Private hospital operator Healthscope falls into receivership but assures patients it’s business as usual

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Private hospital operator Healthscope falls into receivership but assures patients it’s business as usual

The nation’s second-biggest private hospital operator, Healthscope, has gone into receivership after struggling to pay an outstanding debt worth over $1 billion.

Healthscope’s lenders on Monday appointed McGrathNicol Restructuring as receivers after being handed control by its former owner, US private equity giant Brookfield, earlier in May.

KordaMentha has been appointed as administrator.

Health Minister Mark Butler — who was reappointed to his role in Anthony Albanese’s second term of government — has already said it would not bail Healthscope out.

In a statement, Healthscope said while the parent companies were in receivership, the operational business — which runs the hospitals — is not.

It said all 37 hospitals across the country — including the Prince of Wales in Sydney and Melbourne’s Knox Private Hospital — would remain open and operating on a business-as-usual basis with no impact on its 19,000 staff, doctors or patient care.

In WA, it operates the Mount Hospital on Mounts Bay Road in central Perth.

Healthscope chief executive Tino La Spina said there was no interruption to patient care.

“Our incredible teams are all working as normal, providing the high standard of care they always have,” he said.

McGrathNicol partner and receiver Keith Crawford said there were no plans for closures or redundancies, and the intention was to transition to new ownership.

“We want to make it clear that the subsidiaries that own and operate Healthscope’s network of hospitals are not affected by our appointment to the shareholding companies,” he said.

“Our immediate focus is to engage constructively with all key stakeholders to ensure uninterrupted operation of Healthscope hospitals and continuity of best practice standards of patient care.”

It comes as Commonwealth Bank provides an additional $100 million in loan funding to help keep the hospitals operating while McGrathNicol undertakes a sales process.

The funding package from CBA was in addition to Healthscope’s current cash balance of $110m. Healthscope’s existing working capital financier is also providing support.

Healthscope said key supplier relationships would remain unaffected, with payment terms maintained.

The *********** Nursing and Midwifery Federation said it was in discussions with State and Federal governments to avoid closures, and wanted a say in who would control the company.

Mr Butler expects an orderly sales process for Healthscope.

“Throughout this process the government has been meeting regularly with Healthscope and we have clear expectations the hospital group, lenders, and landlords to act cooperatively and deliver the least disruptive outcome for patients, staff, and the broader health system,” he said.

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