Healthscope Receivership Signals Private Hospital Sector Struggles

Photo by Martha Dominguez de Gouveia on Unsplash

Australia's second-largest private hospital provider Healthscope entered receivership yesterday, prompting concerns about the broader viability of the nation's private healthcare sector.

The company, which operates 37 hospitals across Australia, was placed up for sale by its owner Brookfield, a US private equity firm that acquired the business in 2016. All current medical services continue operating while the company seeks new buyers.

"Brookfield has decided to get out of the Australian private hospital sector," health economist Anthony Scott told ABC's Afternoon Briefing. "I think all current services are still being provided, so patients don't have too much to worry about at the moment."

The collapse follows years of mounting pressure on private hospitals, beginning with declining private health insurance membership since 2016. Scott identified multiple factors contributing to the sector's struggles, including rising premiums, escalating out-of-pocket medical costs, and reduced patient demand.

"People just thought that, well, I'm dipping out of private health care. Other alternatives might be better," Scott said.

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