What happens when healthcare loses sight of the patient? … Healthscope

Healthscope's entry into receivership this week – affecting 37 hospitals, 19,000 jobs, and countless patients – represents more than just a corporate failure. It's a case study in what happens when the economics of healthcare becomes disconnected from its fundamental purpose.

The facts are stark: A$1.6 billion in debt, owned by Canadian private equity firm Brookfield since 2019, now being managed by receivers while everyone scrambles to ensure "business as usual."

This is not a Black Swan event - I would argue they virtually never exist anyway - people see these things coming and normalcy bias overrides the best of intentions and the cleverest of strategies. If even just the clinical risks were evaluated, the signposts would have been glaring. Let's take the NSW Auditor-General's April report on Northern Beaches Hospital finding that it was "not effectively delivering outcomes" with ongoing "safety and quality issues."

Let’s be clear — people who are seriously unwell can and do die. That’s the brutal truth of healthcare. But in Australia, a culture of under-reporting and a system stretched to its limits means the cracks aren’t just visible — they’re felt every day. And when you bolt on a structure that enables no public reporting/disclosure, short-termism, and public/private culture wars - the patient is at risk of becoming but just another transaction.

We know the system is well beyond capacity. We know compassion fatigue is at a critical breaking point. We know throwing money at the wrong problems hasn't worked.

Here is where the strategies - and often patient care - continues to break down:

Digital Fragmentation That Serves No One:

We're still faxing patient records between providers in 2025. While other countries have integrated digital health systems, our fragmented approach means critical patient information gets lost in translation. This isn't just inefficient – it's dangerous, particularly for the 50% of Australians managing chronic conditions across multiple providers.

The Insurance Tug-of-War:

Just before its collapse, Healthscope attempted to introduce facility fees of $50-$100 after terminating contracts with major health funds. St Vincent's has had similar, damaging negotiations with NIB. These disputes might make business sense on paper, but they leave patients caught in the middle, facing unexpected costs or reduced access to care.

Private Equity's Current Healthcare Strategy:

Private equity acquisitions in Australian healthcare rose from three in 2008 to eighteen in 2022. These firms bring capital and efficiency expertise, but the debt-heavy models and short-term focus can create unsustainable pressures on healthcare delivery. They don't have to. They don't always. And they can change.

Here's what needs innovation: How do we create a system that incentivises quality care while maintaining financial sustainability? Because the current approach isn't working for anyone – not patients, not providers, not even the investors.

The Australian Nursing and Midwifery Federation called this "a stark reminder of the dangers of privatising essential healthcare services." But it's more nuanced than that. We do need private sector innovation and investment. We just need it aligned with patient outcomes, not working against them.

Having been both inside the system and on the receiving end of care, I believe we need:

• Digital infrastructure that actually connects – patient records should follow patients, not get stuck in institutional silos

• Incentive structures that reward patient outcomes alongside financial performance

The AMA's proposal for an independent Private Health System Authority makes sense. We need oversight that understands both the clinical and commercial realities.

This isn't about demonising private investment in healthcare, healthcare can benefit greatly from the discipline, the investment, and the innovation. But it is about asking harder questions: Are we creating systems that serve patients first? Are we building sustainable models that can weather economic pressures without compromising care?

Healthcare is complex. The financing is challenging. But at its heart, it's about people taking care of people. That's the principle we need to protect, even as we work through the economics.

What's your experience with healthcare system pressures? How do we better balance sustainability with patient care? We need unique solutions, innovation, and unique partnerships.

#HealthcareReform #PatientCare #SystemChange #AustralianHealthcare #SustainableHealthcare