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Monday, 30 August 1999
Page: 7995

Senator Brown asked the Minister representing the Minister for Health and Aged Care, upon notice, on 7 June 1999:

(1) (a) At the time that the Foreign Investment Review Board (FIRB) consulted the department, and when the Assistant Treasurer approved Sun Healthcare's entry into Australia in August 1997, was the Minister advised or did he ask whether Sun Healthcare was purchasing, or intended to purchase, facilities such as pathology laboratories, nursing homes and aged care facilities which are licensed by Federal authorities; and (b) what action did the Minister take.

(2) (a) Was the Minister advised at this time about the allegations of staffing problems and substandard care in Sun Healthcare's facilities on the one hand, and the contrasting claims by the Chairman on the other hand that there was `plenty of fat in the system' which he would cut; (b) was the Minister concerned by the Chairman's attitude to government surveillance, that government should `butt out'; and (c) what steps did the Minister take at a federal level to resolve this issue in the interest of Australian citizens.

(3) With light being shed on the substandard care in American corporate nursing homes, particularly Sun Healthcare's facilities, what steps does the Minister plan to take to protect Australia's health system from similar practices by Sun Healthcare or even from Australian corporations to ensure the priority is care over profit.

(4) What steps can the Minister take to assist and support state health departments faced with the task of assessing the probity of wealthy, FIRB-approved multinationals.

Senator Herron (Aboriginal and Torres Strait Islander Affairs) —The Minister for Health and Aged Care has provided the following answer to the honourable senator's question:

(1) (a) No.

(b) Not applicable, see (a).

(2) (a) No.

(b) No applicable, see (a),

(c) As indicated in (1) (a) and (b) and (2) (a) and (b) the Minister was not involved in the issue.

(3) Australia's health care system contains regulatory mechanisms to ensure that appropriate standards of care are met.

The issuing of a Commonwealth provider number for private health insurance purposes is contingent on the facility being licensed by the relevant State or Territory health authority. The State and Territory health authorities have sole responsibility for the licensing of private hospitals. This includes the responsibility to assess an applicant's suitability to hold such a licence.

Where a hospital is to be co-located with a public hospital the Commonwealth requires that the State or Territory health authority and the owner of the facility provide the following assurances:

. that people will be offered public patient treatment at the public hospital, or the option to be treated as a private patient in the public hospital;

. that access to public patient services will not be adversely effected by the proposal; and

. that there will not be any cost shifting to health insurance funds or privately insured patients.

The power of the Commonwealth to declare a private hospital to be eligible for health insurance benefit purposes is vested in sub-section 23EA(1) of the Health Insurance Act 1973.

In the case of residential aged care, Approved Provider status is necessary under the Aged Care Act 1997 (the Act) for a provider of aged care to receive Commonwealth subsidies. Approved Providers have responsibilities under the Act, including responsibilities relating to the quality of care that the Approved Provider provides and those concerning the rights of care recipients. Further, a residential aged care facility must be certified to receive certain benefits under the Act, namely concessional resident supplement and the ability to charge accommodation bonds.

If Sun Healthcare submits an application for Approved Provider status, it will be assessed against legislative criteria.

(4) The Foreign Investment and Review Board (FIRB), as well as consulting the Commonwealth Department of Health and Aged Care, also consults with the relevant State authorities on applications for foreign investors to acquire Australian assets/businesses. This consultation allows the State Government authorities to assess the probity of foreign investors.

The Department is always willing to assist State and Territory health authorities in relation to information on private hospitals.