to be successful the community must embrace it and become involved. For this reason its implementation will require careful and staged introduction and close monitoring”. The system “requires community involvement, understanding and the sharing of responsibility” particularly if and when rationing has been accepted.

Walton’s solutions: Walton’s review confirmed what the many submissions complained of. Her solutions were to advise making the system independent of government, which was ignored, and to encourage resolution by forcing complainants to negotiate resolution with providers. She failed to recognize the nature of the discourses and the power imbalance which allowed providers to set the limits within which resolution could be discussed. She did not accept the recommendation that a local community structure should support and act as mediator in complaint resolution. Following her recommendation has made the situation much worse than it was and increased the risk of intimidation.

As indicated complaint handling is the sector where the dominant discourse has come under most pressure. There have been multiple changes but these have been done without changing the dominance of the marketplace discourse.

More independence: The Productivity Commission report in 2011 had also supported an independent commission for complaints. In 2013 Senior’s groups like National Seniors and Combined Pensioners and Superannuants Association of NSW expressed their concern about the system and the conflict of interest caused by its control by government.

Individuals who experienced the system complained that “they were met with bullying and indifference by the respective aged care facilities - and because, they say, the government channel of complaint, the Aged Care Complaints Scheme, has been too slow and too weak in its response”.

In 2015 the Complaints scheme indicated to a NSW parliamentary inquiry where it supplied some data that its system was “designed to support complaints resolution, not to support statistical analysis, and neglects judgements about the classification of a complaint”. This may have been part of the problem, but it is also clear that many who complain are left feeling that their problems have not been resolved.

Finally made ‘independent’: In January 2016 Walton’s recommendation was given form when the ‘independent’ Aged Care Commissioner replaced the former Aged Care Complaints Scheme. It was all transferred to her. The new arrangement, it was claimed, “supports independent and impartial complaint handling for Australian Government funded aged care services”. This was a step forward but most of the problems remain. The commissioner herself has been quite critical of the processes she has had to conform to and provisions that prevent her from being transparent.

In spite of this change complainants continue to be unhappy about their interaction with the system and it seems that the discourse and so the culture within the Commissioner’s re-organisation of the system has not changed it significantly.

Is there hope?: A more recent report indicates that “Aged Care Complaints Commissioner Rae Lamb has been meeting regularly with key sections of the Department of Health over frameworks that need to be considered in light of complaints she has been handling”. Will we see more of the same? Regulation can change the form of the scheme but for that change to have substance it also requires a change in the discourse. Will that happen?

In 2015 a trial of mediation in helping resolve conflicts in Victoria was successful and the authors wanted to “see mediation programs used before families go down the legal pathway to guardianship or administration”. This is what Walton failed to recommend. If community based mediation systems were available they would bring a different discourse, one with the power to define the nature of the discourse. That would be a giant step forward.

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Who does regulation serve?

What we see here is a regulatory system that has been set up within the neoliberal discourse in response to its own weaknesses and failures. While it is ostensibly to protect citizens, its primary function is to protect neoliberalism and the neoliberal state. Protecting citizens becomes a form of tokenism with which the neoliberals identify and to which they pay service. They believe in this and when they boast of the systems vigour this is genuine because for them the tokens are real.

Regulation is to protect the neoliberal state

Failures in care confront belief.  The hidden primary function of centralised and controlled neoliberal regulation is to control failures and protect the legitimacy of the neoliberal discourse. The approved provider system, the accreditation process and the complaints system consequently become tokenistic. These are structures and processes that are a core component of the neoliberal discourse. They are clothed in words like ‘quality, rigorous and world class’. In practice they become tokens - structures, processes, words and ideas that substitute in the discourse for the real thing that is not there. They are used to protect the beliefs and the system from its critics.

A. Legitimising the discourse

Regulation provides a critical resource for justifying and supporting neoliberal discourse and identity whenever it is challenged. It is used to confront criticism and deflect the challenge of logic or evidence.

1999 From The Aged Care Minister

Written on behalf of the aged care minister in response to an objection to Sun Healthcare describing its US conduct and the failure of US regulations to constrain it.

Letter on behalf of Minister for Aged Care 2 March 1999
(Regulations) The act and its principles 1997 provide a wide range of protections for residents. The legislation requires aged care service providers to meet specific obligations under the Quality of Care and User Rights Principles.

(Accreditation) Facilities will be assessed - - - to ascertain their suitability for accreditation.

A new Aged Care Complaints Resolution Scheme - - - is an independent, unbiased, free and accessible scheme - -

Letter on behalf of Minister for Aged Care 2 March 1999
- - must achieve Approved Provider status - - relate to standards of care provided - - - - granted only after extensive inquiries related to the suitability of the applicant, including the company’s directors, to provide aged care. - - - include the applicants ability and experience in providing aged care and their record of financial management.

Source: Correspondence about Aged Care 1998/9 Corporate Medicine web site 2006


"It's a very, very thorough accreditation system which has never existed before," she (Bishop) said.

Source: Bishop Says System OK. Herald-Sun March 2, 2000

The response to a critical article, Vulnerable elderly deserve better care in The Age 19 Nov 2007 describing problems in the system ACSA defended the system

Lxxxx Sxxxxi (Opinion, 19/11) has unfortunately missed the central point - Australia has one of the most robust accreditation and complaints systems anywhere in the world.

The aged-care industry is highly regulated and accountable. The introduction of legislation to deal with elder abuse, our 44 accreditation standards, police checking and new complaints system demonstrate it isn't regulation or accreditation that is the failure in aged care.

Source: Gxxxd Mxxxx, chief executive, Aged and Community Care Victoria, Melbourne

The response by LASA, representing mostly for-profits, and ACSA, representing nonprofits, to a critical television program in 2012 was to attack it and criticise objectivity then use regulation to back this up.

He said that cases of homes being sanctioned by aged care authorities, was proof that the system is working to ensure the highest possible standards of quality in aged care.

“Recent data shows that well over 95 percent of all 2,800 homes Australia-wide are fully compliant with all 44 accreditation outcomes. This is an outstanding achievement for any industry and demonstrates that the community can have confidence in the system.”

Mr Mxxxxx said it was important that the community knows that there is a system in place to ensure cases of poor care are identified and dealt with but that message was entirely missing in the report.

“The fact that over 95 per cent of aged care providers meet all 44 accreditations standards speaks for itself. We would support any investigation into isolated reports and complaints. These are part of the robust quality control system we have. It’s so poor, it’s dispiriting. There are so many important messages that the community needs to understand about aged care and this is what they do.

Source: Peaks slam Seven's Today Tonight: 17 Jul 2012

B. Protecting the industry and the government

A regulatory system that does not do what it claims to do because it has a prior more important function will fail to deliver on what it claims to be doing. This creates tensions among the regulators themselves and they will begin to have doubts. This is an even greater threat and the response to this situation is to place the regulator into more secure hands – the hands of the strongest neoliberal supports.

There have been multiple failures and unhappiness about the entire regulatory system going back to 2000, only 3 years after the 1997 changes. I wrote about these at some length in 2006. The failures and criticism persists.

Regulation by its very nature will identify and confront citizens and the state with information that challenges the neoliberal agenda. The regulators themselves will begin to have doubts and nothing is more threatening than questioning from this source.

Regulating and controlling the regulators: Government’s response to this has been to abandon all pretense at independence and place regulation in safe hands. In the USA President George Bush snr put Thomas Scully, chairman of the Federation of Health Care Systems, the body representing the for-profit corporations, in charge of the governments Medicare policy and oversight division, the body that regulates health and aged care in the USA.

In Australia the Accreditation Process was under criticism and no longer wanted to be a regulator. Previously nominally independent it was taken back into the Departments of Social Service in 2014, then later transferred to the Health department. It was renamed Quality Agency and the CEO of LASA, the body representing the industry was put in charge of it.

The latest neoliberal ‘reforms’ titled Living Longer Living Better are being heavily criticized and there are many examples of failure. The government in 2016/17 is once again promoting another change to the accreditation process under the Quality Agency. The 44 standards are being reduced to 8 and the oversight process reduced. This is being clothed in appealing consumer friendly rhetoric. Aged Care Crisis has made a submission challenging this.

A typical example of the consequences

Failures are ongoing.  What has been happening is illustrated by the April 2017 revelations of the abuse of residents in the government run Oakden facility in South Australia. Residents have been abused and mistreated since at least 2001. An independent review reveals that in spite of multiple documented problems little was done and the facility remained accredited. The unreliable ‘periodic reviews’ and the accreditation process were ineffective and simply ‘gave comfort’ to the state's managers, and allowed them to justify the continued operation of the facility to themselves

(The minister) the facility had repeatedly met Commonwealth accreditation standards and, where it had not, those concerns were generally addressed.

We’ve met the accreditation standards and as recently as February 2016 we were re- accredited up until 2019.”

But according to the review, the reliance on “failed accreditation” promoted a “sense of comfort” that Oakden was performing well, when it wasn’t.

The review reads: “It is an important lesson for all involved in trying to ensure that the best care is provided that reliance only on periodic reviews, such as accreditation, leads to a sense of comfort that may not be meritorious.”

From as early as 2005 until the present day, “the review did not find an appreciable difference in the overall level of clinical outcomes over that entire period”.

“Put another way, the problems in 2016 are seen as far back as one looks.”

Source: How the State Government failed SA's most vulnerable at Oakden (InDaily, 21 Apr 2017)

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Taking control of the discourse - The Aged Care Hub.

It is clear that there will be little change in the discourse while the neoliberal establishment has the power that control over regulation, data collection and data dissemination gives it. Foucault’s analysis focuses on the way the discourse is shaped and directed by those wielding this power.

The Aged Care Hub is a proposal that very deliberately puts the community in control of data collection and regulation and so gives then the power needed to determine the nature of the discourse about aged care.

This will challenge and threaten the neoliberal discourse.  Every effort will be made to discredit it and those who support ideas like this.  Believers will seek to persuade politicians and the community that it is not illogical expensive and not possible or a valid way forward. It will require united and concerted action so will not be easy but without it there seems little hope of real change.


Links to the Corporate Medicine web site

I wrote the majority of the pages on the Corporate Medicine web between 1996 and 2006 adding a small number of pages subsequently. There are several hundred pages. I have not directly referenced everything written above. The links under the sliders below go to the main access pages for major sections, to more specific pages about each company and to material that may be of interest.

Health Care in the USA

Overview of the USA linking to all US material

USA Site Map
The Health Care Marketplace in the USA


Tenet Healthcare & National Medical Enterprises (NME) (A summary of the many disturbing issues surrounding NME and Tenet Healthcare over the years with links to many other pages that expand on the issues)

The Psychiatric scandal


The 2002 Cardiac scandal

Coronary: A true story of medicine gone awry by Stephen Klaidman Scribner New York 2007

Tenet Healthcare's Redding Hospital: Unnecessary Cardiac Procedures I 2003

Tenet Healthcare's Redding Hospital: Unnecessary Cardiac Procedures II 2007

The fallout from the Redding Scandal 2007

From Singapore to Redding: A Long Trail to Follow 2007

Unsafe Theatres: Dangerous Heart Surgery in Florida 2007

The Stop-Loss and other issues

Tenet Healthcare; Fraud and the Outlier plus Stop-Loss scandal 2007

People and culture driving the discourse in health care companies

There are separate pages in addition to those linked above giving more information about the leaders of the different aged care corporations that were so problematic. These throw an additional light on the sort of people in charge, the cultures and the discourse of multiple companies.

National Medical Enterprises (now Tenet Healthcare)



King's Medical Centre in Canada

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Aged care in the USA

AGED CARE & NURSING HOMES ACCESS TO WEB PAGES 2001 (outline and links to pages describing multiple aged care companies)



People and culture driving the discourse

The following pages give more information about the leaders and the cultures of the different health corporations that were so problematic. They throw an additional light on the sort of people in charge, the cultures and the discourse.

Vencor aged care

IHS-Integrated Health Services

Genesis Health Ventures

Beverly Healthcare

Mariner Post Acute Network

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Health and aged care in Australia

Australian site map
The Corporatisation of Health and Aged Care in Australia 2007 (Overview page linking to hospital and other corporations)

How corporatization came to Australia (The Corporatisation of Health Care in Australia) (an angry page in 2000 describes the way the corporate discourse and power were used to marketise health care. Graeme Samuel had recently given a talk to the World Bank!)

Markets and the Aging Bonanza


The Accreditation and Complaint Processes - Australian Nursing Homes  2006

Early Australian Medical Entrepreneurs

Discourse as revealed by personalities, thinking and activities

McGoldrick & Edelsten

Macquarie Health


Mayne Nickless  Dalziel & Catchlove - -  Smedley A - - Smedley B


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Regulation in the USA and Australia

Tenet/NME 2007

Tenet Healthcare: Accreditation and oversight page 2007

Several short pages were written in 2000 and 2001

This was after Graeme Samuel, Chair of Australia's National Competition Council gave a speech to the World Bank warning that a market system was essential.  After all the information I had collected and circulated in the 1990s I was disgusted!

Surveys fail to Protect Nursing Home Residents from Abuse 2001

GOVERNMENT CONTROL OF HEALTH CARE: A sorry tale 2000 (written before the doctors stepped up in 2002 and put Mayne Health out of business and so checked what was happening)

Regulation in the USA 2000


Accountability 2000

Government Oversight: Regulation and Surveillance 2000

Regulation in Australia 2000

Why Regulation Fails 2000

The Collection of Data 2000

Monitoring Developments in the Healthcare Marketplace 2000

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