Heat is on to put Sydney’s privatised Cayman Islands hospital back in public hands

by Michael West | Feb 26, 2024 | Government, Latest Posts

Is the Cayman Islands-controlled operator of the Northern Beaches Hospital overcharging the government for public beds? It appears Brookfield is charging the local health authority more than twice the cost per bed than Royal North Shore Hospital. Michael West reports. 

“The taxpayer is paying almost $700 million per year to a company masquerading as a hospital operator which, at best, can deliver services for 250 public beds, yet the Royal North Shore Hospital, which has about 700 public beds, costs the taxpayer about $700 million a year to run.” 

This is the analysis of Andrew Gill, whose son Josh Gill died in tragic circumstances in the wake of hospital negligence at Northern Beaches in 2021. Gill, a lawyer, sued the hospital operator and settled confidentially – gaining a commitment that $11m would be spent on the youth mental health crisis – and has since campaigned to have the Hospital put back in public hands. 

The movement is gaining traction in the community with local MP Sophie Scamps, herself a doctor, raising the issue in recent days. That the Hospital operator never made good on its mental health commitment has helped. 

“It is disappointing that more than two years after the former NSW government announced funding for a four-bed youth mental health unit [in the wake of Josh Gill’s death], the Northern Beaches Hospital management has refused to provide the services.

“This raises a bigger question about whether this private hospital model is in our community’s interest. I am deeply concerned about the arrangements, and I will await the outcome of the NSW audit into the hospital with great interest.” 

We reported last year in a joint investigation by MWM and Andrew Gill that the operator was not subject to financial penalties for its breaches and that financial arrangements were highly skewed in favour of Healthscope/Brookfield.

Privatisation inquiry call: Cayman Island owners pay no penalty for Australian hospital fails

If the point of privatisation is to provide financial efficiencies for the public, it is doubtful this has been achieved – as the comparison with Royal North Shore would suggest. The greater issue, according to Andrew Gill, is the clear conflict of interest in having a hospital, an essential asset (and, in this case, a monopoly), run for profit for the benefit of a foreign financial engineering group. The lives versus profits conundrum.

Gill believes the group is in serial breach of its contractual obligations, but there is no public record of specific breaches and medical negligence claims.

Numerous approaches have been made by MWM to the operator Healthscope (owned by Brookfield) and to the Northern Sydney Local Health District but both have failed to provide transparency either around the financial arrangements or of the breaches of their health services contracts.

As to the cost of putting NBH back in public hands, if the operator is in breach of its contract, which may be the case due to ‘Step-ins’ under the contract where medical breaches must be disclosed, then compensation to the operator could be contained.

 As for the audit on the NBH, he says there has been no recent announcement from the NSW Audit Office as to an audit being conducted on the NBH. “The potential for an audit on the NBH was announced in the 2023-26 Annual Work Program which was published on the NSW Audit Office website on or about 20 October 2023..

“As “follow the dollar” auditing now finally applies in NSW, the owners of the NBH should be very afraid if the NSW Audit Office does its job to protect the public from the grotesquely ravenous charging policies of the ultimate owner of our local public hospital, which is Brookfield Asset Management (a Canadian asset manager who specialises in owning global ‘infrastructure assets’) who boosts of having an asset position of over $1 trillion.

 In December 2014, NSW entered into a public-private partnership (PPP) to deliver the Northern Beaches Hospital. Under the terms of the PPP, the private sector designed, built, operates and maintains the new hospital, which provides free public patient services as well as a range of services for private patients. 

“The Northern Beaches Hospital is a part of the Northern Sydney Local Health District, and the private sector partner remains responsible for providing publicly-funded health services until October 2038. Using follow the dollar provisions, this audit may examine whether the Northern Beaches Hospital is delivering publicly-funded health services transparently, efficiently and effectively.” 

It is the word “may” which is key says Gill. “Again, very equivocal language … there is no guarantee that an audit will be held, which is disturbing when it seems very clear now that the taxpayer is paying [a fraction of the cost to operate RNS Hospital].”

Follow the dollar legislation passed in November 2022 and expanded the Auditor-General’s mandate by providing the power to conduct performance audits of any matter where public resources are used to deliver services to the community.

“In this way, the Auditor-General will be able to follow the dollar. That means the Auditor-General will be able to report to Parliament about whether total public resources allocated to a particular program have been managed and applied effectively, economically and efficiently and in compliance with all relevant laws. It will no longer matter whether the body delivering those services is a government or non-government entity.”

From the Northern Beaches of Sydney to the Northern Beaches of George Town, Cayman Islands

Analysis of hospital costs

In the 2021-22 NSLHD Financial Statements, see Table 29, an insight could be gleaned as to how much we the people of NSW were paying the NBH:

  • As at 30 June 2022, the NBH was owed “$51.6 million” for the month of June 2022. 
  • As the NBH sends a “monthly bill” to the taxpayer (via the NSLD who is apparently meant to look after our interests: source, Project Deed) and as there are 12 months in a year then, if we owed the NBH $51.6 million for one month’s worth of service, the approximate yearly funding cost is about $600 million.  That is what my analysis was based off and supported my statement that we pay $600 million for 250 public beds at most.
  • The NSLHD has not told me that my estimation is incorrect (source: formal correspondence between myself and the NSLHD where I asked specific questions on this issue).

In the 2022-23 NSLHD Financial Statements, there is now no separate category for the ‘payables’ owed to the NBH by the people of NSW:

  • Table 30 is the Table that was Table 29 in the previous years’ financial statements. 
  • Now, rather than telling us what is owed to the NBH, Table 30 suggest that authorities have decided to reclassify the NBH costs into a catch-all category of “Creditors” – that number is now “$124.3 million” and no detail whatsoever is provided on the NBH as a separate category.

Editor’s Note: transparence in regards of the use of public money by NSLHHD is poor and it would appear that ‘reclassification’ is a ruse to hide costs.


Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.

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