The federal Minister for Health Mark Butler has emphasised that an orderly sale of Healthscope is essential to protect the interests of patients and hard-working staff.
There will be no bailout of private equity-owned Healthscope, but the federal government will “be looking over the shoulder” of all the actors in the administration and sale of the company “to make sure the interests of staff and patients going forward are protected”, Mark Butler said.
The Minister said private hospitals had an important part to play in the health system and received “very significant taxpayer support amounting to about $8 billion through the private health insurance rebate”.
“All of these parts of our system are interconnected, and there’s a very strong national interest in ensuring that every part of it, including the private hospitals component of the system is functioning well,” he said.
Butler said that the government was aware that a disorderly sales process would have an impact on public hospitals.
“(I am) determined to make sure that if there is a sale of Healthscope hospitals, which is now clear there will be, that it’s undertaken in an orderly, stable way that protects the operations of those hospitals, and through that the interests of patients and the very hard-working 19,000 staff members.”
He pointed out that these hospitals had been part of the Australian health system for a long time, predating Healthscope.
“Many of these hospitals have been operating in communities for decades. They’ve only been owned by Healthscope in its current ownership structure through Brookfield, the Canadian private equity firm, for several years since 2018 or so,” he said.
Healthscope’s woes highlighted the risks to the viability of hospitals in the private sector, he said.
He said private health insurers needed to lift the amount they “actually paid out to hospitals rather than going into profits or management expenses”.
He also cast doubts on “the wisdom of such important assets being held in the hands of overseas private equity firms”.
“There is a strong national interest in the operation of private hospitals, And, with that, comes some social licence that obligates operators of private parts of the system to do so in a way that benefits the interests of patients, not just their owners or their lenders or their shareholders.”
