As we are now entering a new phase where the Federal Government is encouraging Divisions of General Practice and a new breed of medical entrepreneurs to develop Medicare Locals and Super Clinics it is perhaps timely to remind those tempted by the new money to consider the perils of those past experiences.
A personal commentary made here by Socrates about the local situation in the Southern Highlands was deemed "offensive and defamatory" by one person named in this 1992 SMH article. Given that the informant insists on sending their letters to a third party it has taken some time for this message to get through to Socrates. However, now I know!
As a consequence, any personal comment previously made by me, on the content of this article and including the persons named in it, has been deleted.
On 16 October 1992, Valerie Lawson (Sydney Morning Herald) wrote:
"WHO CAN ever forget the medical superstar of 1985 - Dr Geoffrey Edelsten? He was the very model of a modern medico-entrepreneur with his blow-wave, his Porsche with the SEXY number plates, his pink helicopter and his trophy wife, Leanne.
The liquid flowing through the Edelsten medical empire was not blood, but money. It was fuelled by the profits from pathology and property, but while the empire grew the Taxation Office watched. Edelsten's practice of tax minimisation helped service his debt for a while, but finally the tax man pounced and Edelsten was bankrupt.
If Edelsten had not gone belly-up in 1988, he might well have swung into the next big phase of entrepreneurial medicine, the development of the high-tech private hospital and medical centre alongside Sydney's over-burdened and financially troubled public hospitals.
As it was, his former partner, Dr Tom Wenkart, and two other medical entrepreneurs, Dr Warwick Ruscoe and Dr Carl Bryant, seized the moment in 1988. Just as Professor John Dwyer of Prince of Wales Hospital has recently revived his plan to create a hospital-resort at Prince Henry Hospital, Doctors Wenkart, Ruscoe and Bryant contemplated planeloads of overseas tourists on a health pilgrimage to their luxury hospital resorts. The vision was state-of-the-art Taj Mahals offering high-tech medicine, all funded by private health insurance."
"What went wrong for the locals (Wenkart, Ruscoe and Bryant)? For one thing, timing. The Sydney hospital palaces - like so many of the city's new hotels - were conceived in the bicentennial year of optimism. That year, an overheated private hospital market saw bed licences trading at "astronomical sums", according to Dr Campbell. Then came the property slump, the recession, the rise in interest rates and a fall in private health insurance.
One investment banker sniffs: "These private hospitals were designed as Taj Mahals. The men behind them are salesmen with a vision. These things are designed as monuments to them. They are over-engineered and over-capitalised. You can buy private hospital beds now for under $100,000, but these new ones were costing $200,000 to $300,000 a bed to build."
The company which wants to build Northern Private alongside Royal North Shore was also given a financial infusion last year when James Hardie lent HCC$34 million. James Hardie is the biggest shareholder in HCC with 50 per cent; other major shareholders are Medibank Private and Leighton Holdings. HCC won the Northern Area tender for the hospital with a payment of $5 million.
Since then, the original plan for a 210-bed hospital has been scaled back to a 150-bed hospital costing $60 million. "Shareholders are looking at financing it themselves," said Dr Warwick Ruscoe, a consultant to HCC and its former managing director. However, James Hardie's group planning manager, Mr David Luke, said the company was also "talking to potential investors outside the company. It's difficult at the moment. A lot of investors seem uncertain".
The market is suspicious about James Hardie's commitment to HCC, believing it may offload its stake completely, as foreshadowed by company executives last year.
HCC also has the right to develop a private hospital on land it has owned for four years adjacent to Westmead Hospital, but this project has been put on hold indefinitely, Dr Ruscoe says.
In April this year, the council received an application from Macquarie for a 300-bed private hospital with a 150-room hotel attached, a medical centre and 80 medical suites, plus associated retail stores including a fast-food style of restaurant and parking for 1,266 cars. (The number of beds in the private hospital has since blossomed to 500.) On July 2, the council called a public meeting at which residents objected to the look of the building, its height and overshadowing effect and the traffic impact of the complex, in operation 24 hours a day.
Members of the Camperdown Residents Action Group who attended included Jenny Thompson and her law student husband, Peter Barley, who live directly opposite the planned service entrance of the private hospital in Church Street. Peter Barley remarked: "Wenkart's built an elephant and made the residents look at its arse."
Another objector at the meeting was Dr Harry Haber, a local GP and past president of the Central Sydney General Practitioners Association. Said Dr Haber: "The GPs think Macquarie should stick to its pathology. They want to open a large general practice business in the new hospital. If they do that, why should we not boycott Macquarie Pathology Services? They would also hope to capture all the private pathology work at the private hospital."
Dr Wenkart replied: "The local GPs feel endangered, but the days of the solo GP are numbered anyway."
