WA News Trailblazers Dr Ken Jones – Building Dreams
Dr Ken Jones – Building Dreams
Written by Dr Rob McEvoy
Tuesday, 27 June 2017

 

Ken Jones’ life story is full of surprises. Most will remember his heady days with Foundation Health about the year 2000 when the company was locking horns with Revesco, Primary Health Care, Mayne Nickless and Westpoint Corp to acquire general practices and amalgamate them into bigger medical centres. What may not be known is that Ken had also entered the battle for his premature son, born at 28 weeks in August 2001.

The striving for his family and his model of the ideal practice continues today.

Just over 50 years ago he migrated to Perth from the UK with his working-class parents. He was 16 and raring for adventure. After completing his electrician apprenticeship, he headed to Port Hedland and Dampier for five years to seek his fortune. Working on the construction of power stations and large iron ore facilities paid well.

Creating the nest egg27062017-Ken-jones-electrician-1974Ken Jones in electrician mode

“I spent two years up there as a single man, went to England on holidays, then went back up north for three years with my first wife. We made enough money to buy two houses, one in Shenton Park and one in Leederville, and that gave us a good nest egg for the future. I didn’t have a mortgage throughout medicine!” he said.

A downturn in the construction trades in the 1970s enticed Ken to seek a “recession-proof occupation”. He crammed Years 11 and 12 into a single year at Leederville Technical College to gain a TAE score high enough for medicine.

“An impressive result for a work hardened tradesman, 13 years out of school, competing with some of the brightest academic minds in the state,” he said proudly.

In 1979, he entered medicine at UWA and describes the next six years as “probably the best years of this part of my life. Being a medical student was a thrill and a rare privilege.” He was enthralled by the whole scene – campus life, the hospitals, the students, the academic staff and the patients.

He started medicine aged 29 years with five other “oldies” and he recalls a nurse, farmer and mechanic among them.

“We’d hang out as a group during our six years in medicine. It was brilliant from a social point of view and a real privilege to go back and learn as a mature ager.”

He’d made quite a lot of money in the North West as an electrician. But to fund his way through his higher education he worked Friday and Saturday nights at the Sunday Times and the Western Mail, loading trucks and collating papers. He did this for seven years and also worked some of his holidays as an electrician.

He could not stand still. He spent a few years renovating houses and remembers putting proceeds into a deposit that earned 21.5%! In his final year of medicine his daughter from his first marriage was born.

Loving good medicine

He graduated in 1986, aged 36. Then followed three years at Fremantle Hospital, one year in general practice under the Family Medicine Program, then a year at KEMH and Wanneroo hospital doing obstetrics and gynaecology.

“Working on the hospital wards and in casualty was a dream come true. It was so good getting into other people’s lives, watching the specialists go into the operations, it was fantastic and the best years of my life.”

In 1989, his GP job at Whitfords Avenue Medical Centre under Dr Steve Jarvis established in his mind the model for general practice.

“This was the first substantial multidisciplinary medical centre in Perth. Steve knew the business well and I learned the medical centre model from him. After working a year there, I moved to a similar facility in Thornlie for another year.”

At the age of 41, Ken established the Belridge Medical Centre in Beldon.

“For the first year it was hard going. Interest rates were 16-17% on a $1million loan,” he recalled, adding he was pleased when a chance encounter with a Commonwealth Bank Manager as a patient led to lower interest rates and more relaxing times.

“It was the usual formula – bulk billing, 12 hours/7 days, pathology, radiology, chemist and physiotherapy onsite – an instant success; eight busy doctors within 18 months.”

“I had a lot of keen young GPs. It was different in those days [1991], you put an ad in Saturday’s West and GPs would work the shifts you gave them and take 50%. Not anymore!”

He opened his second medical centre in Joondalup in 1994.

Then divorce came and with it, the dividing of resources – Ken kept the medical centres.

The Foundation experience

“During the 1990s, there developed a professional disapproval of medical practice owners and GPs who worked in large bulk-billing medical centres. We were reproached for offering ‘5-minute medicine’, ‘never seeing the same patient twice’ and ‘ripping off Medicare’. The views of our College and the AMA were not encouraging.”

He describes these organisations as “very conservative” and he took umbrage at the bad publicity.

“I found this very offensive at the time and it was probably one of the drivers for me – I’m going to show that it can be done properly. I worked long hours, offered numerous minor surgical procedures, provided home and nursing home visits and delivered babies for 10 years. On top of that, I offered after-hours access and comprehensive onsite services. So the attitude of some of my peers and certainly my professional associations disappointed me.”

Looking for a new challenge, Ken developed an ‘amalgamation’ model.

“I’d identify willing GPs within a defined catchment; purchase their businesses; contract their services; relocate them into new facilities. I did not endorse building new facilities within a catchment unless I could fill these with existing catchment GPs. Mine was not a GP competitive model.”

He stopped practising in 1999, set up office close to the city and engaged a PA. They spent the year analysing almost every metropolitan general practice location in Australia. They looked at things like amalgamation potential, suitable relocation sites, possibility of co-locating chemists, lease-break costs, etc. (Remember, Google launched in September 1998, so it was copious notes.)

“During that phase, I bought and placed options on a number of medical businesses in Perth including Karrinyup, Spearwood, Kingsway, Madeley, Cottesloe, Rockingham and Bicton.”

In late 1999, an association with Michael Boyd, who was a shareholder of Sonic Healthcare, yielded a decision to list Foundation Healthcare on the ASX. They floated in January 2000.

Early milestones included:

  • Raising over $150m for acquisitions and business development.
  • Purchasing Clinipath in February 2000.
  • Completing purchase of about 30 businesses in WA in early 2000.
  • Purchasing medical centre group businesses in NSW, Victoria and Queensland in July 2000.
  • Relocating administration centre to Sydney in August 2000.
  • By May 2001, Foundation had 1000 GPs (6% of Australian GPs).
  • By late 2001, there were contracts to buy a large radiology practice and several large specialist groups.
  • Reported profit of $21m for FY 2000/2001, and capitalised at about $400million by EOFY.
  • Formed supply relationships with Lifecare physiotherapy and dentistry, Sonic healthcare, Sigma pharmaceuticals in 2001.

“It was busy, busy, busy – 18 months of rapid acquisitions and plans. I had big ideas. I thought Foundation would own 20% of general practice. I saw medicine from two points of view, from patient care and as a business. Creating a business from all the raw material that was around Australia was something that was good for doctors and patients.”

Business and dreams

“The business for me was a dream. My philosophy was being applied, that is, bringing family doctors into a really nice facility where they provided continuity of services and paramedical services. It was good model for patient and doctor in regards to long-term interest and income.”

“Today, many doctors are working in medical centres. It’s amazing how quickly it has happened.”

Some critics might say he paid too much for some practices and didn’t factor in that, once sold, contracted principals of some practices put their feet up. This made it more difficult to find staff to provide services on a seven-day basis, although Ken had no argument about the better lifestyle focus.

Ken married Tracey in the 1990s and life took off – fast!

“It all seemed to happen as a whirlwind in the th27062017-Ken-Jones-with-Preston2Ken Jones with his son Prestonird quarter of 2001. Tracey’s pregnancy went sour, I had to fly with her to Perth from Sydney and she delivered an unwell child at 28 weeks. She needed support.”

“My focus shifted from passion for business to supporting my family. I recommended that a new managing director be appointed and that I take on the role of integration and consolidation of our existing general practice business.”

“So I had some conversations with Michael Boyd and it was a key turning point for Foundation Health – these things take time, we ran a little behind and the market sensed that, and then I essentially withdrew and was replaced by Ralph Shreeve.”

“He said he would change the model – Foundation would not continue to endorse large medical centres but would basically treat GPs as referrers of radiology and pathology, which was entirely different to the model that was successful with the market and GPs.”

He said soon after Ralph announced his changes to the market and cancelled Foundation’s building program, the Foundation share price dropped.

“The banks started to look at lending ratios. The rest is history.”

“I had lost control of the Board. Clinipath, which was a great acquisition for us because it gave us a great cash flow, ended up going to Sonic, which I and the chief financial controller Richard Atkins opposed strongly.”

“Michael Boyd’s father Dennis Boyd was the operator of Lifecare dentistry and physiotherapy which was floated about a year before and was a flop. Michael and Dennis wanted Foundation to take on Lifecare to provide services in the medical centres and to own it. But we didn’t want that. There were arguments on the board until I left because I stopped turning up to management meetings.”

“Lifecare came into Foundation and then for 3-4 years Ralph Shreeve ran things from Sydney on a tight budget. The business was shrinking – then Sonic came in and took Foundation out and installed a new manager. I’m not bitter. I’m disappointed I wasn’t there to complete the plan.”

“By the end of 2002, Sonic effectively owned the business. Sonic appointed a new MD and the company’s GP leadership proved attractive, the former business model was restored and IPN is again the largest medical centre operator in Australia. They seem to have respect for GPs.”

The human touch shows

Ken virtually took a year off to spend with his family in early 2000s. Not one to adopt a quiet life, Ken said he unsuccessfully ‘retired’ twice.

He bought a retail clothing chain, expanded the business for two years, lost a lot of money and “learned it is prudent to stick to what you know.” Another venture was building up a substantial property portfolio, then the GFC hit and he was highly geared, so took some punishment.

He re-entered general practice in 2009.

“I still believe in the importance of maintaining a strong doctor/patient relationship. I have delivered 1000 babies. I see many families – some four generations – who have been loyal for 25 years. I am busy irrespective of the season. Large medical centres, if operated properly, are good for patient care.”

It is his relationship with patients that he thinks of when asked, ‘What gives you most pleasure?’

“Patients are like old friends. Ninety per cent of a consult can be chatter where people dump their emotional stuff on you. I’ve seen two cases today: one lady whose husband died last night and another whose brother hanged himself last week. While this might seem macabre, I get some satisfaction in giving them a target to drop their anger on and run through their most private thoughts. That’s why I say being a GP is a very special thing – people will tell you everything.”

“It’s about being a decent doctor – if I get a new patient and spend time with them and make them feel special you will have them for life if you keep doing that. If you are into quick medicine and getting them out so you can get the next one in, then the goodwill won’t stay with you. Goodwill has to be earned.”

“I’m best busy and will probably work for another 10 years. I love general practice and should never have left it. I was once an $80 million man. But money isn’t everything.”