The Fin The fight to save Australia's private hospitals
Apr 9, 2025
Michael Smith, Health editor at the Australian Financial Review, discusses the looming crisis facing Healthscope, Australia’s second-largest private hospital operator. He highlights the complex battle between health insurers and private hospitals, exploring the financial struggles exacerbated by the pandemic. Smith addresses how private equity could disrupt healthcare infrastructure and the implications of potential ownership changes. With urgent calls for government intervention, he underscores the need for a balanced approach to sustain both public and private healthcare sectors.
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Australia's Healthcare System
- Australia's healthcare system is a mix of public and private care, with private hospitals handling 60% of elective surgeries.
- Private health insurance, covering over half the population, is required for private hospital care.
Insurers vs. Hospitals
- A symbiotic, yet tense, relationship exists between health insurers and private hospitals due to funding disagreements.
- The pandemic significantly impacted this dynamic, causing financial shifts and operational challenges for both sides.
Healthscope's Struggles
- Healthscope, Australia's second-largest private hospital operator, faces financial struggles under Brookfield's ownership after a leveraged buyout and sale-leaseback deal.
- The pandemic exacerbated Healthscope's problems, leading to soaring costs and reduced patient numbers.