The health minister, Mark Butler, has convened an urgent meeting with the CEOs of Australia’s private hospitals and health insurers amid concerns regarding the financial crisis facing Healthscope, the second-largest private hospital operator. The Australian Financial Review reported that Healthscope has enlisted insolvency experts to develop contingency plans in case it enters voluntary administration. With over 488 beds and providing services to about 350,000 people in the Sydney region under a public-private partnership with the NSW government, a voluntary administration could lead to uncharted territory and require state intervention. Healthscope also operates 37 private hospitals nationwide and, like other private hospital groups, has faced challenges since the COVID-19 pandemic. The issues are particularly severe for Healthscope, which carries more than $1.6 billion in debt following its purchase by a Canadian private equity fund in 2019.

Healthscope faces further complications after receiving breach notices for failing to pay rent on 11 of its 38 hospitals and has plans to close maternity services in Hobart and Darwin. The meeting, scheduled for Friday, aims to discuss immediate steps to increase payments from insurers to private hospitals, focusing on the benefits ratio, which has decreased from 90% to as low as 83%. The CEOs have three months to negotiate a better funding deal; otherwise, Butler may take regulatory action.

Source: https://www.theguardian.com/australia-news/2025/mar/07/mark-butler-calls-australias-private-hospitals-and-insurers-to-urgent-meeting-amid-healthscope-financial-crisis