'No amount of money' could have saved Healthscope during 2024 private health insurance attack, Rachel David declares
There was 'no amount of money' that could have saved Healthscope as it was waging war against private health insurers in 2024, a leader in the medical industry has declared.
Healthscope was forced into receivership on Monday after the debt-laden hospital operator was handed from its Canadian owners Brookfield to its lenders earlier this month.
Commonwealth Bank of Australia has issued the company a $100m lifeline to ensure all of Healthscope's hospitals will remain open and operate as usual.
The collapse follows Healthscope launching an aggressive advertising campaign in 2024 to allege private health insurers were not paying their fair share to fund private hospitals.
Private Healthcare Australia's CEO Rachel David on Tuesday hit back at Healthscope when questioned about the operator's campaign on Sky News' Business Now.
'There is no amount of money that health funds or the government could have thrown at Healthscope at that point which would have made up for the terrible business decisions made by Brookfield,' Ms David said on Tuesday.
She singled out Healthscope's $5.7b sale, which was regarded as overvalued, in 2019 to Brookfield and the decision to sell 22 hospitals for $2.5b to foreign investors before leasing them back to the operator for high rents.
'In a situation like that, there is no amount of money that health funds could have put their hands on that would have resulted in a different outcome,' Ms David said.
'We have to be mindful that … consumers have got to be able to afford their premiums.
'The advertising campaign was a misstep, but now that we're in a situation where new owners can take over ... myself and the private health insurance industry is incredibly optimistic that the private hospital sector will come through this and be able to deliver much more modern and attractive models of care for our patients.'
Healthscope faced troubles during the pandemic when patients halted their elective surgeries, leading to major downturns for private hospitals.
The uptick in at-home treatment, which was bolstered by private health insurers, also came as a sting to Healthscope as lengthy hospital visits became less necessary.
The company has also been marred with controversies, including the death of a two-year-old boy last September, a cancer patient having the wrong side of his colon removed in 2019 and the death of a 17-year-old boy suffering from anaphylaxis in 2021.
Healthscope's CEO Tino La Spina told reporters on Monday he is confident there will be a buyer to take over the business.
'I think we're confident that there is interest in taking the Healthscope business as a whole. We have 10 non-binding indicative offers,' Mr La Spina said.
'Some are for the whole (business) and others potentially could include the whole (business) under certain circumstances. That is the focus.'
Health Minister Mark Butler said Labor will not bail out the embattled healthcare company amid its financial troubles.
'We remain steadfast in our view that an orderly sales process that maintains the integrity of the entire hospital group will provide the best outcome for patients, staff, landlords and lenders,' Mr Butler said.
However, he did stress the hospitals operated by Healthscope 'remain a critical part of our healthcare system'.
'The government does not want any of these important assets to be put in jeopardy to satisfy international investors,' Mr Butler said.
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