By Angus Thomson and Max Maddison
Taxpayers will not be left short-changed by any deal to take over the public arm of Northern Beaches Hospital, NSW Treasurer Daniel Mookhey says, after its private operators announced they were willing to return the hospital to public hands following months of intense community scrutiny.
Healthscope chief executive Tino La Spina said on Thursday it was clear the controversial public-private partnership was incompatible with the state government’s objectives amid widespread community concern sparked by the death of two-year-old Joe Massa.
Northern Beaches Hospital is partly operated by Healthscope.Credit: Roger Stonehouse
“We believe it is best for the patients, staff and the northern beaches community that it is returned to NSW Health, if that is the government’s preferred outcome,” La Spina said.
“In the current circumstances, we believe NBH will operate more effectively as part of the public hospital system and its future is assured.”
Healthscope would continue to operate Northern Beaches private hospital, La Spina said.
Treasurer Daniel Mookhey said the government would respond in its own time, and would not allow Healthscope to “make a windfall gain at the expense of the people of NSW”.
“After the way Healthscope has managed this partnership, it should not expect to walk away from the Northern Beaches Hospital with a profit,” he said.
La Spina said that would not be the case.
“While there will be some puts and takes, I can assure you Healthscope will not seek a windfall gain,” he said.
Speaking in March, Premier Chris Minns did not rule out buying back the hospital from Healthscope.
Premier Chris Minns, pictured with Elouise and Danny Massa, announcing a ban on public-private partnerships for acute hospitals in March. Credit: Steven Siewert
In a fact sheet provided to staff on Thursday morning, Healthscope said it had already offered to return the hospital to the NSW government in 2023 “because we believed the PPP model did not have sufficient support to be successful in the long term”.
In response to the revelation, Mookhey said the government would do a deal at a time that was in the public’s interest.
“It is clear that the private equity owners of this business have been trying to establish means by which they can profit from this transaction,” he said.
Mookhey said Healthscope was a “distressed business” and referred to moves by its Canadian-American owners, Brookfield Asset Management, to sell the business in an attempt to recoup $1.6 billion in debt.
“The taxpayers of NSW would expect, firstly, that mismanagement of the hospital is not rewarded, and secondly, that public money isn’t being handed over to private equity as part of a ‘going out of business’ sale,” he said.
Mookhey would not commit to a time-frame for the handover, or guarantee that the hospital would end up in public hands. La Spina said negotiations could take “up to a year”.
“My focus is on making sure that we do the transition in a smart way that continues to provide continuity of excellent patient care,” La Spina said.
La Spina denied the Northern Beaches decision had anything to do with Healthscope’s broader financial position.
“Where we have potential bidders looking at the assets, what we’re really saying is this particular part of the hospital, if the government wants to … [take] it back, is not up for sale,” he said.
Healthscope is seven years into a 20-year contract to run the hospital’s public arm. It operates 37 other hospitals across Australia.
La Spina defended the hospital’s performance under Healthscope.
“NBH is a first-class facility, served by qualified, skilled nurses, doctors and staff, whose clinical performance has been acknowledged and commended by independent authorities,” he said.
Healthscope CEO Tino La Spina at NSW budget estimates in February. Credit: Edwina Pickles
“They have Healthscope’s absolute support for the work they continue to do, in often intense circumstances.”
La Spina said he called Danny and Elouise Massa, whose son, Joe, died at Northern Beaches Hospital in September after a series of systemic and individual failures, on Thursday to give them a “heads-up” on the news.
Elouise Massa said the announcement was “a win for the northern beaches community”.
“Danny and I cannot believe how quickly change has occurred,” Massa said. “This is the best possible outcome for the local community and sends a strong message from healthcare providers that there is no place to mix profit with public healthcare in NSW and across Australia.”
The NSW Auditor-General’s independent review of the hospital’s performance under Healthscope is due to be released next week.
Wakehurst MP Michael Regan and Pittwater MP Jacqui Scruby both encouraged the community to make submissions to the inquiry before they close on May 20.
“There is still a huge opportunity to have your voices heard,” Regan said. “This progress wouldn’t be happening without the strength and determination of local families and community advocates who stood up and said: enough is enough.”
NSW Health Minister Ryan Park said the hospital would operate “without interruption” as discussions progressed.
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