Dozens of doctors at one of Sydney’s most well-known private hospitals fear its potential sale to for-profit investors will lead to cost-cutting measures, diminished safety standards and an exodus of highly skilled specialists.
Prince of Wales Private Hospital in Randwick is considered among the most profitable and prestigious facilities owned by Healthscope, Australia’s second-largest private hospital provider, which went into receivership in May owing $1.7 billion to lenders.
The private and public Prince of Wales hospitals are closely integrated. Credit: Dion Georgopoulos
The receivers are now considering stand-alone bids to buy Prince of Wales and four other crown jewel assets in Healthscope’s portfolio, which could generate enough money to pay down its debt and allow the company’s 32 other hospitals to continue operating under a new not-for-profit model.
The leading bidder for Prince of Wales is Pacific Equity Partners, The Australian first reported. The Sydney-based fund management firm owns Healthe Care, the country’s third-largest private hospital provider.
In a letter sent to receivers McGrathNicol on Friday, 57 doctors working at Prince of Wales across more than a dozen specialties said any bids from private equity-backed buyers should be treated with caution.
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“The operational model … raises concerns about the potential for cost-cutting measures that may inadvertently compromise staff support, clinical resources, and overall surgical experience,” the letter said.
“Hospitals cannot be sustainably run at ‘bare minimum’ levels without risking a decline in quality, morale, and ultimately surgical volume.”
Healthscope was bought by Canadian private equity giant Brookfield in 2019 for $4.4 billion, but struggled under the weight of rising interest rates, higher rents, and the inflated cost of delivering healthcare during and after the COVID-19 pandemic.
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