The NSW Government has referred t
he performance of Northern Beaches Hospital and its ownership structure - a public hospital run by a private company, Healthscope - to be reviewed by the NSW Auditor-General for the first time since it opened in 2018.
Federal Member for Mackellar, Dr Sophie Scamps and NSW State Member for Wakehurst, Michael Regan, have welcomed the recent announcement that the performance audit has commenced.
“We are proud that following our advocacy, this audit is now taking place,” the two MPs said.
“The Northern Beaches Hospital is staffed by skilled and committed doctors, nurses and allied health professionals, and this audit will assess whether these professionals are being supported structurally by Healthscope to be able to deliver the quality of care the Northern Beaches community deserves.”
“I would also like to thank the NSW Auditor General, Bola Oyetunjil, for his engagement with my office and other local stakeholders regarding the scope of the audit,” Dr Scamps said.
“I have been pushing for this audit since the Northern Beaches Hospital declined the $7.5million offered by the NSW government to provide a four-bed youth mental health unit.
That rang alarm bells for me. There needs to be far greater transparency regarding the hospital’s performance” the Mackellar MP said.
“Securing an independent performance audit of Northern Beaches Hospital has been a key priority for me since being elected to state parliament last year. At every opportunity, I have made it clear – we need it, and we need it now. Our community needs more scrutiny and accountability around the quality of care being delivered at Northern Beaches Hospital. That is what this audit will deliver,” Mr Regan said.
The audit will provide a real opportunity to test whether this unique public private arrangement is delivering for the 350,000 people who rely on Northern Beaches Hospital as well as assessing whether it is delivering value for money for taxpayers.
The official statistics from the Bureau of Health Information released this week confirm that wait times in Emergency are getting longer. Only 49.2% of patients left emergency within four hours during the January to March quarter compared to the state average of 56%. This was a significant deterioration compared to a year ago.
“The Northern Beaches Hospital is the only major hospital in the state operating under this model where public hospital services are provided by a private operator, Healthscope,” Dr Scamps said.
“Constituents contact my office with stories of unacceptably long waits in emergency. Doctors and nurses report chronic understaffing,” she said.
“I am also concerned about the reports in the media about Healthscope’s $1.6bn debt burden and the financial pressures of the private health system more generally. I hope the Auditor- General can reassure the public that the service at Northern Beaches Hospital is not being impacted by cost pressures.”
“An independent performance audit will be a very useful reference - providing more transparency and clarity for our community. Where the hospital is found to be performing well, we can build public confidence. Where there are issues, we can understand and work to address them,”. Mr Regan said.
“‘Northern Beaches is a private hospital, from which the NSW Government purchases public services. But to all intents and purposes, is the local public hospital, and the northern beaches community has every right to expect the same quality of services as other comparable public hospitals.”
“After all, that is what was promised with the opening of the Northern Beaches Hospital in 2018, when the two previous truly local public hospitals in Mona Vale and Manly were closed.”
Details on the performance of Northern Beaches hospital can be found in: Bureau of Health Information - Hospital Performance (nsw.gov.au)
A recent Deloitte audit report found that a material uncertainty exists as to the hospital's ability to continue as a going concern. The operator of the hospital, Healthscope, is also facing financial crisis. An Australian Financial Review headline in April read, "Healthscope lenders add McGrathNicol to $1.6 billion debt restructuring".
Many state that when insolvency and restructuring experts McGrathNicol are called in, that is not a sign of strong economic management.
That report follows a litany of issues at the hospital, including a 2019 Herald report that hospital staff were being incentivised with $500 gift vouchers to convert public patients to private so that the hospital could charge the private health insurers more money.
A May 2024 report by Michael West, ''Caymans Privatisation: Northern Beaches Hospital limps into financial triage'', states Northern Sydney Local Health District (NSLHD) accounts show an amount of about $600 million is being paid by NSLHD to the NBH for the public patient beds, around 2.5x what is paid for a bed in another hospital - Royal North Shore for example..
A 2020 parliamentary committee from the Upper House recommended that that type of PPP never be used again, finding that public patients were receiving a lower standard of care than private patients in the same hospital.
On 11 December 2014, the previous coalition government entered into a public-private partnership (PPP) to deliver the Northern Beaches Hospital. The government committed $600 million to the upgrade of health facilities on the northern beaches including the new Northern Beaches Hospital at Frenchs Forest.
The NSW Government planned on investing $400 million in road upgrades around the Northern Beaches Hospital in 2014, soon after the cost had become $500 million and by the end of all the works done, the cost had grown to $700 million.
The road upgrades did not include any allocation of funding towards ensuring the Narrabeen end of Wakehurst Parkway would be improved to prevent this closing, and limiting direct access to the new hospital for all those north of Narrabeen.
Under the terms of the PPP, the private sector designed, built, operates and maintains the NB hospital which provides public patient services as well as a range of services for private patients.
The Northern Beaches Hospital is a part of the Northern Sydney Local Health District and the private sector partner remains responsible for providing publicly-funded health services until October 2038.
The privatisation of these former government responsibilities has created a structural conflict between the interests of shareholders and their concern about profit, and the public interest.
That conflict is particularly acute in the context of the provision of public health care.
The Audit Office of NSW has commenced a performance audit on the hospital using the new "follow the dollar" audit. People can subscribe for updates that NSW Audit report here.
