Health industry experts are warning the collapse of Healthscope - Australia’s second largest private hospital group - is an early warning for the financial viability of private hospitals.
00:00Healthscope has moved on its website to reassure its patients that it is business as usual,
00:08that there will be no interruptions to surgeries, nor will the fees or charges change for patients,
00:14and there won't be an impact on its 19,000 staff.
00:18And this is a pretty major player.
00:20As you mentioned, it is the second largest private health operator,
00:25with an estimated 650,000 Australians being treated every year at its 37 hospitals and clinics across Australia.
00:36And that includes this one, of course, at Melbourne Private here.
00:40We have also heard from the Australian Medical Association,
00:43and it says that patients should definitely not panic,
00:47that it does expect to see a seamless transfer of ownership
00:51after Healthscope found itself under a mountain of debt, some $1.6 billion.
00:56And it does say that it thinks that this will go ahead pretty seamlessly,
01:02as well as Healthscope saying that it has some $110 million in cash reserves to be able to continue operating,
01:09as well as securing loan funding from the Commonwealth Bank of some $100 million.
01:15But the state government says that it will not provide a taxpayer bailout.
01:20It says that clearly there is enough money there for Healthscope to continue operating for a couple of months at least,
01:28and also be able to enter into its own sale process.
01:32Looking at the bigger picture, Steph,
01:34what are people saying to you about what this potentially means for the private hospital sector?
01:39Well, we're hearing from several health industry experts,
01:45and they include the Professor of Health Economics, Professor Anthony Scott from Monash University.
01:52He says that this is really like the canary in the coal mine
01:55when it comes to the viability of private health hospitals,
01:59because what we're seeing is that private equities companies are deciding
02:04that maybe private hospitals aren't such a good investment.
02:08They're not financially viable.
02:10He says that this doesn't necessarily mean the beginning of the end of our private health system,
02:15but it does mean that we might end up seeing some trimming of services to keep costs down.
02:21Now, this is something that the Federal Health Minister, Mark Butler,
02:25is really keeping a careful eye on,
02:27and he's in fact fired a bit of a broadside to the private health insurers,
02:31urging them to ensure that they do keep those payment ratios up to operators.
02:37And that's because we really don't want to see a system where the public system is overburdened.
02:44Now, that of course would be disastrous for the public system
02:48if we saw a collapse of the private health operators,
02:52because after all, we do see some 70% of elective surgeries being conducted in private hospitals.
03:00Mark Butler says that he does see some accessibility and financial viability issues
03:07potentially coming up in the private sector.
03:10However, he is at pains to say that Healthscope's situation is unique
03:15because of its ownership structure.
03:17at least a class aboutIGHTB Bana feels some flexibility,
03:20but if they can deal with a seller with a CPA Bloor,
03:23which we'll try to recognize that it goespas' record.
03:25Shall we try to abound with an upgrade mode to a minute to elaborate hope to upgrade to some property that we can review and monitor them as well?
03:29Alright, I just need aieron right.
03:30Let me know that some sort of thing we've prepared to review in order for what we need to do.
03:31Our buying teams have something on at any level,
03:32if they're 500 per Derby and this if it's a tech model that passes off to yourself,
03:37we'll use it when they've got chocolate синffen to look too far fromanny Highland
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