Failure the model as NSW hurtles to American style health system

Louisa L and David B

Before the recent NSW election, the health minister announced a broad agenda to privatise the public hospital system. But it's hardly new.

In the 1990s a Business Council of Australia member, Accenture, advised the NSW Labor government on a wave of health corporatisation of services for NSW Public Hospitals and Community Health. They were set up for future privatisation. Who was the Health Department's advisor under the Coalition's new plan? Who else, but Accenture.

In 2004 Dr Tom Parry, then head of IPART (Independent Pricing and Regulatory Tribunal), mapped out the details. Two weeks after his recommendations were accepted by then Labor Premier, Morris Iemma, Parry resigned and started a part time consultancy for Macquarie Bank on $200,000 plus, to provide advice on private sector provision of services in the public sector. IPART was certainly independent of the needs of NSW people.

The profit grab is huge. Since 2005, NSW hospital pathology, food, linen services and warehousing have been corporatised into discrete organisations ready for privatisation. Recently the government has sought to privatise cleaning, patient transport, radiology, warehousing and much of out-of-hospital care.

In December 2014 Baird announced the contract to privatise NSW health system warehousing, covering 133 employees and five warehouses, at Concord and Sutherland in Sydney, Cardiff near Newcastle and smaller ones at regional Wagga Wagga and Orange.

Healthshare, the corporatised government-owned current operator, was confident of winning their bid for the contract. They prattled to staff they had the runs on the board, knowledge, expertise.

But One Link, a subsidiary of EBOS, a nominally Kiwi company won. It has no NSW warehouses, and isn't even in the phone book. It's scrambling to even begin operations. But, hey! It's private! Nobody even knows if it is cheaper! A disaster for patients awaits, on the backs of underpaid workers.

NZ imperialism? Hardly. EBOS is a Hong Kong based company with principals including a Filipino family and a former foreign minister.

Systems breaking down

Meanwhile, the new Northern Beaches Hospital in Sydney is to be privately owned and run, but built with public money after the government contracted Healthscope to build and operate it. In return for the dough, the government gets a few hundred beds for several decades.

Ownership of Healthscope is opaque, with investments channelled through US investment houses like Blackwater and superannuation funds. Healthscope has projects underway in four of the major Australian hospitals, including Gold Coast University Hospital, with more announcements expected soon.

Like the biggest operator of private hospitals in Australia, Ramsey Health, Healthscope has substantial operations in Southeast Asia, with a focus on the rising middle classes there. Additionally, Ramsey aims to cash in on medical tourism from Australia. Profit is always the bottom line.

The privatisation nonsense doesn't end there. Premier Baird says Perth's scandal wracked Fiona Stanley Hospital is the gold standard model for NSW hospitals. Serco, which runs gaols and brutal detention centres for refugees, runs all non-clinical services at Fiona Stanley: procurement of all goods and services; maintenance of engineering, building and grounds; cleaning, security, linen, catering, equipment and transport services; reception and administration. Serco's won key awards.

Yet families of patients bring basic items like catheters and dressings, because the hospital regularly runs out. The hospital is not meeting fundamental standards for sterilisation of clinical instruments. One instrument had pieces of bone stuck to it when it arrived for reuse.

The hospital's organisational systems have broken down. A patient known to this writer endured a merry-go-round of constantly changing doctors and poorly trained staff, because specialist nurses in a previous public hospital were sacked when it closed to make way for Fiona Stanley. As a direct result, he waited over two months in hospital for an operation.

Corporate savings are clear. The Health Services Union reviewed the pay rates of 21 classifications in the public and private health sectors. In every case private sector wages were lower, on average by $6383 per year. A cook receives $3865 less and a radiographer $8184 less.

Workers are starting to mobilise. In Sydney 600 non-nursing hospital workers joined the March 4 ACTU rally, despite Unions NSW running quiet on mobilisation. Thousands attended six regional rallies, including Wagga Wagga, Port Macquarie, Newcastle and Wollongong.

An attempt to sell off mega-profitable radiology services at Albury Hospital last year was met with a huge community campaign, which defeated the sale hands down, with catch cries of 'People before profits' and 'Save our services'.

Ramsey Health and Healthscope are driving headlong to an American system with the NSW government trying to clear the way. Whether its Perth debacle holds back SERCO remains to be seen, but they will continue to meet resistance.