Friday was the last day for June 30-balancing companies to hold their AGMs without copping a ticket from the ASX and true to his bad boy image, Ed Bateman’s Primary Health Care hosted a last-minute shindig in the inner-western Sydney suburb of Leichhardt.

Dr Ed, an abrasive character not known for finessing his message, was obeying the letter of the law but shareholders seemed miffed by Primary’s Short St premises, which are basically a glorified doctor’s surgery.

The tension in the lead-up to the meeting was palpable — the Health Services Union has been locked in a bitter battle for the firm’s direction since Primary acquired rival Symbion for $2.7 billion last February. Primary is accused of adopting the slash-and-burn tactics of Big Pharma in order to temporarily boost its bottom line, and the internal dissent is bubbling away furiously.

Unions claim Bateman is obsessed with cutting costs at the expense of patient care and staff wellbeing — mild-mannered radiographers, sonographers and support staff at Symbion Imaging took three days of industrial action last week — their first strike in over 30 years after a drawn-out bargaining process. Primary is resisting negotiation on a new pay scale, saying staff aren’t earning their keep. In Melbourne’s leafy Eastern suburbs, customers turning up for X-rays are being denied treatment as work bans bite.

Bateman is trying to lower radiology costs by freezing out more expensive radiologists and is using cheaper contractors who can access information remotely. Despite the continued roll-out of large-scale one-stop-shop health centres, some less-profitable Symbion-owned practices have been closed — a few with less than a week’s notice — with patients arriving for appointments informed of the bad news via hastily-affixed signs taped to windows. A range of services are being centralised at Northern Health in the Melbourne suburb of Preston.

Primary shareholders were buoyed in August when the firm offloaded its pharmacy and consumer businesses for a combined $1.065 billion and announced a net profit of $56.6 million. Like its brethren in the pharmacy industry, Primary is sired to the taxpayer teat through Medicare-protected revenue streams. X-ray services are a licence to print money and health care sector analysts predict consistent growth at Primary in the range of 6 to 7%. But the union says it’s not the firm’s fundamentals at issue — rather it’s the noxious effect on staff and customers when the community’s need for essential health services and appropriate standards of care chafes with the profit motive.

But for Bateman, the rancour in the ranks could be small beer compared with the stoush brewing at Melbourne’s Epworth Hospital. The jewel in the crown of the Symbion’s imaging practice is located on level two of the Bridge Road building but the Epworth apparently has the right to kick out any new operator that wants to lease the space. The merged Primary/Symbion could fit the legal definition of ‘new’.

Primary may be barred from operating at the Epworth and the fight over floorspace is set to head to court next February. The hospital is apparently constructing its own radiography setup within the building itself — a sign Epworth CEO Alan Kinkade is confident of his case. Kinkade hasn’t hidden his hostility towards Primary and is said to be keen to take on Bateman.

The problems plaguing Primary are symptomatic of the firm’s questionable approach to health care that prioritises profit over need in much the same manner as ABC Learning. With staff and customers rebelling, Dr Ed would want to act quickly — both to prove he has a heart and to reassure the public he intends to build a sustainable business. Calls to Primary Health’s Leichhardt HQ went unreturned this morning.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey