Australia's second-largest private hospital group Healthscope goes into receivership amid debt concerns

7NEWS

26-05-2025

Healthscope, the private operator behind the troubled Northern Beaches Hospital, has gone into receivership after its lenders withdrew support for the current owner.
The major private health group confirmed the news on Monday, saying its lenders have appointed McGrathNicol Restructuring to oversee the sale of the company's assets as they seek to recover their loans.
Owned by Canadian asset management giant Brookfield, Healthscope is Australia's second-largest private hospital group, now burdened by $1.6 billion in debt.
The receivership applies only to Healthscope's non-operating parent entities, with hospital operations continuing unaffected.
Healthscope's management team, led by CEO Tino La Spina, remains in place to oversee daily operations.
Spina assured the move will not affect hospital operations or patients, citing the current cash balance and additional funding.
'All 37 of our hospitals continue to operate as normal and today's appointment of receivers, including the additional funding, ensures a stable path to a sale, with no impacts on any hospitals, staff or patients,' he said.
'The additional funding, while we do not anticipate it being required, provides additional support.'
Healthscope said it currently holds a cash balance of $110 million and has 'substantial additional asset backing across the group'.
In addition, the Commonwealth Bank will provide $100 million to support the business, while Westpac has agreed to continue assisting the receivers in the sale process.
'There is no interruption to the outstanding care we provide. Our incredible teams are all working as normal, providing the high standard of care they always have,' Spina added.
McGrathNicol partner Keith Crawford echoed those assurances.
'Our immediate focus is to engage constructively with all key stakeholders to ensure uninterrupted operation of Healthscope hospitals and continuity of best practice standards of patient care,' Crawford said.
He said the plan was to transition all hospitals to new ownership, with no plans for closures or redundancies of the provider's 18,000 employees.
KordaMentha has been appointed as administrator to the same non-operating entities, in a move the company describes as standard practice.
The Australian Medical Association (AMA) says it is ready to work with receivers to ensure Healthscope hospitals continue operating smoothly.
AMA President Dr Danielle McMullen said the federal government is expected to play a key role in supporting the transition and maintaining the hospital network.
Healthscope owns Northern Beaches Hospital in Sydney, Hobart Private Hospital, Darwin Private Hospital, and Knox Private Hospital in Melbourne.
It came under scrutiny following the death of two-year-old Joe Massa at the Northern Beaches Hospital in September 2024.
The toddler died after being wrongly triaged and waiting two hours for a hospital bed.
He was later transferred to Sydney Children's Hospital in Randwick following a cardiac arrest but succumbed to brain damage.
Joe's parents, Elouise and Danny, have been vocal advocates, calling for Healthscope to step aside and urging the government to address the crisis.
Elouise said the receivership provides the NSW Government with the opportunity to bring Northern Beaches Hospital back under public control.
'Healthscope's move into receivership marks the end of a disastrous attempt by Canadian private equity firm Brookfield to profit from the care of sick and injured Australians,' Elouise said in a statement.
'We have witnessed first-hand the tragedy that unfolded when Healthscope and Brookfield prioritised profit over patient care — resulting in the avoidable death of our beloved Joe after we took him to Northern Beaches Hospital, where he should have recovered, but did not.'
'This moment presents the NSW Government with a renewed opportunity to return Northern Beaches Hospital to public hands.'