Latest news with #LaSpina
The Age
4 days ago
- Business
- The Age
‘Over my dead body': Fight to keep Healthscope's hospitals alive just getting started
Canadian investment firm Brookfield is a global financial giant with a trillion dollars under management, yet it could not save Healthscope and decided to walk away with a $2 billion loss. In simple terms, it paid too much using too much debt, and sold off the land for many of these hospitals to landlords under deals that allowed them to charge too much for rent. As an interesting contrast, unlike Healthscope, Ramsay owns most of its hospitals and the land they sit on. It means Healthscope lenders who are owed $1.6 billion, including Australia's Big Four banks, will also wear massive losses once the proceeds of the sale are divvied up between them. The good news is that this will ensure the business is transferred with zero debt in any sale. Landlords will also be wearing a lot of the pain to help many of these hospitals become financially viable for a new private owner. The alternative is closure if state governments don't step into the breach. Healthscope's hospitals would be empty if doctors lost faith and moved their elective surgeries to private hospitals nearby. This explains why Healthscope reached its own abyss well ahead of its rivals, and faces a much larger challenge just to get back to the abysmal state the sector as a whole faces. Separate to this is the immediate challenge that La Spina faces in running the day-to-day operations at the hospitals, and it explains why his fireside chat came with so much heat: Healthscope desperately needs to keep faith with the many specialist doctors and surgeons who actually generate its revenue. Around 70 per cent of elective surgeries in Australia take place in a private hospital. La Spina knows that the last thing they want is Healthscope in the hands of a private health insurer, who could dictate how much a hip replacement should cost. Loading Healthscope's hospitals would be empty if these doctors lost faith and moved their elective surgeries to other private hospitals. If this business flows out the door, it doesn't matter what happens to its rent bill and debt levels. La Spina may not like it, but the truth is BUPA is almost certainly among the parties interested in buying either all of Healthscope's operations or parts thereof, and there is nothing he can do about it. His immediate priority is to keep the day-to-day business running while the lender-appointed receivers from McGrathNicol kick off the sales process next month, with as many as 30 parties interested in Healthscope as of this week. The receivers have one job, maximise the sale price and return as much money as possible to the lenders. Loading To this end, they are expected to focus on a single transaction involving all of Healthscope's assets - if possible. The price will be determined by the receiver's delicate dance with landlords over how much financial pain they are willing to endure to give potential suitors confidence they are buying a viable business. If the rent concessions are too low, the hospitals won't find a buyer and their staff could be out of a job. The success of any sale is also heavily dependent on whether all potential white knights are allowed to come to Healthscope's rescue.
Sydney Morning Herald
4 days ago
- Business
- Sydney Morning Herald
‘Over my dead body': Fight to keep Healthscope's hospitals alive just getting started
Canadian investment firm Brookfield is a global financial giant with a trillion dollars under management, yet it could not save Healthscope and decided to walk away with a $2 billion loss. In simple terms, it paid too much using too much debt, and sold off the land for many of these hospitals to landlords under deals that allowed them to charge too much for rent. As an interesting contrast, unlike Healthscope, Ramsay owns most of its hospitals and the land they sit on. It means Healthscope lenders who are owed $1.6 billion, including Australia's Big Four banks, will also wear massive losses once the proceeds of the sale are divvied up between them. The good news is that this will ensure the business is transferred with zero debt in any sale. Landlords will also be wearing a lot of the pain to help many of these hospitals become financially viable for a new private owner. The alternative is closure if state governments don't step into the breach. Healthscope's hospitals would be empty if doctors lost faith and moved their elective surgeries to private hospitals nearby. This explains why Healthscope reached its own abyss well ahead of its rivals, and faces a much larger challenge just to get back to the abysmal state the sector as a whole faces. Separate to this is the immediate challenge that La Spina faces in running the day-to-day operations at the hospitals, and it explains why his fireside chat came with so much heat: Healthscope desperately needs to keep faith with the many specialist doctors and surgeons who actually generate its revenue. Around 70 per cent of elective surgeries in Australia take place in a private hospital. La Spina knows that the last thing they want is Healthscope in the hands of a private health insurer, who could dictate how much a hip replacement should cost. Loading Healthscope's hospitals would be empty if these doctors lost faith and moved their elective surgeries to other private hospitals. If this business flows out the door, it doesn't matter what happens to its rent bill and debt levels. La Spina may not like it, but the truth is BUPA is almost certainly among the parties interested in buying either all of Healthscope's operations or parts thereof, and there is nothing he can do about it. His immediate priority is to keep the day-to-day business running while the lender-appointed receivers from McGrathNicol kick off the sales process next month, with as many as 30 parties interested in Healthscope as of this week. The receivers have one job, maximise the sale price and return as much money as possible to the lenders. Loading To this end, they are expected to focus on a single transaction involving all of Healthscope's assets - if possible. The price will be determined by the receiver's delicate dance with landlords over how much financial pain they are willing to endure to give potential suitors confidence they are buying a viable business. If the rent concessions are too low, the hospitals won't find a buyer and their staff could be out of a job. The success of any sale is also heavily dependent on whether all potential white knights are allowed to come to Healthscope's rescue.
The Advertiser
26-05-2025
- Business
- The Advertiser
Ailing hospital operator vows wards will stay open
Patients and staff at dozens of hospitals across Australia have been assured it's business as usual as their embattled private health operator enters receivership. Healthscope chief executive Tino La Spina vowed to the company's 19,000 staff that all its hospitals would remain open and there would be no redundancies. The provider, which operates 37 hospitals in every state and territory, was handed a lifeline on Monday when the Commonwealth Bank provided a $100 million loan to support the embattled company. Receivers were appointed, led by McGrathNicol partner Keith Crawford who said the focus was to engage "constructively with all key stakeholders to ensure uninterrupted operation of Healthscope hospitals". The company is Australia's second-largest private hospital operator and has been owned by North American private equity firm Brookfield since 2019. Healthscope said while the parent entity had entered receivership, the operational business - which runs the hospitals - had not. Federal Health Minister Mark Butler said the move was no surprise and made clear taxpayers would not be footing the bill for the healthcare provider. "There's already very significant taxpayer support that goes into the operation of the private hospital system," he said. "I want to be clear I expect to see an orderly sale process eventuate from this decision to any owner with no impact on patients and hardworking staff." Patients with scheduled births or surgeries at the company's hospitals should feel confident their procedures would go ahead as planned, Mr Butler said. He said the company had enough funds for "several months of operations" while the sale process begins. "Healthscope will be a very different beast going forward in terms of the ownership and ultimately perhaps operations," Mr Butler said. Mr La Spina said he was confident the business would be sold as a "whole", rather than offloading individual hospitals. "We have 10 non-binding indicative offers - some are for the whole and others potentially could include the whole under certain circumstances. That is the focus," he said. "The receivers and management share the same goal of maintaining our market-leading standards of patient care and protecting the business, the hospitals and our amazing people." Mr La Spina flagged the company's excessive secured debt and high rental costs of hospital sites as factors in receivers being called in. The Australian Nursing and Midwifery Federation said it had been working with members and stakeholders navigating the financial difficulties and uncertainty Healthscope operates the Northern Beaches Hospital in Sydney, Hobart Private Hospital, Darwin Private Hospital and Knox Private Hospital in Melbourne. In May 2024, then-chief executive Greg Horan said even though the sector was "facing considerable headwinds", providing the "best care" remained a top priority. The company 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. Healthscope moved to shut down maternity services at Darwin Private Hospital and Hobart Private Hospital earlier in 2025. Patients and staff at dozens of hospitals across Australia have been assured it's business as usual as their embattled private health operator enters receivership. Healthscope chief executive Tino La Spina vowed to the company's 19,000 staff that all its hospitals would remain open and there would be no redundancies. The provider, which operates 37 hospitals in every state and territory, was handed a lifeline on Monday when the Commonwealth Bank provided a $100 million loan to support the embattled company. Receivers were appointed, led by McGrathNicol partner Keith Crawford who said the focus was to engage "constructively with all key stakeholders to ensure uninterrupted operation of Healthscope hospitals". The company is Australia's second-largest private hospital operator and has been owned by North American private equity firm Brookfield since 2019. Healthscope said while the parent entity had entered receivership, the operational business - which runs the hospitals - had not. Federal Health Minister Mark Butler said the move was no surprise and made clear taxpayers would not be footing the bill for the healthcare provider. "There's already very significant taxpayer support that goes into the operation of the private hospital system," he said. "I want to be clear I expect to see an orderly sale process eventuate from this decision to any owner with no impact on patients and hardworking staff." Patients with scheduled births or surgeries at the company's hospitals should feel confident their procedures would go ahead as planned, Mr Butler said. He said the company had enough funds for "several months of operations" while the sale process begins. "Healthscope will be a very different beast going forward in terms of the ownership and ultimately perhaps operations," Mr Butler said. Mr La Spina said he was confident the business would be sold as a "whole", rather than offloading individual hospitals. "We have 10 non-binding indicative offers - some are for the whole and others potentially could include the whole under certain circumstances. That is the focus," he said. "The receivers and management share the same goal of maintaining our market-leading standards of patient care and protecting the business, the hospitals and our amazing people." Mr La Spina flagged the company's excessive secured debt and high rental costs of hospital sites as factors in receivers being called in. The Australian Nursing and Midwifery Federation said it had been working with members and stakeholders navigating the financial difficulties and uncertainty Healthscope operates the Northern Beaches Hospital in Sydney, Hobart Private Hospital, Darwin Private Hospital and Knox Private Hospital in Melbourne. In May 2024, then-chief executive Greg Horan said even though the sector was "facing considerable headwinds", providing the "best care" remained a top priority. The company 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. Healthscope moved to shut down maternity services at Darwin Private Hospital and Hobart Private Hospital earlier in 2025. Patients and staff at dozens of hospitals across Australia have been assured it's business as usual as their embattled private health operator enters receivership. Healthscope chief executive Tino La Spina vowed to the company's 19,000 staff that all its hospitals would remain open and there would be no redundancies. The provider, which operates 37 hospitals in every state and territory, was handed a lifeline on Monday when the Commonwealth Bank provided a $100 million loan to support the embattled company. Receivers were appointed, led by McGrathNicol partner Keith Crawford who said the focus was to engage "constructively with all key stakeholders to ensure uninterrupted operation of Healthscope hospitals". The company is Australia's second-largest private hospital operator and has been owned by North American private equity firm Brookfield since 2019. Healthscope said while the parent entity had entered receivership, the operational business - which runs the hospitals - had not. Federal Health Minister Mark Butler said the move was no surprise and made clear taxpayers would not be footing the bill for the healthcare provider. "There's already very significant taxpayer support that goes into the operation of the private hospital system," he said. "I want to be clear I expect to see an orderly sale process eventuate from this decision to any owner with no impact on patients and hardworking staff." Patients with scheduled births or surgeries at the company's hospitals should feel confident their procedures would go ahead as planned, Mr Butler said. He said the company had enough funds for "several months of operations" while the sale process begins. "Healthscope will be a very different beast going forward in terms of the ownership and ultimately perhaps operations," Mr Butler said. Mr La Spina said he was confident the business would be sold as a "whole", rather than offloading individual hospitals. "We have 10 non-binding indicative offers - some are for the whole and others potentially could include the whole under certain circumstances. That is the focus," he said. "The receivers and management share the same goal of maintaining our market-leading standards of patient care and protecting the business, the hospitals and our amazing people." Mr La Spina flagged the company's excessive secured debt and high rental costs of hospital sites as factors in receivers being called in. The Australian Nursing and Midwifery Federation said it had been working with members and stakeholders navigating the financial difficulties and uncertainty Healthscope operates the Northern Beaches Hospital in Sydney, Hobart Private Hospital, Darwin Private Hospital and Knox Private Hospital in Melbourne. In May 2024, then-chief executive Greg Horan said even though the sector was "facing considerable headwinds", providing the "best care" remained a top priority. The company 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. Healthscope moved to shut down maternity services at Darwin Private Hospital and Hobart Private Hospital earlier in 2025. Patients and staff at dozens of hospitals across Australia have been assured it's business as usual as their embattled private health operator enters receivership. Healthscope chief executive Tino La Spina vowed to the company's 19,000 staff that all its hospitals would remain open and there would be no redundancies. The provider, which operates 37 hospitals in every state and territory, was handed a lifeline on Monday when the Commonwealth Bank provided a $100 million loan to support the embattled company. Receivers were appointed, led by McGrathNicol partner Keith Crawford who said the focus was to engage "constructively with all key stakeholders to ensure uninterrupted operation of Healthscope hospitals". The company is Australia's second-largest private hospital operator and has been owned by North American private equity firm Brookfield since 2019. Healthscope said while the parent entity had entered receivership, the operational business - which runs the hospitals - had not. Federal Health Minister Mark Butler said the move was no surprise and made clear taxpayers would not be footing the bill for the healthcare provider. "There's already very significant taxpayer support that goes into the operation of the private hospital system," he said. "I want to be clear I expect to see an orderly sale process eventuate from this decision to any owner with no impact on patients and hardworking staff." Patients with scheduled births or surgeries at the company's hospitals should feel confident their procedures would go ahead as planned, Mr Butler said. He said the company had enough funds for "several months of operations" while the sale process begins. "Healthscope will be a very different beast going forward in terms of the ownership and ultimately perhaps operations," Mr Butler said. Mr La Spina said he was confident the business would be sold as a "whole", rather than offloading individual hospitals. "We have 10 non-binding indicative offers - some are for the whole and others potentially could include the whole under certain circumstances. That is the focus," he said. "The receivers and management share the same goal of maintaining our market-leading standards of patient care and protecting the business, the hospitals and our amazing people." Mr La Spina flagged the company's excessive secured debt and high rental costs of hospital sites as factors in receivers being called in. The Australian Nursing and Midwifery Federation said it had been working with members and stakeholders navigating the financial difficulties and uncertainty Healthscope operates the Northern Beaches Hospital in Sydney, Hobart Private Hospital, Darwin Private Hospital and Knox Private Hospital in Melbourne. In May 2024, then-chief executive Greg Horan said even though the sector was "facing considerable headwinds", providing the "best care" remained a top priority. The company 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. Healthscope moved to shut down maternity services at Darwin Private Hospital and Hobart Private Hospital earlier in 2025.
Perth Now
26-05-2025
- Business
- Perth Now
Aus health company with 19k staff collapses
Taxpayers won't bail out embattled private hospital operator Healthscope after it collapsed into receivership, owing about $1.4bn to creditors, federal Health Minister Mark Butler says. The company, which is Australia's second largest private health care provider and has 19,000 staff, was placed into receivership under McGrath Nicol on Monday, with chief executive Tino La Spina promising things would be 'business as usual' for patients and staff. The company operates 37 private hospitals across Australia and is responsible for about 70 per cent of all elective surgeries, plus about one in four births. Mr Butler said the government had been in contact with Healthscope since the announcement and said the 'interests of patients and hardworking staff' would be the highest priority during the transition. 'I want to be clear I expect to see an orderly sale process eventuate from this decision to any owner with no impact on patients and hardworking staff,' he said. Health Minister Mark Butler said he was confident all Healthscope-operated hospitals will remain in operation. NewsWire/ Martin Ollman Credit: News Corp Australia He stressed there would be no taxpayer bailout throughout the sales process, and said Healthscope had given its assurances that its hospitals would continue operating. The company has also confirmed patients with booked elective surgeries will go ahead. 'There's already very significant taxpayer support that goes into the operation of the private hospital system,' he said. 'Many of these hospitals have been operating in communities for decades … and are a very important part of their community, and I'm confident will remain so into the future.' While Healthscope will now seek a new buyer, Commonwealth Bank has said it would contribute $100m in new credit to the company, with Westpac also set to work with the group's 20 lenders to ensure continued operation. CBA and Westpac will help fund private health provider Healthscope NCA Newswire Credit: NCA NewsWire Speaking separately in Melbourne on Monday, Mr La Spina repeatedly said Healthscope had already received '10 non-binding indicative offers' and believed the business would be bought 'as a whole'. 'I want to be absolutely clear in any of our facilities, it is business as usual. There will be no hospital closures, no redundancies,' he told reporters. 'Our patients, doctors, people can expect to come to our facilities and provide or receive this same amazing care they do always.' Mr La Spina said while lenders and landlords of the hospital sites may be asked to 'take a hair cut,' staff, doctors and nurses will not be affected. He blamed the company's troubled on the business' secured debt and the 'too high' rental costs of the hospital sites. The 'industry structure' of private health insurers squirrelling 'billions of dollars over the last few years and not putting it back into the private sector' was also a factor. Healthscope is promising business as usual at it private hospitals after appointing administrators on Monday. NewsWire/ Nadir Kinani Credit: News Corp Australia McGrath Nicol said its intention was to transition all hospitals to new ownership, with no plans for hospital closures or redundancies. McGrath Nicol partner and appointed receiver, Keith Crawford said he wanted to 'make it clear the subsidiaries that own and operate Healthscope's network of hospitals are not affected by our appointment to the shareholding companies'. '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,' Mr Crawford said. More than 19,000 people work for the healthcare provider across the country, according to its website. The Australian Nursing and Midwifery Federation said it was in discussions with state and federal governments to avoid closures, and wanted a say in who would control the company.
