Healthscope Announces it Wants to Exit Northern Beaches Hospital, Return it to the Government
commence discussions about returning the public hospital at Northern Beaches Hospital (NBH) to the NSW public system, consistent with the project deed'.
According to a statement issued by Healthscope on March 11, 2025, the company has entered into short-term forbearance agreements with its senior lenders. This arrangement gives Healthscope until May to find a “long-term solution” for its operations.
The struggling private hospital operator is preparing for a possible sale of the business after reaching an agreement with most of its lenders to suspend interest payments while it works to stabilise the company. The company, which is owned by global asset management firm Brookfield, is also having broader restructure discussions with its key stakeholders.
Healthscope operates 38 hospitals across the country, including the Northern Beaches Hospital.
On March 4 2025 HealthCo Healthcare & Wellness REIT (ASX: HCW) and the Unlisted Healthcare Fund (UHF) issued breach notices to Healthscope for failing to pay all rent due. HCW and UHF, major landlords to Healthscope, warned that if the breaches are not remedied, they will enforce their legal rights and seek to replace Healthscope's tenancies with other hospital operators.
The landlord said then only part payment has been received.
“HCW and UHF will enforce their legal rights and seek to replace Healthscope’s tenancies with other hospital operators in the event the breaches are not remedied.
“HCW and UHF are now in active discussions with alternative hospital operators,” the REIT said.
As a result, the REIT had withdrawn its FY25 FFO/unit and DPU guidance of 8.4 cents. However it assured investors it has cash and undrawn debt facilities of approximately $100 million and will receive additional support from HMC Capital as required, including the deferral of management fees.
That announcement came after the REIT announced in February 2025 that HMC Capital is in talks about a potential buyout of Healthscope, currently struggling with $1.6 billion of debt and rising costs.
Healthscope was bought by Brookfield for $4.4 billion in 2019.
As a result of these recent developments Healthscope announced on March 11: ''As part of these forbearance arrangements, Healthscope will commence preparations for a potential sale of the business, and concurrently engage in broader restructure discussions with its key stakeholders.
This forbearance provides stability of ongoing operations, and a greater likelihood of a longer-term solution in the best interests of all stakeholders.
Healthscope has also agreed a short-term deferral with a key landlord, Northwest Healthcare Properties REIT (NWH), who has been constructive in the process.
Having achieved these milestones we will also re-engage with the HMC managed entities and invite HMC to participate in discussions on longer term solutions that ensure relevant hospitals can sustainably operate.
HMC and potential partners are also said to be considering an offer for Healthscope. Healthscope has not received any proposal from HMC or any other potential partner.'' Healthscope said
On Thursday April 10 Healthscope chief executive Tino La Spina, who started as CEO with Healthscope in February 2025, said the company does not expect to profit by handing over the Northern Beaches Hospital into public hands but admitted removing its most troubled asset from its portfolio of 38 facilities helps pave the way for a sale of the debt-laden company.
“There is no desire by Healthscope to make any windfall gain. We want to know exactly what will be in the portfolio going forward because if people are going to bid for it, they need to have that clarity,” Mr. La Spina said.
“That’s what this is about, not wanting to be operating in a [public-private partnership] environment where quite openly there is new legislation which says we should not be able to exist in the future.”
Healthscope said in an issued statement of Thursday April 10 it has proposed switching ownership of the 400-plus bed hospital to the NSW government because the agreement it operates under was no longer viable.
The Minns government has to agree to take back the hospital as the contract signed by the previous government still has 13 years to run.
Healthscope said in a released statement:
'The NSW Government has recently introduced policy preventing the further use of PPPs in the health sector. Healthscope acknowledges that NBH continuing to operate as a PPP is no longer compatible with the Government’s objectives.
Healthscope’s CEO Tino La Spina commented the proposed hand back offer is in no way a reflection on the dedication and commitment of the NBH team, who care for thousands of patients every year.
“NBH is a first-class facility, served by qualified, skilled nurses, doctors and staff, whose clinical performance has been acknowledged and commended by independent authorities. They have Healthscope’s absolute support for the work they continue to do, in often intense circumstances.
“However, we believe it is best for the patients, staff and the Northern Beaches community that it is returned to NSW Health, if that is the Government’s preferred outcome.
“As the State’s appointed operator, we recognise we must work in alignment with the Government’s objectives for the health system overall, rather than in conflict with them.
“The public pressure brought about by the change in policy re PPP structures has created uncertainty about the NBH future and this has put strain on NBH’s people and operations. In the current circumstances, we believe NBH will operate more effectively as part of the public hospital system and its future is assured.”
Given what has preceded this offer, the NSW Government stated it has been notified of a proposal by Healthscope seeking to have Northern Beaches Hospital returned to the NSW public system, but will require questions to be answered first.
''The Minns Labor Government has made it clear it does not support public private partnerships being imposed on the state’s acute hospitals. Patients can be assured that there will be no impact on health services at Northern Beaches Hospital while any potential discussions take place.'' the government said
Treasurer Daniel Mookhey said on Wednesday April 10:
“I note the owners of Healthscope are engaged in a market process potentially seeking to exit the business.
“After the way Healthscope has managed this partnership, it should not expect to walk away from the Northern Beaches Hospital with a profit.
“The NSW Government will be watching to ensure that no-one is trying to make a windfall gain at the expense of the people of NSW.
“The Government will engage with Healthscope management after questions of its ownership and whether it remains a going concern are resolved.”
Minister for Health Ryan Park said:
“We have always made clear that we do not support public private partnerships being imposed on our state’s acute hospitals.
“We will carefully consider any proposal regarding Northern Beaches Hospital.
“We can assure the community that Northern Beaches Hospital will continue to operate without interruption during any discussions.”
Federal Member for Mackellar, Dr Sophie Scamps MP, stated she 'welcomed the news that Healthscope has offered to return the public component of the hospital to the State Government'.
Dr Scamps has been calling out long-term systemic operational problems affecting staff and patients at the hospital throughout her term in Parliament, and in February, called for the hospital to be bought back by the State Government.
“Today’s development is a major step to see the hospital returned to the State Government and end the only remaining public private partnership in NSW that is not meeting the needs of our community,” Dr Scamps said.
“Healthscope’s decision to offer the hospital back to the State Government is proof that the operator no longer has the desire, nor the ability to continue running our only major hospital on the Northern Beaches.
The State Government has an urgent duty of care to act and reassure our community and the staff at Northern Beaches Hospital that they are in safe hands and take the necessary steps to acquire the public hospital.”
Today’s announcement follows ongoing concerns from both staff and patients about staffing cuts that have stretched nurses, doctors and healthcare workers beyond their capacity, impacting the provision of services and the community’s confidence in the hospital.
“Today Healthscope has admitted that it’s better for patients, the staff and our community, if the Northern Beaches Hospital is handed back to the State Government. There’s a long way to go, but this is an absolutely critical step,” Dr Scamps said.
“Public hospitals must be publicly run to serve our community and support our hardworking health staff, not to make profits for corporations.
“I will continue to work with both the State and Federal Governments on the next steps to return Northern Beaches Hospital to public hands and deliver the high-quality public hospital services the Northern Beaches community deserves. As an Independent, I will never stop fighting for what is right for my community.”
Independent Member for Pittwater, Jacqui Scruby heralded the proposed return of Northern Beaches Hospital's public services to public hands as a major step forward but warns this is the time for action not complacency.
“The news that the hospital’s operators Healthscope have proposed the return of Northern Beaches Hospital to the NSW public system is a welcome development toward ensuring our community receives high-quality, affordable healthcare,” said Ms Scruby.
“But the deal is not yet done. We have a short window of opportunity to put significant pressure on the NSW government to acquire the hospital with the NSW Parliamentary Inquiry into the hospital currently underway.
“I cannot stress enough how important it is for people who have had adverse experiences to make submissions to the inquiry before it ends on 20 May. This is our opportunity to cement our case for returning it to public hands and will put pressure on the government to act.
“I’ve been inundated with stories - on the street and on social media - but unless they are submitted to this inquiry we risk losing momentum.
“The NSW Government has made it clear that public-private partnerships have no place in the management of acute hospitals across the state.’
Ms Scruby also assured local residents that the proposal will not affect healthcare services at Northern Beaches Hospital.
“I want to reassure our community that there will be no disruption to health services at Northern Beaches Hospital while any discussions around this proposal take place. The safety and care of our residents is my top priority, and I will work alongside the Government to ensure continuity of care.
“I look forward to working with the Government, Healthscope, and our community to ensure that Northern Beaches Hospital remains a vital, public healthcare asset that puts the needs of patients first.”
To lodge a submission in 'The safety and quality of health services provided by Northern Beaches Hospital' inquiry, please visit the Inquiry webpage.
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