Radio interview with Minister Butler, ABC Hobart - 28 May 2025

LEON COMPTON, HOST: Mark Butler's the Federal Health Minister. Minister, good morning to you.
 
MARK BUTLER, MINISTER FOR HEALTH AND AGEING, MINISTER FOR DISABILITY AND THE NDIS: Morning, Leon.
 
COMPTON:  And so, can you guarantee Tasmanians that the Hobart Private Hospital will remain open?
 
BUTLER: What I sought earlier this week was a very clear assurance from Healthscope that there would be no interruption to procedures at any of the 37 private hospitals that Healthscope owns or operates across the country, and that includes Hobart Private. I said specifically to the owners, if you're one of the many thousands of Australians who have a birth planned or a knee reconstruction or other procedure booked at a Healthscope hospital in coming weeks and the next several months, can you assure them it will go ahead? And I received that assurance very clearly, and I'll be holding the company to it through this process. I want the process to be orderly, and I want it to lead to the transfer of these really important assets in our healthcare system to a more stable operator, frankly, than an overseas private equity firm who's owned it for the last several years.
 
COMPTON: Well, did the Foreign Investment Review Board actually look under the aegis of your government? Did the Foreign Investment Review Board actually look at that change of ownership and make a decision about whether it was good for a private equity firm from Canada to take on ownership of a company like Healthscope?
 
BUTLER: They did. We weren't in government, but we, as the opposition at the time, raised some questions about whether that was in the national interest to have an overseas private equity firm. I think today or this week particularly, I've been focused very much on the 19,000 staff who work at these hospitals 365 days a year, including almost 500 in Hobart, and also the many, many thousands of patients who have procedures booked who want confidence that there's going to be an ongoing operation of these hospitals while this process plays out. But I've also said that there will in time, I think, be reflection on whether this is the right ownership structure for such an important part of our healthcare system, the second biggest private hospital operator in the country.
 
COMPTON: And so Tasmanians will be asking and if perhaps looking, and I think I'm quoting from the Financial Review today, that other major private hospital operators in this country are facing similar pressures. How confident are you that the private hospital sector is actually viable with the relationship with private health providers and so on?
 
BUTLER: There's no question private hospitals are facing pressures, but there's also no question that Healthscope is a unique case. The ownership structure, the way in which this overseas private equity player tried to make money with a really quite unusual financing structure, particularly about the way in which it dealt with the bricks and mortar, the property itself is unique. And I don't think any other private hospital operator in the country is in that position. But I have also been very clear, I think we've talked about it, Leon, but there are pressures, and I've been responding to those. A few months ago, I said to the private health insurers who ultimately fund the operations of private hospitals, that they needed to lift the share of their income that they actually end up paying to hospitals. We've seen a reduction in recent years in the percentage of private health insurance revenue, so the money the big insurers get from the millions of Australians who pay their insurance premiums – a reduction in the percentage of that revenue, that actually ends up in hospital provided care.
 
And on the other side, you've seen an increase in their profits, an increase for some funds in their management expenses. I've said very clearly if they don't correct that position over a period of a few months, which starts to run out in the next several weeks, I would reserve the right to take regulatory action. What sort of regulatory action. Also -
 
COMPTON: What sort of regulatory action, Minister?
 
BUTLER: I think these insurers and hospitals understand, although they're private operations, they are subject to federal law. And I've got the department working on options that I could consider. I don't want to get to that point. I want the chief executive officers of the hospitals and the insurers, but also important players like the AMA, the Australian Medical Association, the nurse’s union, many others who have a clear stake in the operation of this part of the system, to come up with a solution themselves. I'm sure the insurers will have some views about the way in which hospitals operate today and whether they should be more innovative and more agile. But at the end of the day, if they can't sort this out, I'm going to have to as the Federal Health Minister. I've also put some reforms on the table that I think will update and modernise the way in which this sector works, and deal with some particular problems that you and I have talked about, Leon, before, in areas like maternity services and mental health where there are some very serious funding pressures and workforce pressures.
 
COMPTON: On Mornings around Tasmania, the voice you can hear this morning, Federal Health Minister Mark Butler joining us. We're talking about the single issue of the operator of Hobart Private going into administration this week, and the wider issue about what that means for Tasmania's healthcare system. Minister, you met with all of the state and territory health ministers yesterday, but specifically we're interested in Jacquie Petrusma, our Health Minister. What did you tell her about the relationship between the state-funded system and your management of the federally controlled private health operators?
 
BUTLER: We've got a really constructive relationship, both our two levels of government, but also personally, Jacquie and I. We acted very quickly when Healthscope you'll remember some months ago withdrew maternity services at the hospital in Hobart, and we provided some funding. Jacquie led a really proactive discussion with Calvary down there to ensure that mums and bubs and dads wouldn't fall between the cracks. We come off a good history of working together over recent months, and we've also been in contact over recent days just to swap notes to ensure that we're both confident that there'll be no interruption to service at the Hobart Private, and I did that again with all of the health ministers yesterday.
 
It's important to say that the company and the banks who effectively had control of the company before Monday when it went into receivership, have said that it has funding and forbearance on their loans to continue operating for 12 months, and potentially more. We're very confident that this can be a stable process. I'm really hopeful that there's a good, orderly operator out there who has a good history of operating in the private hospital system in Australia who will take up the opportunity of taking over these hospitals.
 
COMPTON: On 936 ABC Radio Hobart, ABC Northern Tasmania, Mark Butler, Federal Health Minister, our guest this morning. Minister, just a final question. Before we came on air this morning, I was listening to a story that Sabra was doing on AM about a private dental operator replacing people's teeth. People often were using their superannuation to fund that process, and it's gone belly up. I'm not sure if you heard the story, but I'm assuming it's been brought to you. How concerned are you by that practice and what role, if any, is there for the Federal Government to play in trying to protect consumers to a greater extent about this?
 
BUTLER: Look, I'm sorry, Leon, I didn't hear that story and that's the first I've heard of it, I will get a briefing about that. Obviously, these are private operations, but as we've been talking about in relation to Healthscope, the Government and I have a deep interest in making sure that they operate for the benefit of patients. All I can do, really, is take that on notice, Leon, and I'll get a briefing on what's happening in this, what sounds like a pretty awful case.
 
COMPTON: Yeah, it was just one of the last stories AM did this morning before we walked on air, and I thought it was interesting to hear people who were drawn down on their super to get critical dental work. Some of them left in that phase without teeth before they were replaced, and then having to deal with the wash up of the dental provider going belly-up.
 
Mark Butler, we always appreciate you being part of Mornings. Thank you for talking with us.