Australia’s second-largest private hospital group, Healthscope, has fallen into receivership due to financial struggles.
Receivership is where a creditor (such as a bank) takes control of a company’s assets and arranges for them to be sold to repay debts.
Healthscope has said its 38 hospitals will keep operating as normal, vowing no closures or redundancies.
Around 650,000 patients are treated in a Healthscope-run hospital every year.
Hospitals
Australia has 636 private and 699 public hospitals, according to federal health department figures.
Public hospitals are funded by state and territory governments.
Private hospital structures are different and are usually funded by private health insurers and patients.
Health department data shows $85.6 billion was spent on public facilities, while private hospitals operated at a cost of $21.5 billion in the year 2022/23.
Healthscope
Healthscope is a private company that runs 38 hospitals in Australia, staffed by about 19,000 workers.
It has been owned by American investment firm Brookfield Asset Management since 2019.
Healthscope is contracted to run Sydney’s Northern Beaches Hospital by the NSW Government. The hospital faced an audit this year following the 2024 death of a two-year-old.
The NSW Auditor-General’s report urged Healthscope to review safety concerns.
Receivership
Earlier this month, Healthscope was revealed to have stopped paying rents and interest payments on its debts.
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Now, Healthscope’s parent entities have announced they are entering receivership. This does not include the management side of the business, which runs the hospitals.
Independent company restructuring firm McGrathNicol will take over to coordinate its sale.
What that means
Healthscope will now go through a sale process for the overall business.
It has insisted the operation of the 38 private hospitals around Australia won’t be affected, including pre-booked surgeries and appointments.
CEO Tino La Spina said: “There’ll be no hospital closures, there’ll be no redundancies.”
Commonwealth Bank, one of the Healthscope’s lenders, has provided $100 million to keep the hospitals running.
Reactions
Health Minister Mark Butler said the news would be “highly distressing to the patients, staff, and local communities that depend on Healthscope’s services.”
Butler said he was reassured by Healthscope’s confirmation that staffing and patient care won’t be impacted.
He ruled out the government bailing out the company.
Liberal Senator Anne Ruston, who was the Coalition’s health spokesperson in the last parliamentary term, urged Butler to “ensure the viability of Australia’s private hospitals”.
The Australian Nursing and Midwifery Federation Federal Secretary Annie Butler said despite Healthscope’s reassurances, it has presented a “very difficult and worrying” situation.
Butler added that all private health providers should be reviewed in future, adding “we can’t allow profits to be put before patient care”.
Head of the Australian Medical Association Dr Danielle McMullen said the group was “ready to work with the receivers as part of ensuring the uninterrupted operation of Healthscope hospitals.”
