Background

Fountain healthcare in Australia dates back in the 1990’s. It was the rebirth of Formulab Neuronetics and the Giltnet companies that had failed earlier on. It gained tremendous success because of the innovative marketing innovated by Antony Richter who created artificial intelligence in the computer world. The technology boasted a parallel processing in reasoning. The Formulab artificial intelligence enabled human-like feelings, talk, empathy and even provide advice. The idea was promising and sent the stock prices shooting before the market forces rejected its idea leading to massive loss of the large capital reserve. Academics rejected this idea resulting in a voluntary liquidation in the late 1990’s (Jonathan, 2017).

The idea

The health care industry offered a potential of considerable economic gains. The industry had high competition. The investor Michael Boyd with his Sonic company took a different path in competition by establishing a group of interlinked firms in which they were the majority shareholders. An establishment of the LifeCare was initiated to deal with paramedics and dental services. The vertical extension advantages were reaped significantly in that dangerous path. The best thing was that risks taken by one company did not affect the shareholders of the other organizations with opportunities for intercompany referrals. Boyd’s majority shareholding protected Foundation from hostile takeovers (Carr, 2010). 

Development and success

The Foundation Healthcare started operation by buying the troubled Formulab with Boyd pumping in a new capital investment. Initially, referrals were occasioned due to the few pathology companies. Sometime later, it sold off all the pathology section and took more investments in general practice. The share value doubled within few months and initiated investments. The inflated share prices reduced cash investments as the shares were sufficient for making purchases. The acceptance by markets and banks expanded operations to Queens (Sobolewski, 2017)land, Victoria, South Australia and the New South Wales. Foundation health centres that accommodated the general practices.  

The economy

The general practices were vulnerable to break up. Most of the profit reaped was from GP’s as compared to the referrals. The GP’s started being underpaid and abandoned clinical services. Earlier in the 2000’s business analysis of foundation disillusioned its future, investments dropped, and the share prices fell (Jonathan, 2017).

Outcomes

Foundation Healthcare seemed too unlikely to be going under because of its significance to the founders. Some doctors used to accept shares as salary payment have been greatly criticized. The idea was meant to keep costs down. The hope of the GP’s comes from current incentives. In the mid-2000’s share prices have remained depressed and made referrals to the Lifecare company (Elizabeth, 2017).

References

Carr, R., 2010. Health care facilities. Whole Building Design Guide, 2(17), pp. 1-42.

Elizabeth, J., 2017. The gap in human resources to deliver the guaranteed package of prevention and health promotion services at urban and rural primary care facilities. Human Resources for Health, 1(15), p. 49.

Jonathan, E., 2017. Person-Centreed Care and Culture Change. Take care of the Age, 8(18), p. 6.

Sobolewski, M., 2017. Kowalczuk, Krystyna, The Reciprocal Effect Of Psychosocial Aspects On Nurses’ Working Conditions. Frontiers in Psychology, 8(1), p. 1386.