This expensive lesson that profits and public hospitals are restless bedfellows was overlooked when NSW premier, Gladys Berejiklian, opened Healthscope’s newly-built NBH in 2018. From the state’s position, the Northern Beaches agreement was far superior to the Port Macquarie contracts. Healthscope advised the NSW Audit Office, “the NBH operates efficiently and delivers significant cost savings to the Government”.
Loading
NSW Audit observed that NBH “is not effectively delivering the best-quality integrated health services and clinical outcomes”, but that is perhaps a nebulous standard. What is evident from the audit report is that NBH surpasses the 16 agreed standards set by NSW Health. Healthscope says NBH “met or exceeded the performance of most other public hospitals in NSW on most clinical measures”.
There have been isolated but tragic mishaps affecting NBH patients, including the avoidable death of a young child last year. But these unfortunate health mishaps occur in every jurisdiction and would not cause the government to assume control of NBH’s operations. While there are valid criticisms of and shortcomings in NBH, it is providing a critical function.
Why then does Healthscope wish to surrender control over NBH? In Healthscope’s view, the intensity of government oversight of NBH is burdensome, and the level of public scrutiny undermines staff morale and public confidence. But, perhaps more importantly to Healthscope, the NBH agreement leads to significant and persistent underfunding by
government. Given Healthscope’s own reported financial difficulties, it is understandable that it would wish to shed a loss maker.
NSW Health has quality of service risks by installing pervasive reporting, but its funding of clinical services has proved intolerable to NBH which has suffered material financial problems.
Healthscope has concluded that the current model ruling the relationship between NBH and NSW Health is unsustainable. NSW Audit is sympathetic: its main recommendation is to question whether “the NBH public-private partnership is the appropriate model to deliver the best quality integrated health care”. This recommendation is tantamount to saying the NBH model ought to be abandoned.
But there is another question: while there are reports of successful for-profit, privately-operated public hospitals in WA, what model satisfactorily balances the provision of a free, high-quality health care, accountability to taxpayers and yet deliver acceptable profits?
The private sector has an important role in our society. So does government.
Tony Harris is a former NSW Auditor-General and senior Commonwealth officer.
