By Denis Hay
Description
Healthscope’s downfall reveals the full cost of privatisation in Australia. Discover how public services are suffering and what we can do to reclaim them.
Introduction: A Healthcare Giant Falls
It was a Monday morning in May 2025 when headlines broke: “Healthscope Enters Receivership: $1.6 Billion Debt Pile Topples Hospital Giant.” At 7:00 a.m., nurses in regional hospitals logged in to find emails marked “URGENT STAFF BRIEFING.” Panic followed.
Janine, a registered nurse at a Healthscope facility in Newcastle, remembered her reaction. “We had no idea. We just knew it wasn’t good news. Everyone was scared about losing jobs, patients, and pay.”
Healthscope’s collapse was more than a corporate failure; it symbolised how privatisation in Australia continues to threaten vital services. In this article, we examine how Healthscope’s downfall fits a broader pattern of failed privatisation and explore how Australia’s monetary sovereignty offers an urgent alternative.
The Problem: A Privatisation Model in Crisis
A Case Study in Collapse: What Went Wrong at Healthscope.
Healthscope, Australia’s second-largest private hospital operator, managed 37 hospitals and employed over 19,000 workers. But behind the clinical walls, financial rot festered. Crippled by a $1.6 billion debt, lenders finally pulled the plug (The New Daily).
1. Aggressive Expansion and Private Equity Ownership
After its $4.1 billion acquisition by Canadian private equity firm Brookfield in 2019, Healthscope entered a phase of aggressive expansion financed through debt. The company also took on heavy rental obligations for its hospital properties. These decisions left Healthscope dangerously overleveraged and financially vulnerable.
2. Conflict with Insurers
Tensions with major insurers, including BUPA and the Australian Health Service Alliance, broke down when Healthscope demanded added patient fees. The insurers refused. Healthscope retaliated by terminating agreements, leaving millions of policyholders in limbo and hospitals without critical revenue streams.
3. Management Instability
As pressure mounted, Healthscope cycled through key leadership changes. In early 2025, it replaced its CEO and board chair amid restructurings. During urgent negotiations, the timing further destabilised its operations (Health Services Daily).
4. External Economic Shocks
The COVID-19 pandemic, rising inflation, and delays to elective surgeries eroded cash flow. Mounting costs and disrupted services added to Healthscope’s structural weaknesses (ShareCafe).
While no direct evidence shows a deliberate siphoning of profits or a planned bailout bid, Healthscope’s decisions reflect a reckless, high-risk strategy typical of corporate ownership models focused more on return than resilience.
When Profit Replaces Purpose
A Nurse’s Despair: “How Did It Come to This?”
Newcastle nurse Janine sat in her car after her shift, looking at her payslip and wondering, “Will this be the last one?” Her voice cracked. “We used to be proud to work in healthcare. Now it’s a gamble.”
Aged Care Horror Stories
Privatised aged care has led to abuse, neglect, and deaths – all documented in the Royal Commission into Aged Care Quality and Safety. Profit took precedence over meals, staffing, and dignity.
Toll Roads & TAFE: The Domino Effect
Private toll road operators like Transurban extract billions annually, even as roads degrade. Once a cornerstone of public training, TAFE was gutted by funding cuts and competition reforms.
These aren’t isolated incidents. They’re symptoms of a system that has swapped public service for private profit.
Reclaiming Public Services
A Return to Public Ownership
Public ownership is not a fantasy. In Germany, over 280 cities have re-municipalised water and energy services with remarkable success. Paris regained its water supply in 2010, saving millions while improving quality.
Use Our Monetary Sovereignty
Australia is a sovereign currency issuer. We don’t need to “raise revenue” through asset sales to fund hospitals, schools, or infrastructure. As Modern Monetary Theory (MMT) explains, a federal government with monetary sovereignty can fund public services directly using public money, not taxpayer dollars.
Rather than subsidising failed corporations, we can invest in public systems that serve everyone.
Five Actionable Policy Shifts:
1. Re-nationalise critical infrastructure (e.g., hospitals, energy, water).
2. Fund TAFE and public education fully.
3. Introduce a Federal Job Guarantee.
4. Establish a public health insurance provider.
5. Remove profit incentives from aged care and health services.
A Country Sold, A Future to Reclaim
Healthscope’s collapse is not an anomaly. It’s a consequence of the failed ideology of privatisation in Australia. When essential services are run for profit, they inevitably fail those who rely on them most. Privatisation in Australia has been the con of the century.
The alternative is clear: harness our monetary sovereignty to reinvest in the common good. Public ownership isn’t just possible – it’s urgent.
Healthscope’s downfall reveals the full cost of privatisation in Australia. Discover how public services are suffering and what we can do to reclaim them.
Q&A: What You Need to Know
Q1: Is public ownership economically viable?
Yes. Countries like Germany and Norway successfully run public services without relying on privatisation. Australia’s monetary sovereignty enables direct investment in national infrastructure.
Q2: Won’t public ownership increase debt?
Not in the way people think. When the government spends, it adds financial assets to the private sector. Government deficits are private surpluses.
Q3: What can I do to help shift the system?
Support independent media, pressure your local MP, vote for candidates who advocate public investment, and share credible information with your community.
References
Healthscope offers to sell back Northern Beaches Hospital to public hands.
Northern Beaches Hospital Community Forum.
Corporate Control of Healthcare in Australia
Call to Action: Reclaim What Was Ours
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Thay’s it….
1. Re-nationalise critical infrastructure (e.g., hospitals, energy, water).
2. Fund TAFE and public education fully.
3. Introduce a Federal Job Guarantee.
4. Establish a public health insurance provider.
5. Remove profit incentives from aged care and health services.
**6. A public banking provider
I have watched public assets/services being privatised, over many years, each time we have been told “Privatisation will improved service and reduce cost”! Sadly, each time this has been proven to be a lie, in fact service has declined and costs have risen.
I note it has been suggested by the Victorian government, that the State Electricity Commision of Victoria (SECV), be be resurrected!!! I’d ask, why was it sold in the first place?
The collapse of Healthscope due in part to legal accountancy games to extract profit for the take over entity by sending the taken over entity into receivership, gives the Australian government a wonderful opportunity to re-enter the public hospital sector at a discount price and RETURN ALL GOVERNMENT FUNDING TO GOVERNMENT HOSPITALS ALONE.
As seen in Queensland under the Campbell Newman return to ideological thinking rather than service to the voters, the unelected political hacks who control the COALition political parties have little interest in ”government by the people for the people”, preferring instead, ”rip off as much as we can for as long as possible and make sure numero uno is the only winner”. The list is as long as it is underwhelming.
Privatisation is a sham to pass ownership of properly managed public assets to select entities of the private sector so that prices can be increased to satisfy the greed of the new private owners. It is time to take back the essential services to government administration and ownership.
So very true.