Health cartels merge: more profits, less service

BY JONATHAN STRAUSS

The recent purchase by Foundation Health Care of the Medihelp medical centre chain means 1000 general practitioners, about 5% of all those in Australia, will be contracted to Foundation.

Foundation managing director Ken Jones was reported in the November 15 Financial Review as saying his company planned to contract 4000 GPs within the next 18 months.

Jones projected high profit rates through reducing the local availability of this health care service: "General practice, if managed properly at big medical centres, will generate 18% or more in profitability."

Part of "proper management" is a push toward private billing, offering even greater profits than Foundation already makes through its public funding by Medicare, which at present provides 85% of its revenue.

Jones claimed "if patients were educated that a good service is being provided, they should enjoy paying more". But since doctors are ethically required to provide no less than their best possible service, the "education" patients face appears to be Foundation's monopoly pricing potential.

The increasing contracting of general practitioners in Australia extends corporate control of private health care provision. In the case of Foundation, the Financial Review reports it has a "strategic alliance with pathology giant Sonic, which owns about 10% of Foundation's stock".

From GLW issue 429