After months of chaos and speculation, Healthscope has opted for a not-for-profit reboot. Despite the fanfare, many are not convinced the drama is over.
After months of uncertainty, Healthscope has announced that the remaining 31 hospitals in the beleaguered hospital group will be restructured as a not-for-profit entity.
It comes after lenders rejected a last-ditch $120 million offer for the Prince of Wales Private Hospital from Pacific Equity Partners yesterday.
The plan is a big win for CEO Tino la Spina, who has been vocal in his support of the NFP model for some time.
“This is a transformative day for our people, our doctors, our patients and the Australian healthcare sector,” he enthused.
“Our whole organisation has been galvanised by the idea of transforming Healthscope into Australia’s largest not-for-profit hospital operator, reinvesting surpluses back into our hospitals and people to continually improve patient care.
“I want to thank our teams and our doctors for their support through what has been a challenging period, and I look forward to the exciting journey we’ll take together.
“I also want to thank Healthscope’s lenders for backing the For Purpose plan,” he said.
Receivers McGrathNicol said the not-for-profit plan has broad support from most employees, many of whom have voted to share salary packaging benefits to support the viability of the new operation.
Unlike most salary packaging options, which split the tax savings 50-50 between employees and employers, Healthscope was proposing workers hand over 90% of the tax savings.
With the non-denominational charitable structure, McGrathNicol said surplus funds will be reinvested into hospitals to support patient care and choice, employee engagement and wellbeing, and healthcare services.
However, a spokesperson also confirmed to HSD that at some point, lenders hope to repay themselves some of the substantial debt they’re owed from these business earnings.
Unions aren’t happy about the proposal, with HSU national senior assistant secretary Kate Marshall telling Health Services Daily:
“The not-for-profit system exists to serve the community, not to rescue big companies from their own financial mismanagement at workers’ expense. The HSU will continue fighting for Healthscope workers’ jobs and conditions throughout this process.”
Michael Whaites, general secretary of the NSW Nurses and Midwives’ Association, was more circumspect, however.
“We’re aware of Healthscope’s announcement to develop a not-for-profit structure and we’re currently working with our ANMF federal counterparts to consider what this means for our members across New South Wales.
“Importantly, we now know that no hospitals will close, and we have a clearer picture of what the future holds for these sites.
“This announcement provides some relief for members given the uncertainty raised concerns for their job security. We’ll continue supporting our members as they navigate next steps, and keep our communication channels open with Healthscope.”
The Australian Private Hospitals Association said it was relieved by the announcement as it means the hospital group stays intact.
“Anything that guarantees Healthscope’s full suite of hospitals continue treating and caring for patients, while ensuring stability for the dedicated professional staff at those hospitals, comes as much-needed relief for the Australian healthcare system,” APHA CEO Brett Heffernan said today.
“Alternative scenarios would have seen some hospitals cherry-picked, while many hospitals would likely have closed.
“That would have been a disaster for the patients relying on those facilities, the staff whose jobs were at risk, and an already over-stretched public hospital system.
“This has been a protracted period of uncertainty for everyone concerned and a distraction from the major issues affecting healthcare, so we hope that this decision now provides surety so everyone can focus on what Australian private hospitals do best, providing world-leading treatment and care for patients.”
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Federal health minister Mark Butler agreed.
“We’re delighted to say that it appears that all 35 of those hospitals operated by Healthscope will move in an orderly way to a new owner, the vast bulk of them being not-for-profit operators,” he said.
There were positive remarks from the Australian Medical Association with president Dr Danielle McMullen labelling the plan a good outcome for patients, Healthscope staff, doctors and private health insurers.
“This outcome reflects the importance of a stable and sustainable private hospital network as part of Australia’s broader healthcare system.
“Healthscope’s hospitals play a vital role in delivering high‑quality care, and ensuring they remain open and supported is in the best interests of patients and the health system as a whole,” she said.
Northern Territory’s health minister Steve Edgington also acknowledged the progress of a new ownership model that includes Darwin Private Hospital.
“The CLP government has again made clear that we remain committed to the restoration of private maternity services as part of any new ownership arrangement of Darwin Private Hospital.
“We look forward to further discussions with all relevant entities as these processes continue,” he said.
Despite the fanfare, the drama isn’t over yet.
Although the receivers said they were confident of securing support from all stakeholders, word on the street is the landlords aren’t feeling as charitable.
McGrathNicol has written to key landlords in the hope to have discussions “in good faith” about renegotiating rents. The large rents charged by some landlords, including Canada’s Northwest Healthcare Properties and Healthco, were believed to be part of the reason for last year’s collapse.
Both landlords had previously said they wouldn’t agree to a rate cut, however. Northwest is also believed to be angry that the receivers did not back an alternative deal it had with Calvary Health Care to take over the running of its 12 hospitals in the group.
The not-for-profit transfer won’t affect the sale of National Capital Private Hospital in Canberra to Ramsay Health, Hobart Private Hospital and Holmesglen Private Hospital in Melbourne to Calvary Health, Gold Coast Private Hospital to Mater Health, Tweed Day Surgery to Day Hospital Partners (completed in October 2025) nor the transfer of Northern Beaches Hospital to the NSW government.
The Australian Charities and Not-For-Profit Commission (ACNC) approved the not-for-profit application in October 2025. There is also progression in regulatory applications, with relevant approvals already secured across most states.
The new organisation is expected to be operational by mid-2026.