Healthscope in critical condition: Inside the collapse of Australia's second-biggest private hospital network
Healthscope
, the second-largest private hospital network of Australia, has entered receivership with corporate restructuring firm McGrathNicol appointed to oversee the sale of its assets, raising serious questions about the future of private healthcare for thousands of Australians.
But despite the financial collapse of its parent company, the group insists that patient care will continue without disruption and with no immediate impact on its 19,000 staff or patient care.
The company operates 37 hospitals across the country, employing around 19,000 staff and treating over 650,000 Australians annually. Though its parent entity, owned by North American private equity firm Brookfield, has collapsed under financial pressure, the operational side of the business remains intact.
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'We're still scrubbing in. Still showing up,' said one senior nurse in Melbourne. 'The uncertainty is real, but so is our duty to patients.'
Brookfield, which acquired Healthscope for $5.7 billion in 2019, has seen its investment deteriorate. After selling off the hospital properties to trusts and failing to meet rent obligations, lenders, led by CBA, stepped in and appointed McGrathNicol as receivers. KordaMentha will represent Brookfield's interests during the sale.
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'This is a receivership of the holding company, not the hospitals themselves,' said CEO Tino La Spina, who stressed that no hospitals will close and no staff will be laid off. 'All 37 of our hospitals continue to operate as normal,' he said. '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.'
Currently available funds
Healthscope has $110 million in cash on hand, and the Commonwealth Bank has provided an extra $100 million in funding to keep operations running smoothly while the business is sold. Ten indicative offers have already been received, some for the full business.
Federal Health Minister Mark Butler said he received direct assurances from the CEO that every booked surgery, including childbirths and joint replacements, would proceed as scheduled. 'I will hold the company and the receivers to that commitment,' Butler said.
Butler was clear that there would be no government bailout. 'This is an overseas private equity firm. They will not receive taxpayer support,' he said. 'Private hospitals receive nearly $8 billion a year in public subsidies. That comes with responsibility.'
Healthscope insists the focus remains unchanged, despite the corporate upheaval: care will continue, and patients can proceed with confidence.
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