‘Beacon of hope’: Future of Brisbane private hospital remains unclear

One of Brisbane’s leading psychiatric hospitals has entered voluntary administration amid a funding crisis that threatens the viability of private hospitals nationwide.

Toowong Private Hospital has provided crucial in-patient and out-patient psychiatric care to Queenslanders for more than four decades, but it’s now at risk of closure.

The family-owned hospital last week appointed accounting firm EY as administrators after “unsuccessful attempts to explore a sale in recent months”.

Toowong Private Hospital has been operating on Milton Road for more than 40 years.Credit: Facebook

In a statement, administrator David Kennedy said EY was committed to ensuring the hospital continued to operate on a business-as-usual basis, “whilst a decision can be made regarding the future of the operations”.

“We understand the challenges the company has faced, particularly in the trading environment since the COVID-19 pandemic, and we are undertaking an urgent financial and operational assessment of the company’s options,” Kennedy said.

“Our focus will also include exploring potential options for a sale.”

However, finding a buyer will be challenging in the current climate, in which private hospitals and health insurers are at odds over who should shoulder the soaring cost of medical treatment, while the federal government is reluctant to intervene and has refused to bail out providers.

An industry source with knowledge of Toowong Private Hospital said the facility could no longer service its debts after years of being short-changed by health insurers while the cost of providing treatment skyrocketed.

The 58-bed hospital on Milton Road was founded by influential Brisbane builder and philanthropist Noel Austin Kratzmann, who chaired the facility until his death in 1989.

Still owned by NA Kratzmann & Sons, the hospital employs 154 staff and treats more than 3000 patients a year, providing dedicated trauma and alcohol recovery programs for both current and former military personnel, as well as out-patient support services.

A former patient has launched a petition on Change.org calling on the state government to ensure the hospital’s doors stay open.

The private hospital provides a unique model of holistic care involving psychiatrists, psychologists and social workers.Credit: Toowong Private Hospital

“Toowong Private Hospital has been a beacon of hope for countless individuals across Queensland facing mental health challenges,” the patient wrote. “My experience isn’t unique – it reflects the stories of many who have found life-saving support within those walls.

“It’s imperative that we seek government intervention to keep Toowong Private Hospital open for the future of mental health in our community.

“Toowong offers a range of programs unique to this hospital. The outreach community programs assist patients in their homes to improve their connection within the community, create a routine in their lives, and someone to help monitor how your health is progressing.

“Their veterans program is helping many of our serving former servicemen and women who have had to serve overseas.”

A room at Toowong Private Hospital.Credit: Toowong Private Hospital

The Queensland government has taken over private hospitals in the past, acquiring Gladstone Mater Hospital in 2020 under former premier Annastacia Palaszczuk.

However, Health Minister Tim Nicholls did not respond to questions about whether the Crisafulli government would step in to save Toowong Hospital.

A spokesman for the minister said Queensland Health was working with the hospital to “determine what impact the facility going into administration will have on public mental health services and ensure a smooth transition for patients across to other mental health facilities over the coming weeks if required”.

“Queensland Health remains in regular contact with this facility around patient numbers and the potential transfer of patients to other facilities,” the spokesman said.

Toowong is one of a small number of private mental health hospitals in inner Brisbane, including Aurora’s Nundah Private Hospital, Avive Private Hospital (Windsor), Ramsay Clinic New Farm, and Aurora’s Belmont Private Hospital.

Australian Private Hospitals Association chief Brett Heffernan said it was beyond belief that a respected facility like Toowong had been “forced to the wall”.

“For it to be placed in this situation, where its future is hanging in the balance, is completely unacceptable,” Heffernan said. “The reason we’re in this position across the board is that private health insurance is engaged in profiteering.”

Heffernan feared more private psychiatric facilities in Australia could face the same fate in the near future.

Toowong Hospital’s chief executive Christine Gee, who served as the interim national president of the association, could not be reached on Wednesday.

The association has repeatedly called for drastic action, chiefly an injection of federal funding to top up the shortfall from health insurers, as well as lifting the 10-year moratorium that prevents overseas-trained psychiatrists from working in private hospitals.

Queensland Mental Health Commissioner Ivan Frkovic said there were “significant systemic issues” facing the sustainability of the private hospital sector, particularly private mental health services.

“Private hospitals reduce pressure on public hospitals, and I support any solution that delivers mental health beds for people who need in-patient care when and where it’s needed, and choice in where people access treatment, support and care,” he said.

The Kraztmann family

Noel Kratzmann, an influential builder and businessman who founded Toowong Private Hospital, built Torbreck at Highgate Hill and the Chevron Hotel at Surfers Paradise. Kratzmann and his wife were also patrons of the Twelfth Night Theatre and helped finance the production company’s Bowen Hills theatre.

After his death, the family endowed the Kratzmann Chair in Psychiatry at the University of Queensland.

Queensland has 1793 state-funded mental health beds, plus 315 state-funded beds for alcohol and drug treatment.

A first meeting of the hospital’s creditors is scheduled for May 26.

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