Late on Tuesday, after Premier Chris Minns went on morning radio to announce the end of the private ownership model at Northern Beaches Hospital, an email landed in the inboxes of more than 19,000 Healthscope staff across Australia.

It was from chief executive Tino La Spina, thanking them for their work amid “external noise and impending change”. He defended the hospital’s performance under Healthscope, and took a parting swipe at the Minns government.

“For any partnership to work it must have goodwill on both sides,” he wrote. “Sadly, the political will does not exist and it is in this context we are returning the hospital.”

The deal may be done in principle, but there are still many questions about how the hospital will operate under public control. Here, we break down just a few.

The news

Healthscope, which went into receivership in May with $1.6 billion in debt, will receive $190 million from NSW taxpayers to exit its contract to operate the hospital until 2038.

The 494-bed hospital will be integrated into the state’s public health system under the direct control of the Northern Sydney Local Health District, which oversees other major public healthcare services, including the Royal North Shore Hospital.

All doctors, nurses, and support staff will be offered jobs by NSW Health to continue working at the hospital.

Why did the NSW government take control?

Locals have campaigned against the private ownership model since it was first unveiled in 2013. Several high-profile incidents in the hospital’s first year, including one in which a cancer patient had the wrong side of his colon removed, did little to inspire the community’s confidence.

Labor campaigned against the public-private partnership in opposition but remained committed to the contract in government, even when Healthscope’s finances worsened and the company offered to hand back the hospital 14 years earlier than planned.

The Massa family’s campaign following the death of their two-year-old son Joe, and Healthscope’s worsening financial outlook, ultimately forced the Minns government to act.

What it means for patients

All 494 beds at the hospital will be fully integrated into the public system, something multiple inquiries and audits found to have been complicated by the public-private partnership. The hospital will also benefit from the nurse-to-patient ratios rolling out at all public hospitals in the state.

What it means for more than 130,000 northern beaches residents with private health insurance is less clear. About 180 beds were reserved for private patients under the previous model, and the hospital performs about 20,000 private elective surgeries every year.

Some doctors argue the public-private model allows the hospital to provide public patients with treatments that wouldn’t be possible otherwise. The hospital’s angiography and around-the-clock heart attack services, for example, could become unviable without the high volume of elective angiography funded privately, the hospital’s director of cardiac services told a parliamentary inquiry last week.

By the numbers

• Taxpayers will pay $190 million to take over the hospital. Minns said on Tuesday the original contract included a potential exit payment to Healthscope “north of $800 million”.
• The hospital has capacity for 494 beds. About 180 beds are currently reserved for private patients.
• There were 132,491 people with private health insurance on the northern beaches in 2022, according to the Australian Bureau of Statistics. Industry group Private Health Australia estimates as many as 79 per cent of the northern beaches population is covered by health insurance.

What they said

What’s next

The formal transition of the hospital will begin next month, La Spina said in his email to staff. The government expects to take full control by mid-2026. Binding legal and commercial terms still need to be finalised, and the government said it still retains the option to terminate the contract through legislation introduced to parliament this year.

Minns did not say how the hospital would actually operate under the new arrangement, but the government will consult doctors and other staff to determine future clinical services and an operating model, “including the role of private services in the hospital footprint”.

Tuesday’s announcement blindsided many doctors treating both public and private patients at the hospital. At a meeting of more than 60 medical staff on Thursday night, many said they were already making plans to leave, while others resolved to publicly campaign against the decision, three doctors unauthorised to speak publicly said.

“It’s fair to say that there was a lot of anger and disappointment in the meeting … we think this is a very poor decision that has been driven by politics and ideology,” one doctor said.

The unions representing nurses, midwives, and salaried doctors all welcomed the hospital’s public takeover, and said they would work with the government to address long-standing understaffing, overwork and exhaustion issues.

More reading

• Healthscope’s ills point to unhealthy connection between public patients and private profit
• Starting school should be a happy milestone. For this family, it’s a reminder of tragedy
• They trusted this hospital to care for their baby. Instead, the unimaginable happened

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