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NSW’s new hospital model could be a boon for private operators

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NSW’s new hospital model could be a boon for private operators

Privatisation of public health services is often met with fierce criticism (co-payments or ‘Mediscare’ anyone?). But positive feedback for Sydney’s Northern Beaches Hospital has allowed the NSW Government to push ahead with a hospital model that could benefit all stakeholders, including private healthcare operators.

The Northern Beaches Hospital was an ambitious proposal, bringing together public and private patients in a shared facility and operated by a single private player. Healthscope won that tender in 2014 and construction of the hospital is well ahead of schedule. The NSW Government is now calling for the involvement of private operators to build, upgrade and operate five more public hospitals.

The model has appealing elements for all parties involved in health care. Importantly, all patients that present to the public hospital must be treated by the private operator, as is currently the case, and the Government will retain complete oversight over the care and the funding that is administered for public patients.

The private operator is incentivised to run the public hospital as efficiently as possible, but can also provide select care to insured patients. The co-location of premises also allows for greater coordination of care across the public and private platforms. This means less private patients in public beds, which should reduce the pressure on waiting lists.

If the community and stakeholders embrace the private input with the five public hospitals, it could open the door to further hospital upgrades in NSW, and might also be adopted by other State Governments.

Ben joined Montgomery Investment Management in 2012. Prior to joining Montgomery Ben was an Analyst at the Reserve Bank of Australia. Ben is a CFA® charterholder.

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This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564) and may contain general financial advice that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking advice from a financial advisor if necessary.

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