Private equity puts profits before patients
Rachel David
CEO of Private Healthcare Australia | Accomplished Business and Political Strategist | Business Leader | Expert in Federal Government Regulation | Health Policy Advocate | Corporate Affairs Specialist | Board Director
In no world should Australian consumers be expected to bail out a $1.4 trillion dollar Northern American private equity firm because of its bad business decisions.
That’s the scenario we are facing if any credibility is given to the campaign launched this week by Healthscope hospitals and its owner Brookfield.
Let’s be clear, Brookfield is a North American private equity firm managing $1.4 trillion in assets. It’s nonsensical we have a situation where an incredibly wealthy foreign private equity firm is demanding a bail out which will mean Australians have to pay more for their private health insurance, all so it can avoid funding its own asset.
Their alarmist and misleading public campaign is designed to pressure the Federal Government and Australian health funds into propping up its network of 38 hospitals after it took a risky punt on the business in 2019.?
The campaign is unfairly targeting individual health funds, who already have contracts in place with Healthscope. These funds have bailed them out once already and now Healthscope/Brookfield has come back for seconds.?
This might be common practice in North America, but it’s not the Australian way. We’ve seen the consequences of private equity investors encroaching on US healthcare, exploiting businesses and selling them off for profit while essential services are put at risk and even closing. Private equity puts profits before patients, and is not interested in investing in our health system for the long term.?We can’t let this happen in Australia.
Brookfield private equity bought Healthscope in 2019 with a goal to make as much money as possible for its foreign investors, but it took on too much risk and too much debt. Brookfield sold off the assets, sent the $2.5 billion profits offshore, and now they’re struggling to pay their bills due to inflation and high interest rates.
This week the Australian Financial Review shone a light on this practice:
There is no circumstance in which Australian health funds will be bullied into a bail out to enrich the foreign investors of a rapacious global company. We will not agree to any demands from Brookfield that will lead to Australians paying more for health insurance.
Healthscope is exaggerating the threat of hospital closures to alarm consumers and pressure the government and health funds into paying them more. Since 2018, 99 private hospital licenses have been revoked and 112 have been granted. There are more hospitals now than there were six years ago.
Healthscope’s campaign is designed to terrify people needing hospital treatment in the next six months, including pregnant women booked to give birth in Healthscope hospitals and people due to receive surgery and cancer treatment. This is deeply unethical.
Australian health funds will fight to protect their members’ interests and keep premiums as low as possible during these difficult economic times.
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Rachel, you state in your response that "Since 2018, 99 private hospital licences have been revoked and 112 have been granted. There are more private hospitals now than there were six years ago". There have been a number of figures and assertions made in the media and by various organisations over the past few months about the number of recent private hospital closures. I have sought clarity about some of these assertions from these media outlets and industry associations requesting they advise the source from which they have based their respective calculation, without success to date. Are you able to advise from which source/s you were able to access to arrive at the numbers you have stated in your response?
Healthcare Operations | Finance & Performance | Consulting
5 个月When looking non Healthscope numbers, the margin-squeezed struggle is very real and the problem is much bigger for smaller providers. Let’s focus on conversations that will make the private sector financially viable (for all providers) long term as without which, the public sector will have to fill in the gap.
Director, Sales Training and Development
5 个月Wouldn’t it be terrible to launch a scare campaign; exaggerating threats that is alarmist and misleading. I just can’t imagine ….
Healthcare Innovator | Strategic Leader | Challenger of Status Quo | Investor | Mentor
5 个月Rachel, some of your comments here could be deemed disinformation, and need to be called out. How have private health insurers in any way “bailed out” Healthscope hospitals? Or any others? There is no evidence offered by you to support this statement. Further, your use of the term “private equity” smacks of dog-whistling. The reality that your remarks deftly obscure is is that your organisation represents in large part for-profit private health insurers who are owned by shareholders including institutional investors just like private equity funds. The reality that you don’t acknowledge - and that there is plentiful evidence to support - is that private health insurers have benefited and continue to benefit in recent history following the pandemic. This is not merely a balance sheet benefit that was largely retained by funds (albeit some of which was returned to members), but now a clear and sustained profit benefit that is evidence of a dangerous shift in the delicate balance of our private healthcare system, has seen an increase in hospital closures and poses an imminent threat to many more.
Chief Financial Officer | Managing complexity and fast changing environments | Driving change | Technology focussed | Business coach | Commercial acumen | Team leadership | Business alignment | Problem-solving
5 个月Rachel, you may or may not be correct about Brookefield/Healthscope, but you are making a massive generalisation on PE putting profits before patients. In my experience, this is simply not true. Sure, profit is important as it’s needed to be viable enough to invest in top quality assets that will ultimately benefit fund members, but in my experience at Nexus Hospitals, patients and staff always came first. Without that, you don’t have a hospital. Without profits, you also don’t have a hospital.