"Highly distressing" — Healthscope enters administration

Australia’s Minister for Health and Ageing, Mark Butler, says news that Healthscope has entered administration “will be highly distressing to the patients, staff and local communities that depend on Healthscope’s services”. Butler noted that while one of the country’s largest private healthcare providers has announced that it will remain operating as normal — with no change to patient care or staffing — “this will still be difficult for the hospital’s employees and their patients”.

In a statement released on 26 May (the same day as Healthscope’s announcement), Butler said that the government has met with the administrator and the receiver to outline its priorities and expectations. “The government expects all parties to continue to put patient care and workers as their priority. We expect that these hospitals remain a critical part of our healthcare system,” Butler said.

“The government does not want any of these important assets to be put in jeopardy to satisfy international investors,” Butler added. “As the government has said all along, there will be no taxpayer bailout. We remain steadfast in our view that an orderly sales process that maintains the integrity of the entire hospital group will provide the best outcome for patients, staff, landlords and lenders.”

In the announcement that Healthscope’s parent entities have entered receivership, with its lenders appointing McGrathNicol Restructuring to work with Healthscope management to complete “an orderly sale of the business” and an additional $100 million in liquidity provided to support operations, Healthscope CEO Tino La Spina said, “All 37 of our hospitals continue to operate as normal and today’s appointment of receivers, including the additional funding, ensures a stable path to a sale, with no impacts on any hospitals, staff or patients.”

Spina added, “There is no interruption to the outstanding care we provide. Our incredible teams are all working as normal, providing the high standard of care they always have. The additional funding, while we do not anticipate it being required, provides additional support. The receivers and management share the same goal of maintaining our market leading standards of patient care and protecting the business, the hospitals and our amazing people.”

In the Healthscope announcement, it was said that McGrathNicol’s intention is to transition all hospitals to new ownership, with no plans for hospital closures or redundancies. “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,” McGrathNicol partner and appointed receiver Keith Crawford 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,” Crawford added. “We will also work closely with Healthscope management to support any operational funding requirements via access to $100 million of new funding from Commonwealth Bank while we pursue an orderly transition of ownership of Healthscope’s hospitals.”

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