I contribute to debate on the Health Services Amendment (PPP Prohibition) Bill 2025. Since 2018 the people of the northern beaches have been the subjects of an experiment in public health. In 2018 the Northern Beaches Hospital opened in Frenchs Forest in my electorate of Wakehurst, replacing the two former public hospitals servicing the area, Mona Vale and Manly. The Northern Beaches Hospital is a public-private partnership [PPP], where public health services are delivered by private operator, Healthscope, and paid for by the New South Wales Government.
It is the only hospital operating under this model in the State. This delivery model is underpinned by the project deed, a 350‑page contract between the Ministry of Health, Northern Sydney Local Health District and the private operator, Healthscope. The deed expires in 2038. With the new Northern Beaches Hospital, the people of the northern beaches were promised the best quality health care. In fact, Healthscope committed to perform in the top quartile of hospitals on many measures: The State would get those superior services at a discount. If that sounds too good to be true, it turns out that it was.
This PPP experiment for acute hospital services for public patients has not worked. I do not want this for other communities around New South Wales. That is what the bill is about, and that is why I will support it. The PPP for the Northern Beaches Hospital has been controversial from the start, but it has come under increasing pressure and scrutiny since the retirement of the former member for Wakehurst and Minister for Health. It should not have taken high-profile tragedies to get proper scrutiny of the hospital and the PPP model of public health care, but the reality is that it has. The Massa family in particular has brought this issue to public attention. I have huge admiration for their courage and conviction in sharing their story so publicly, and I thank them on behalf of the northern beaches community.
Since the Massas came forward with their story earlier this year, the Audit Office of New South Wales has published its performance audit of the hospital. That was a major milestone in the push for greater transparency and accountability of this facility. The report concludes that the public-private partnership "is not effectively delivering the best quality integrated health services and clinical outcomes to the northern beaches community and the State—the standard required under the arrangement and the key objective of the project deed". It states unequivocally that the "partnership is at risk of failure", with Healthscope having come to the Government twice at the end of 2023 requesting to return the public portion of the hospital 14 years ahead of schedule.
Sadly, Healthscope wanting to hand the hospital back was news to me. Having engaged with the Government on this issue consistently since becoming the member for Wakehurst, including numerous meetings with senior staff managing the contract with Healthscope, I was dismayed that no-one had mentioned that key detail to me or the public. Like many, Healthscope has described the contractual arrangements underpinning the operation of the hospital as "severely challenged". We know that Healthscope is under massive financial pressure and that the Northern Beaches Hospital is barely profitable. The Auditor-General found that NSW Health effectively manages the contract with Healthscope but "the public-private partnership structure creates tension between commercial imperatives and clinical outcomes".
The report highlights the importance of trust in the relationship between the Government and the private operator, and the antagonism that has often existed in the partnership. When we are dealing with a distressed commercial company, with lenders breathing down their necks, it is pretty clear what is motivating them and easy to see how the relationship could deteriorate. The seven legal disputes between the parties in 2019 and 2021 would have only added further strain. The Auditor-General's report identifies high rates of hospital-acquired complications including elevated levels of falls, third- and fourth-degree perineal lacerations and birth trauma. Cost cutting can be identified as a driving factor behind all of those.
The project deed was found not to support the hospital's integration into the local health district and broader health network. As the Government rolls out new initiatives, including safe staffing levels, the only public hospital for the 270,000 people on the northern beaches will miss out. Some other concerning findings in the report, which highlight the risks under the PPP model, were the status of the electronic medical record system used by Healthscope, which was found to be a contributing factor to Joe Massa's death, and the gaps in how minor harm or near-miss incidents at the hospital are reported and analysed, creating a real risk that emerging trends are not identified and addressed.
It is important to note that the Auditor-General's report finds that, on many high-level performance metrics, the hospital is doing relatively well, including in comparison to peer public hospitals. It has also maintained all necessary accreditation and licensing. I believe these positive outcomes arise from the incredible effort and dedication of the staff to ensure that the patients come first, in spite of the limitations of the PPP. This model is clearly not sustainable and, as the Auditor-General reported, some of the key performance indicators that have been met need further investigation, which is a concern.
The formal reporting of an Auditor-General's report does not, and cannot be expected to, capture the true human cost of how the PPP model is operating at the Northern Beaches Hospital. Front of mind for me are the people I have met and their stories: nurses, midwives, doctors, security guards and cleaners who are burnt out and under‑resourced, and families who are traumatised by their treatment at the Northern Beaches Hospital. I recently received a copy of the submission to the Auditor-General by the staff medical council, representing over 300 fellowed doctors, and it is shocking reading. I am glad that a parliamentary inquiry is underway so the voices of experienced and dedicated medical specialists, who have been working at the hospital since it opened, can be heard. I quote from their submission:
The Medical Staff Council (MSC) is strongly of the opinion that having entered into a PPP with Healthscope, NSW Health and the North Sydney Local Health District abrogated their subsequent responsibility for the provision of health care to the Northern Beaches community.
They also say:
Based on observations on the ground by Medical Staff Council representatives it is difficult for the majority of staff working at Northern Beaches Hospital (NBH) to believe with any credibility that the hospital meets its contract requirements for performance, planning and reporting when benchmarked against the stated intentions of the Government and its bureaucracy.
They also say:
The staffing levels, patient data, and outpatient services in particular, are absolutely not comparable with equivalent public health facilities in NSW.
The favourable performance and outcomes are due to the professionalism, dedication, conscientiousness and commitment of senior clinicians and junior medical officers.
It is the opinion of the MSC that the current resources provided by Healthscope make clinical practice at NBH unsafe to both patients and clinicians, compromises patient care, is unsustainable and is a recipe for wholesale burnout This is reflected by the attrition rate of doctors, nurses, and allied health staff since 2018. It is a statement of fact that innumerable doctors, nurses and allied health staff, who are members of the Northern Beaches Community, at great inconvenience to themselves, drive past Northern Beaches Hospital every day on their way to work in other hospitals located much further away due to their previous experience at NBH.
The quality of care that the Northern Beaches Hospital continues to receive is only because of the dedication and professionalism of the staff working at the hospital. That has come at immense personal cost to them, and we owe them a huge debt of gratitude. I also quote a career nurse who has been at the Northern Beaches Hospital since day one:
Healthscope has continued to cull staff just chipping away at what is left of our nursing workforce. This started with Emergency Department back a couple of years ago - when they just removed four nurses off the ED roster with no consultation. Since then we have lost positions in Mental Health, Maternity, Day Oncology, surgical and then as recently as last week, our medical wards have lost yet more nursing hours. Our skill mix is not appropriate and on some days plain dangerous. Our junior nurses need to be nurtured, mentored by seniors, but there's no longer enough of us to support them.
We leave a shift worrying that we haven't been able to give our best - because there's just not enough on the floor. We have minimal support staff, dysfunctional IT systems and nobody performs at their best inside a pressure cooker.
The reality is that, at the Northern Beaches Hospital, we are getting cut-cost health care and it is not sustainable. Staff are being squeezed and patients are being put at risk. This is all by design because of the arrangements in the project deed sitting behind the PPP. As outlined in the Auditor-General's report:
The public-private partnership anticipates that models of care and workforce composition at the Northern Beaches Hospital will differ from those deployed at public hospitals in NSW. This is because the public-private partnership model assumes that Healthscope will be motivated to establish efficiencies in operations to deliver value to investors, while accreditation and similar frameworks provide a safety net. This allocation of risk is described as one of the key advantages of the project deed that permits the State to achieve financial benefits from the arrangement overall. That is, by allowing Healthscope to find efficient modes of service delivery, including with respect to workforce, Healthscope is more willing to accept a discounted price for the services it delivers.
Is it any wonder our healthcare professionals at the Northern Beaches Hospital are under-resourced and stressed to breaking point? This was always the deed's intention, and it is a core reason I disagree with the PPP model in this context. Clearly, PPPs have been, and will continue to be, crucial in delivering some public infrastructure. But the bill recognises that acute hospital services sit in a different category. Public acute hospital services are about life and death. The bill unequivocally acknowledges that those settings are fundamentally inappropriate to be run with the profit motivation of a private entity. [Extension of time]
As a medical specialist explained to me, private hospital care works when people are not really that sick: "When you have simple, high‑turnover cases that's where you can achieve efficiencies. But emergency departments are for accidents and emergencies. By definition, those are things that cannot be planned. They are often messy and defined by uncertainty. People can be very sick, and get sicker very quickly." As a local nurse described it, "Our patients don't all arrive with a neatly packed overnight bag and a pair of slippers. They are not all tied up in a bow with completed medical histories and a list of their medications. They can arrive acutely unwell, frail and aged, with complex conditions, unstable, actively bleeding, in cardiac arrest, in handcuffs, in active labour. They are scared and we are struggling. Gone are the days where we gave holistic care—we now barely have time to perform task after task. Holistic care is a faint memory. We do our absolute best, but Healthscope has created a system that giving our best to every patient on every shift is no longer an option and it's not good enough."
More so than any other public service provided by the State, hospitals are where people go when they are at their most vulnerable and they are often most connected to what really matters in life—their own health and mortality, the grief of death and the joy of new life. It is a true test of a civilised society how we resource and service our citizens at those points. The Northern Beaches Hospital experiment has shown us that acute hospital services, including emergency departments, should not be run as for‑profit operations under PPP arrangements. I am pleased our State has learnt that lesson. I support the bill.
Read the entire Second Reading Debate of the Health Services Amendment (PPP Prohibition) Bill 2025, Here.