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Australia's private hospitals face closure after coronavirus causes elective surgery ban

<span>Photograph: Mike Bowers/The Guardian</span>
Photograph: Mike Bowers/The Guardian

A leading healthcare operator has warned dozens of private hospitals across the country will be forced to close over the next week, standing down thousands of health workers, unless governments help replace the revenue lost when elective surgery was banned.

Healthe Care, Australia’s third biggest private hospital operator, told its workforce on Thursday that “a considerable portion” of them would be stood down on half pay for at least four weeks because governments had cancelled all non-urgent elective surgery as it sought to limit the spread of coronavirus.

Private hospital industry associations said other providers would follow, and a failure by state governments to support them would have dire consequences for national health capacity as the pandemic worsened.

In a letter to staff seen by Guardian Australia, Healthe Care’s head of speciality services, Julia Bellamy, said the company had been forced into a shutdown period.

“Due to the escalating Covid-19 pandemic and its impact on our business we find ourselves having to make some very difficult decisions which are completely outside our control,” she said.

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The company’s chief executive, Steve Atkins, told Guardian Australia the prime minister, Scott Morrison, caught private hospitals by surprise when he announced on Wednesday that non-urgent elective surgery would be banned from midnight that night.

He said it would not be difficult for private providers to do a deal with public hospitals to support them during the crisis, but they needed urgent government help so they could stay open until they were required.

Atkins said Healthe Care, which owns 34 hospitals and employs 8,000 staff in eastern states, generated about 70% of its revenue from elective surgery. The other 30% had begun to decline as people stayed home and private hospitals responded to calls to save dwindling supplies of protective equipment for urgent cases.

“We’re sort of between a rock and a hard place when our revenue has been cancelled on us without notice,” he said.

“We’re hopeful that the states and other providers and us will get an other arrangement in place promptly, but if this doesn’t happen soon what we have seen [with staff being stood down] in the last few days will be a small impact compared with what we will see in the next week once elective surgery stops completely.”

Atkins’s statement was supported in a joint statement by the Australian Private Hospitals Association, Catholic Health Australia and Day Hospitals Australia.

The groups called on the states and territories to deal with concerns raised by the federal health minister, Greg Hunt, as part of a national coronavirus partnership on Wednesday, and guarantee the viability of the private sector in return for a guarantee all hospitals would be geared to treat the virus.

Michael Roff, from the Australian Private Hospitals Association, said negotiations with states and territories had been fragmented. “The states don’t seem to understand the urgency of reaching a deal this weekend. If they don’t do that the beds they need in a few weeks’ time may no longer be available,” he said.

The Catholic Health Association’s Pat Garcia said all hospitals should be using the time before the “full coronavirus onslaught” to train existing clinical staff and hire additional staff. “Hospitals cannot simply close down entire wards and ICUs then turn them back on at the flick of a switch,” he said.

Hunt said the national cabinet, made up of the prime minister, state premiers and territory chief ministers, had committed on Friday to urgently finalising agreements with private hospitals to ensure they had “sufficient and viable” capacity during the pandemic and once it was over.

A NSW Health spokeswoman said it was talking to private hospital operators “focusing on how private hospitals can help support the health system with their facilities and workforce”.

Brett Holmes, general secretary of the NSW Nurses and Midwives’ Association, estimated more than 600 nurses across the state had been stood down since Thursday night and hundreds more could follow. He accused the federal government of bungling the announcement of the elective surgery ban.

The government announced on Wednesday that all non-urgent surgery except for category 1 (operations classified as required within 30 days) and urgent category 2 (procedures required within 90 days) would be postponed from midnight that day.

The start of the ban was later pushed to 1 April. Holmes said the biggest private operator, Ramsay Health Care, stopped non-urgent surgery on Friday.

“There doesn’t seem to have been a lot of forethought of the consequences of sending people on leave and laying them off and, when the shit has hit the fan in four weeks’ time, relying on them coming back into what will be a pretty daunting situation,” Holmes said.

He said it was an “astonishing breach of faith” that a private health provider would let nurses go at a critical time of need.

“I urge the state and territory governments to complete whole-of-sector agreements with the private hospital sector in the timeframes agreed at national cabinet,” he said.