Healthscope is owned by Brookfield - the Canadian based multinational.
Whether one should equate Canadian business practices with those of its large North American neighbour?
Brookfield is large enough to sustain a push to increase it’s returns from it’s Australian hospital investment. We are a captive market where the public system has barely the capacity to meet the more critical needs of those without private cover. Something Brookfield and others can lever for as long as the public system lacks the spare capacity to apply pressure on the private.
Politicians have for decades announced foreign investment is essential because Australian’s are too poor to fund our own needs. Social comment is to ask how we can even afford to put money into super or buy a home? One perception of relative poverty!
Healthscope has gone into receivership/Administration. The owners are hopeful it can be sold off with no losses both to hospitals and staffing. Brookfield no longer own the business. Lenders are owed about $1.4 Billion, with current cash being about $110 Million and the CBA stating it will support the business to the tune of about another $100 Million to ensure a stable change of ownership. We will have to wait and see, with the Federal Govt ruling out any support to save the business due to its wholly foreign ownership.
Where this will leave Health fund members whose health funds have contracts with Healthscope hospitals , remains unclear. Will this situation mean that “No Gap” plans will again be void when using Healthscope facilities?
Further to the probable demise of Healthscope and that it is likely only about 6 of the hospitals are financially viable, there is concern that the private hospital businesses are struggling due to being financially constrained by the Health Funds not providing enough funding to maintain the businesses.
What this may mean for future gap payments and pressure on contracts is still an unknown. There is already signs that private hospitals are being closed because of the financial pressure on them.
An article from 2024 that highlights the already existing closures (that continue to happen).
A new closure (the article talks about the administration but newest information is that there no option but to close)
If health funds do not provide enough financial support to hospitals, then it is likely more closures will occur or gap payments will become the norm.
I continue to wonder why private health funds continue to enjoy so much profit taking and the Federal Government provides rebates rather than investing more money into the public health systems and hospitals. Public health hospitals provide most of the critical care for Australians (and there are no hospital treatment fees and no gap fees to pay and often only minimal other charges such as for discharge drug provision), while private hospitals provide about 65% of elective surgery in Australia.
