A report by the NSW Auditor-General questions whether a public- private partnership “is the appropriate model to deliver the best quality integrated health care”.

In the report, released in April, the NSW Auditor-General found that the Northern Beaches Hospital – operated by Healthscope – failed

to reach the standards and key objectives outlined in its contractual project deed and, ominously, that the partnership was at risk of failure.

Other key findings were:

• The hospital “recorded concerning results for some hospital-acquired complications and has not taken sufficient actions to address some identified clinical safety risks”
• The project deed, which governs the partnership, did not support the hospital’s integration into the local health district and broader health network
• Healthscope has no obligation or commitment to implement NSW Health initiatives – such as the Safe Staffing Levels initiative.

The report said the hospital “has recorded elevated rates of falls, third- and fourth-degree perineal lacerations, and birth trauma during the review period” and despite efforts to resolve these issues “repeated patterns of poor results are a cause for concern”.

It continued: “Healthscope is unable to determine the extent to which factors such as insufficient staffing or equipment result in minor harm or near-miss incidents at the Northern Beaches Hospital.”

The report noted Healthscope’s request in November 2023, and again in December 2023, that the return of the public portion of the Northern Beaches Hospital be brought forward by 14 years.

In its requests, Healthscope noted the risk to the viability of the Northern Beaches Hospital, citing insufficient funding, a lack of integration into the wider health network, and strained stakeholder relationships.

In January 2024, the Ministry of Health formally declined Healthscope’s requests, noting that Healthscope has no legal or contractual entitlement to withdraw from or vary the project in the manner proposed.

The Ministry of Health reaffirmed that Healthscope must continue to provide services under the terms of the project deed.

“ Recent reported financial challenges for Healthscope confirm this is an ongoing risk for NSW Health to manage,” the Auditor-General said.

TENSION BETWEEN PROFITS AND CARE

In recent months, Healthscope, which was bought in 2019 by private equity firm Brookfield, has revealed that it is $1.6 billion in debt.

The report pointed out that the Northern Beaches Hospital public- private partnership is expected to provide services at a lower cost than if the state operated the hospital.

“However, the public-private partnership structure creates tension between commercial imperatives and clinical outcomes,” it said.

It points out that there have been several funding increases provided to Healthscope by NSW Health.

“In June 2024, the Northern Sydney Local  Health  District calculated that over $73 million in additional funding had been provided to Healthscope to operate the Northern Beaches Hospital since the hospital opened in October 2018.”

The Northern Beaches Hospital is currently the only public-private partnership for comprehensive public hospital services operating in NSW. It serves 270,000 people on Sydney’s northern beaches.

The Auditor- General’s report recommended that “NSW Health should consider issues raised for this public-private partnership for any future arrangement”.

The NSW government has recently enacted laws that will prevent future public-private partnerships.

Healthscope has since renewed its offer for the state government to take over the public component of the Northern Beaches Hospital.

 More folly and failure from the ideologues of privatisation

 From the moment the privatisation of public health services on the Northern Beaches was mooted by the Liberal-National government led by Mike Baird the NSWNMA raised concerns that the model would lead to profits being put before care.

Before the 2015 state election the then Liberal health minister Jillian Skinner said the hospital would cost the taxpayer $1 billion. Two months after the election the contract details were revealed showing

that the private consortium, which included Healthscope, Leighton Holdings and Thiess would be paid more than $2.14 billion over the life of the contract until 2038.

Previous experiments in privatising public hospital services in Australia, including at Port Macquarie in NSW, read like a catalogue of folly and failure.

The then Liberal premier Mike Baird hinted at the ideological nature of the decision in the face of opposition from health leaders and experts, including the NSWNMA.

“I will support partnering with the private sector if we can deliver better facilities, improved services and great outcomes for the community. That’s what I believe in,” he said.

He wasn’t the only one who believed in the superiority of the private sector in health.

At the same time, the federal Liberal government led by Tony Abbott, with Peter Dutton as health minister, was conducting a full-blooded attack

on Medicare and was drastically slashing funds to public hospitals.

NSWNMA OPPOSES PRIVATISATION

Leading up to the 2015 NSW state election the NSWNMA ran a very strong campaign against this “Americanisation” of public health, including the privatisation of Northern Beaches Hospital.

At the time this led to substantial criticism from conservative politicians and media.

In September 2016 health minister Jillian Skinner doubled down on the privatisation mania and announced she intended to privatise five more regional hospitals – at Maitland, Wyong, Goulburn, Bowral and Shellharbour.

Strong campaigning by NSWNMA members and community engagement stopped these privatisations in their tracks.

NSWNMA General Secretary Shaye Candish says upholding the integrity of public health is part of the union’s DNA.

“The NSWNMA not only sees itself as a defender of the nursing and midwifery professions, but also as a defender of the public health system,” she said.

“We were right to stand up for public health through the years and we will continue to do so into the future. If nurses and midwives don’t stand up for public health and safe patient care, who will?”