NSW government seeking power to terminate Northern Beaches Hospital contract

The NSW government could take extraordinary measures to ensure the future of staff and patients at an embattled Sydney hospital.

The NSW government will have power to terminate the operating contract of the embattled Northern Beaches Hospital as if a default had occurred under proposed legislative amendments, following the tragic deaths of two children.

Two-year-old Joe Massa and newborn Harper Atkinson both died at the Sydney hospital in unrelated incidents since September, leading the government to ban any future public-private partnerships (PPPs) for acute care hospitals.

The state government will next week introduce amendments to a bill by Wakehurst MP Michael Regan, which would allow the government, if required, to terminate the contract of operator Healthscope as if a default had occurred.

It comes after receivers were appointed to Healthscope’s parent entities – which the NSW government considers a default – with the bill giving Health Minister Ryan Park power to issue a termination notice if an agreement is not reached.

Receivers were appointed to Northern Beaches Hospital operator Healthscope’s parent entities in May. Picture: NewsWire / Max Mason-Hubers

Treasurer Daniel Moohkey would also be empowered to ensure that compensation negotiations occur in a “reasonable time frame” and that an independent person would be appointed to determine compensation if an agreement is not reached.

Mr Moohkey said the decision was not taken lightly.

“We are now in a position where the Liberal’s privatisation mess means Healthscope’s receivers are negotiating the future of the Northern Beaches Hospital,” he said.

“While an agreed exit from this failed PPP contract remains my preference – I must ensure the government has the right to step in and protect the Northern Beaches community from this dragging on.”

Mr Park said the state government had “made it clear from the very beginning that we don’t support this sort of arrangement.

NSW Treasurer Daniel Mookhey said the decision was not taken lightly. Picture: NewsWire / Nikki Short

“This is a complex contract but the community deserves certainty.

“The other mob may have created this mess, but we are going to be the ones to clean it up.”

Healthscope is the country’s second-largest hospital operator, with a network of 37 hospitals across Australia.

Thousands of staff and patients were left in limbo last month after Canada-based Brookfield Asset Management offered to hand control of the company to lenders.

Despite an $100m funding lifeline by Commonwealth Bank and Westpac last month amid the search for a new owner, Healthscope’s future remains in doubt.

Earlier that month, Wakehurst MP Michael Regan introduced a private members bill to ensure no compensation would be payable on behalf of the state if the contract for the Northern Beaches Hospital was voluntarily terminated.

Health Minister Ryan Park would have power to issue a termination notice if an agreement is not reached. Picture: NewsWire / Nikki Short

With trilateral talks ongoing between Healthscope, its receivers, and the Northern Beaches Hospital Taskforce, the state government remained hopeful of a productive outcome, but reserved the right to commit to a voluntary termination.

At the time of the receivership, Healthscope CEO Tino La Spina said the hospital network would “continue to operate as normal” and that the appointment of receivers “ensures a stable path to a sale, with no impacts on any hospitals, staff or patients”

“There is no interruption to the outstanding care we provide,” she said.

“The receivers and management share the same goal of maintaining our market leading standards of patient care and protecting the business, the hospitals and our amazing

people.”

McGrathNicol Restructuring had been appointed to work with Healthscope management to complete the sale.

Originally published as NSW government seeking power to terminate Northern Beaches Hospital contract