Banks step in to keep Healthscope running as receivers appointed

The Minns government is under increasing pressure to buy back the embattled Northern Beaches Hospital after its major private hospital operator, Healthscope, went into receivership amid negotiations to sell its 37 Australian hospitals.

Healthscope told patients and staff that hospital services would operate as normal, as the NSW government and other prospective buyers prepared to continue negotiations with the newly appointed receivers led by McGrathNicol partner Keith Crawford after months of uncertainty.

Healthscope told patients and staff that hospital services would operate as normal as its parent entities went into receivership.Credit: Renee Nowytarger

Healthscope chief executive Tino La Spina said “it’s business as usual” at all Healthscope hospitals, where 8700 patients are booked in for treatment this week.

“I want to make sure that every one of those people who are already coming into our hospitals, when they’re at their most vulnerable, aren’t unnecessarily worried as a result of the news that comes out today,” La Spina said.

“Our doctors continue to come here, and [patients will] continue to get outstanding quality care from our people.”

On Monday, federal Health Minister Mark Butler said his department had met the new receivers within hours of the announcement.

Butler said there would be no taxpayer bailout for Healthscope’s owner, Canadian-American investment firm Brookfield, which owes $1.6 billion to lenders and which has been unable to pay to keep its Healthscope facilities open, including Northern Beaches Hospital.

“This news will be highly distressing to the patients, staff and local communities that depend on Healthscope’s services,” Butler said.

He said his department had met the administrators and receivers within hours of the announcement to outline the federal government’s priorities and expectations.

Healthscope treats about 650,000 Australians each year, and employs about 19,000 staff nationally.

“The government expects all parties to continue to put patient care and workers as their priority [and it] does not want any of these important assets to be put in jeopardy to satisfy international investors,” he said.

La Spina said Healthscope would not need a bailout, and that it had received 10 credible, non-binding offers for the company.

He expected a new owner would be announced by mid-August.

On Friday, doctors told a parliamentary inquiry that Northern Beaches Hospital’s chronic understaffing and a dysfunctional patient record system posed significant risks to patients, piling further pressure on the state government to take control of the troubled hospital.

In April, NSW Treasurer Daniel Mookhey and Health Minister Ryan Park launched a taskforce to investigate the operations of Northern Beaches Hospital’s public-private partnership, which is under contract until 2038.

“[W]hat we are making very clear is we want to know who precisely will be in control of this hospital and this company when we are having to have complex conversations about reversing this privatisation disaster,” Mookhey said.

On Monday, Park said the government was in constant negotiations with Healthscope’s owners to return the hospital’s public services to government hands.

“We haven’t landed on the way forward yet,” Park said.

The government is also considering a private member’s bill by Wakehurst MP Michael Regan to legislate an end to the public-private partnership at the hospital without compensation.

Regan called on the NSW government to expedite the process of transferring the entire Northern Beaches Hospital – both public and private – to public hands in light of the receivership.

“Step up and urgently end this diabolical contract,” Regan said. “I dread that this development will mean even more focus on the bottom line, instead of where it should be, on staff and patients.”

Elouise Massa, whose two-year-old son Joe died at the hospital in September 2024 after a series of critical failures, said the move to receivership marked the end of a disastrous attempt by the private equity firm Brookfield to profit from the care of sick and injured Australians.

“This moment presents the NSW government with a renewed opportunity to return Northern Beaches Hospital to public hands,” Massa said.

“We continue to place our trust in the government to act in the best interests of the community and deliver this outcome as swiftly as possible.”

Health Services Union NSW secretary Gerard Hayes said the “sorry episode” proved there was no place for private equity in public health, and Northern Beaches Hospital must be the last such arrangement.

“This is why we have had absurd situations like the maternity ward at Northern Beaches Hospital being rented out as a film set,” Hayes said.

Australian Salaried Medical Officers Federation of NSW delegate Dr Tatiana Lowe said the average clinician did not care who owned a hospital, only that they were responsive to their concerns, “be it a system that is not fit for purpose, inadequate staffing or a clinical danger”.

“That is not going to magically change if ownership changes, whether it’s to another private operator or NSW Health. These are issues deep in the health system across public and private services,” Lowe said.

NSW Nurses and Midwives’ Association assistant general secretary Michael Whaites said: “The financial collapse of Healthscope is an unfortunate reminder about the dangers of privatising healthcare services and that Americanised healthcare does not work in Australia.”

Both options of taking over the public services, or both public and private services were still on the table, the state government said.

Crawford, who is leading the team of receivers, said: “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.”

with Angus Thomson

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