Major private health group Healthscope has fallen into receivership and is seeking to sell all of its hospitals, but it says there will be no immediate impact on its patients and staff due to a $100 million lifeline.
Owned by Canadian private equity firm Brookfield, which purchased the company for $5.7 billion in 2019, Healthscope is Australia’s second-largest private hospital group, owning 37 hospitals across the country.
However, it is currently saddled with some $1.6 billion in debt.
Healthscope called in McGrathNicol as receivers today, but said there won’t be an impact on its staff and patients after creditor Commonwealth Bank provided a $100 million funding package.
“We want to make it clear that the subsidiaries that own and operate Healthscope’s network of hospitals are not affected by our appointment to the shareholding companies,” receiver Keith Crawford said in a statement.
“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.
“We will also work closely with Healthscope management to support any operational funding requirements via access to $100 million of new funding from Commonwealth Bank while we pursue an orderly transition of ownership of Healthscope’s hospitals.”
McGrathNicol said it plans to sell all hospitals without any closures or redundancies.
Beyond its financial woes, Healthscope has faced heavy scrutiny in recent months following the death of two-year-old Joe Massa at its private-public Northern Beaches Hospital.
The toddler’s death sparked a parliamentary inquiry and a police investigation and led the NSW government to ban public-private hospital partnerships.
In a statement, Joe’s mother Elouise Massa said the receivership provided a chance to ensure Northern Beaches Hospital becomes publicly owned.
“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,” she said.
“This moment presents the NSW government with a renewed opportunity to put Northern Beaches Hospital into public hands.”
