By transitioning Northern Beaches Hospital to public ownership the NSW Labor government has sliced a tentacle off the private equity monster that feeds off our health system.Northern Beaches Hospital was privatised by the Liberal government of Premier Mike Baird, a former investment banker.

Baird’s government signed a public-private partnership with Healthscope in 2014.Five years later, the North American private equity (PE) group Brookfield bought Healthscope for $4.4 billion.

PE firms such as Brookfield have rapidly spread their tentacles into health care.

A study published in The Medical Journal of Australia (MJA)in April2024 found PE firms made at least 75acquisitions of healthcare assets in Australia during 2008 to 2022, at a total cost of at least $24 billion.

The number of identified acquisitions rose from three in 2008 to 18 in 2022.

The MJA-published study found that, “Private equity firms are an increasingly important feature of the global investment and business ownership landscapes.”

“In Australia, private health care providers have become important targets for private equity firms, as an ageing population makes for-profit health care an attractive and recession-proof defensive growth asset.”

PE firms are usually quick-turnover operators who buy companies with money borrowed from investors.

They typically aim to sell or list their purchases on the stock market within a short time. The debt is carried by the business being bought – not the PE firm.

Loaded up with debt

This was Healthscope’s undoing.

Brookfield loaded up Healthscope with about $1.6 billion of debt owed to a syndicate of at least 25 lenders.

Healthscope found itself having to repay the debt at a time when the industry was struggling with higher costs.

Healthscope suffered from another classic PE tactic: selling the takeover target’s real estate then obliging it to rent the properties back.

This yields a fast profit for the PE firm but burdens the target company with high rents.

When Brookfield bought Healthscope, it sold Healthscope’s real estate to NorthWest Healthcare of Canada and Medical Properties Trust for about $2 billion combined.

Medical Properties then sold its Healthscope properties to another company, HWC.

“Having paid so much for the hospitals, HWC (HMC Capital’s property arm) charged what it believed was an appropriate rent,” reported the ABC’s chief business correspondent Ian Verrender.

“But by late 2024, Healthscope was in serious financial difficulties. It was drowning in debt, not pulling in enough revenue and unable to meet the rent.”

In May 2025, Healthscope’s lenders appointed a receiver due to the company’s financial troubles.