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Healthscope is set to transition into a not-for-profit entity to preserve its network of hospitals following last year’s financial collapse.
The shift was decided after Healthscope’s creditors dismissed a private equity bid for Sydney’s Prince of Wales hospital. Instead, they chose to hand over the operations of 31 Healthscope hospitals, including Prince of Wales, to a newly established not-for-profit organization.
Among the remaining hospitals, five are slated for sale, whereas Northern Beaches Hospital in Sydney will transition to public ownership.
According to the receivers, this not-for-profit arrangement will ensure all hospitals remain operational, safeguarding jobs and alleviating potential strain on the public healthcare system.
Staff will maintain their current employment conditions and service recognition as they move to the new organization, with the transition expected to complete by mid-year.
“We are pleased we can now provide a clear direction to Healthscope patients, employees and communities about the future of their local hospitals,” Keith Crawford from receivers McGrath Nicol said in a statement.
“This has been a complex process involving a large number of assets across multiple jurisdictions, and detailed negotiations with many stakeholders.
“We believe the plan announced today for the Healthscope portfolio is in the best interests of all stakeholders, preventing hospital closures and protecting jobs.
“We look forward to continuing to work with the Healthscope team and key stakeholders to ensure the successful implementation of the plan in the interests of patients, employees and the Australian community”.
Healthscope CEO Tina La Spino said the organisation would become the country’s largest not-for-profit hospital operator.
“This is a transformative day for our people, our doctors, our patients and the Australian healthcare sector,” she said.
“Our whole organisation has been galvanised by the idea of transforming Healthscope into Australia’s largest not-for-profit hospital operator, reinvesting surpluses back into our hospitals and people to continually improve patient care.
“I want to thank our teams and our doctors for their support through what has been a challenging period, and I look forward to the exciting journey we’ll take together.”
Buyers were found for five of Healthscope’s hospitals, including Ramsay Health for Canberra’s National Capital Private Hospital in Canberra, Calvary Health for Hobart Private Hospital and Holmesglen Private Hospital in Melbourne, Mater Health for Gold Coast Private Hospital and Day Hospital Partners for Tweed Day Surgery.
The Australian Medical Association said the plan was a good outcome for patients, staff, doctors and private health insurers.
“Today’s announcement provides much‑needed certainty for patients, doctors, and the dedicated staff working in Healthscope hospitals,” AMA President Dr Danielle McMullen said.
“Continuity of care is essential, and this decision means patients can continue to schedule surgeries and treatments with confidence.
“This outcome reflects the importance of a stable and sustainable private hospital network as part of Australia’s broader healthcare system.”
But she said the collapse of Healthscope as a for-profit company was still concerning.
“Private hospitals across the country have been under increasing strain, and many private hospital services —particularly maternity — have closed in recent years,” Dr McMullen said.
“We remain concerned more closures will follow unless meaningful reform occurs and private hospitals can operate on a more sustainable financial footing.
“Establishing an independent Private Health System Authority is essential to provide proper oversight and drive the reforms the sector urgently needs.”
The private health system is currently regulated by the Australian Prudential Regulation Authority (APRA).
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