Healthscope, operator of Flinders Private Hospital – and Ashford, Memorial and Griffith Rehab in SA – in receivership

The operator of some of SA’s biggest private hospitals is in receivership amid $1.4bn in debt, with thousands of jobs in doubt.

Flinders Private Hospital’s operator Healthscope has been placed into receivership. Picture: AAP /Brenton Edwards

Hospital group Healthscope – with hospitals including Ashford, Flinders Private, Memorial and Griffith Rehabilitation in SA – is in receivership with debts of more than $1.4bn.

Officials say it is “business as usual” at the affected hospital as liquidators McGrathNicol take control of the business, which operates 37 hospitals nationally.

A syndicate of banks and hedge funds that control Healthscope’s loans placed the company into receivership after being handed control by its previous owner, Canadian asset management giant Brookfield, earlier this month.

McGrathNicol has been appointed as receiver and the future of 37 hospitals, surgeries and clinics around Australia is in doubt as well as thousands of jobs.

Flinders Private Hospital as pictured in 2018. Picture: AAP/Brenton Edwards

More than 6000 nurses and midwives alone are employed by the company nationally.

A company statement said there would be “no impact on hospitals, staff or patients”.

“Healthscope’s parent entities have entered receivership, with its lenders appointing

McGrathNicol Restructuring to work with Healthscope management to complete an orderly sale of the business,” it said.

“The operational business, which runs the hospitals, is not in receivership.

“The group’s 37 hospitals all remain open and operating on a business-as-usual basis with no impact on staff, doctors or patient care.”

McGrathNicol’s intention is to transition all hospitals to new ownership, with no plans for hospital closures or redundancies. They will undertake an immediate review of the sale process to date, with a view to re-engaging with interested parties in the coming weeks.

Healthscope chief executive Tino La Spina said McGrathNicol have been provided with a $100m funding package by Commonwealth Bank to support operations during the sale process.

This is in addition to Healthscope’s current cash balance of $110m, and substantial additional asset backing across the group.

“All 37 hospitals continue to operate as normal and the appointment of receivers, including the additional funding, ensures a stable path to a sale, with no impacts on any hospitals, staff or patients,” he said.

The Adelaide Community Healthcare Alliance which operates Ashford, Flinders Private and Memorial hospitals on Monday commenced Supreme Court action seeking urgent orders requiring Healthscope to provide information regarding its current status and the impact on its contractual agreement at ACHA’s hospitals.

Under this agreement, Healthscope is responsible for providing the day-to-day operational

management of ACHA’s three hospital sites.

ACHA is reassuring patients, staff and medical specialists that operations at its hospitals continue as normal with no impact on services and jobs.

McGrathNicol partner and appointed receiver, Keith Crawford said: “We want to make it clear that the subsidiaries that own and operate Healthscope’s network of hospitals are not affected by our appointment to the shareholding companies.

“Our immediate focus is to engage constructively with all key stakeholders to ensure uninterrupted operation of Healthscope hospitals and continuity of best practice standards of patient care.”

“We will also work closely with Healthscope management to support any operational funding requirements via access to $100m of new funding from Commonwealth Bank while we pursue an orderly transition of ownership of Healthscope’s hospitals.”

Australian Medical Association president Dr Danielle McMullen said the Healthscope network is a key part of private healthcare delivery in Australia.

“We welcome the commitments given as part of today’s announcement that the operation of Healthscope’s hospitals will continue as normal and that additional funding has been provided to support their operation,” she said.

“We also welcome the receiver’s stated intention to transition all hospitals to new ownership, with no plans for hospital closures or redundancies.”

SA Health said: “SA Health is in communication with Adelaide Community Healthcare Alliance Incorporated (which owns the SA hospitals and is financially separate from the Healthscope parent company), they have confirmed there is no impact on the provision of services in South Australia.”

Originally published as Healthscope, operator of Flinders Private Hospital – and Ashford, Memorial and Griffith Rehab in SA – in receivership