Fallout from Healthscope’s plunge into receivership continues

Major private hospitals in Adelaide operated by Healthscope – which has plunged into receivership – will not be sold in any rescue package, authorities have vowed. Here’s why.

• Job fears as $1.4bn Healthscope in receivership

Major Adelaide private hospitals appear safe from being sold in the fallout of the $1.4bn Healthscope descent into receivership but are rushing to work out new arrangements to keep operating.

Ashford, Flinders Private and Memorial hospitals are operated by Healthscope but are owned by the Adelaide Community Healthcare Alliance (ACHA), a South Australian not-for-profit registered charity.

In Flinders Private’s case there is a 50-year ground lease with SA Health.

An ACHA statement to The Advertiser stresses that Healthscope has no legal right to sell the these hospitals and ACHA has no requirement to sell its hospitals.

It says all three are “performing very well” and all employees at the three hospitals are employed by ACHA.

It also notes ACHA will not be seeking any government support, as “it has no need to.”

ACHA has taken action in the Supreme Court urgently seeking vital information on the impact of Healthscope’s current status on a longstanding contractual agreement at ACHA’s hospitals. Under this agreement, Healthscope is responsible for providing the day-to-day operational management of the three hospital sites.

This legal action is still unfolding.

The Flinders Private Hospital has a 50-year ground lease with SA Health. Picture: Brenton Edwards

Ashford Hospital is one of three hospitals in Adelaide that are part of Healthscope.

Memorial Hospital in North Adelaide is also part of Healthscope.

“ACHA reassures patients, staff, medical specialists, and all South Australians that operations at its hospitals continue as normal with no impact on services and jobs,” it says.

Premier Peter Malinauskas told The Advertiser the government is closely monitoring the situation.

“Our advice is services will continue to operate as usual, as Healthscope is not the owner of the ACHA hospitals,” he said.

Healthscope’s parent entities have entered receivership, with its lenders appointing McGrathNicol Restructuring to sell the business.

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

Healthscope says its 37 hospitals all remain open and operating “on a business-as-usual basis with no impact on staff, doctors or patient care.”

Australian Medial Association state president Associate Professor Peter Subramaniam said patients should feel confident their surgeries and appointments will go ahead as planned at the affected hospitals but warned problems in private health can jeopardise the public system.

“The dedicated staff and doctors at these hospitals continue their work without interruption, and AMA SA acknowledges their professionalism and focus at this time,” he said.

“The situation highlights the broader structural issues facing Australia’s health system. More than two-thirds of elective surgeries in Australia are performed in the private system.

“If that system becomes unstable, patients waiting for surgery in the public system will face even longer delays.

“This isn’t just about rescuing one company. We need a long-term plan for private healthcare – one that ensures patients come first, that rebates match the real costs of care, and that South Australia’s private hospitals are not left behind.”

Healthscope’s receivers are looking to sells the business, and a $100m has been provided by Commonwealth Bank to support operations during the sale process.

Originally published as Fallout from Healthscope’s plunge into receivership continues