The viability of private healthcare is under the microscope following the collapse of a major hospital operator, with one union casting doubt on private equity management in the sector.
Healthscope, which operates 37 hospitals across every state and territory, has vowed it will be business as usual for patients and staff after entering receivership.
Unions called on governments to reassess the sustainability of the health system, including how public healthcare is funded and delivered within the private sector.
“We don’t want to see a sector governed by private equity firms like we have seen with Brookfields coming in and essentially leaving Healthscope in shatters,” Australian Nursing and Midwifery Federation’s Victoria branch acting secretary Maddy Harradence told AAP.
“We know the private sector plays a really important piece in the broader healthcare system but we need them to be functioning, regulated and we need them to ensure a fair share of profits go back into the private hospital sector.”
Healthscope on Monday was handed a $100 million funding lifeline from the Commonwealth Bank, while Westpac agreed to continue to provide assistance to help receivers sell the business.
The provider, owned by North American private equity firm Brookfield, said while the parent entity had entered receivership, the operational business – which runs the hospitals – had not.
Anthony Scott, a professor of health economics at Monash University, says it is difficult to remain profitable in the private health sector due to workforce shortages, the cost of living and rising supply costs.
“It’s one of those things where it’s been very hard to maintain its profits over time,” he told AAP.
Prof Scott said it would be important to assess how private hospitals are funded moving forward, along with managing contracts with private health insurers.
The federal government confirmed on Monday that taxpayers would not be footing the bill for the healthcare provider.
Health Minister Mark Butler said the provider would be a “very different beast going forward in terms of the ownership”.
Victorian Health Minister Mary-Anne Thomas said the state needed a strong private health system to complement the public system.
“I am confident that we will be able to meet the needs of all Victorians and that there is simply, at this point, no need to be concerned,” she told reporters at state parliament on Tuesday.
In 2022 the Victorian government took over two Healthscope facilities, Frankston Private and Bellbird Private Hospital, to assist with the increased pandemic demand for healthcare and elective surgery services.
Ms Thomas said the state government had been watching the ailing company for some time.
Healthscope operates the Northern Beaches Hospital in Sydney, Hobart Private Hospital, Darwin Private Hospital and Knox Private Hospital in Melbourne.
Source: AAP
