Vet Med on the Brink: Lessons from Wall Street. (#299)

What does Sydney’s Northern Beaches Hospital teach us about veterinary corporatization?

In recent years, Sydney’s Northern Beaches Hospital (NBH) in Australia has become a cautionary tale about what can go wrong when healthcare becomes a commodity.

Built and operated by Healthscope, a private healthcare provider owned by a private equity firm, NBH promised to bring state-of-the-art medical services to a growing population. Instead, it quickly became the focus of public outcry, media exposés, and political inquiries. Staff shortages, poor patient outcomes, mismanagement, and a glaring lack of transparency tarnished what was intended to be a model for public-private partnerships.

The veterinary world should take note.

While animals don’t vote or call into talk-back radio, their owners, and the veterinarians who care for them, are increasingly finding themselves caught in a similarly disturbing trend: the consolidation of veterinary hospitals by corporate entities, many backed by private equity firms.

The parallels with NBH are striking and troubling.

A Shift from Healing to Hustling

At the heart of the issue is a fundamental shift in priorities. Both NBH and many corporately owned veterinary hospitals operate under a model that places financial performance above patient outcomes. At NBH, frontline clinicians spoke of being under pressure to cut corners and adhere to rigid billing protocols. In corporatized veterinary practices, veterinarians report similar experiences: being evaluated not on the quality of care but on key performance indicators like average transaction value, number of consultations per hour, and revenue targets.

The result? Burnout. High staff turnover. And a creeping erosion of the trust that once defined the bond between carer and patient, or in the veterinary world, between veterinarian and animal owner.

The Disappearing Practitioner

In both cases, experienced professionals are being driven out. NBH saw a mass exodus of senior nurses and doctors who felt unsupported and overruled by non-clinical managers. Likewise, as corporate vet chains expand, long-time veterinary practice owners are selling up and leaving the profession entirely within a few years. Many cite the same reasons:

The loss of autonomy, the pressure to upsell, and the discomfort of answering to managers with MBAs but limited or no clinical training.

This corporatization of care doesn’t just affect staff morale. It alters the very fabric of patient interaction. Clients, human or animal, are no longer seen as individuals with unique needs. They are converted into units of revenue.

Promise vs. Reality

Both NBH and the corporatization of vet hospitals began with appealing promises. For NBH, it was better infrastructure, greater efficiency, and access to both public and private patients. For vet hospitals, it's often sold as an opportunity for growth, access to modern technology, and the burden of administration lifted from the shoulders of weary sole practitioners.

But as many now see, the devil is in the detail.

Healthscope’s primary obligation wasn’t to the community, it was to its shareholders.

And private equity firms in the veterinary space are playing the same game. They buy practices, consolidate services, streamline operations (read: cut costs), and seek to quickly increase the business’s valuation before flipping it for profit.

The lesson from Northern Beaches Hospital is not that private investment in healthcare or veterinary medicine is inherently evil. It’s that when profits are placed ahead of people, or animals, the result is predictable and often dire.

Veterinary professionals, like their medical counterparts, must now decide:

Will we accept this new model of care, or will we push back?

Some already are. Independent practice networks are forming. Ethical buy-back models are emerging. And pet owners, especially those with long-standing relationships with local clinics, are beginning to ask the right questions.

The choice isn’t just about business. It’s about values. And about the kind of future we want for our profession, and for those who trust us with their lives, whether they have two legs or four.

Rick’s Commentary

The Northern Beaches Hospital in Sydney, operated by Healthscope under a public-private partnership (PPP) with the New South Wales government, has faced significant challenges since its inception. These issues have raised concerns about the efficacy of privatizing public health services.

The key issues are as follows:

• Operational Challenges: Since opening in 2018, NBH has encountered staff shortages, mismanagement, and service delivery problems. These challenges have been attributed to the PPP model, which some argue prioritizes profit over patient care.

• Tragic Incidents: In September 2024, the death of two-year-old Joe Massa brought intense scrutiny to NBH. An internal investigation revealed serious failures in the hospital's management, including delays in treatment and miscommunication among staff.

• Financial Struggles: Healthscope, owned by private equity firm Brookfield, has faced financial difficulties, carrying a debt of $1.6 billion. This financial strain has led to considerations of selling the hospital or returning it to public management.

In response to these challenges and public outcry, the government introduced Joe's Law, legislation aimed at banning future PPPs in acute hospital services to ensure public control over critical healthcare facilities. Discussions are ongoing regarding the potential transition of NBH back to the public system.

Like the issues faced by NBH, the veterinary sector has seen a trend where corporate entities, often backed by private equity, acquire veterinary practices. This corporatization can lead to:

• Profit-Driven Models: Emphasis on financial performance may overshadow patient care, leading to concerns about the quality of veterinary services.

• Staffing Challenges: Corporate ownership can result in high staff turnover and dissatisfaction due to standardized procedures and reduced autonomy.

• Client Trust Issues: Clients may perceive a decline in personalized care, impacting their trust in veterinary services.

The experiences of Northern Beaches Hospital serve as a cautionary tale about the potential pitfalls of privatizing essential health services.

Both human and veterinary healthcare sectors must carefully consider the implications of corporate ownership to ensure that patient and animal care remain the central focus.

Further Reading

Health giant wants to check out of 'great hospital'. https://au.news.yahoo.com/private-hospital-giant-wants-major-034004022.html

Northern Beaches Hospital. https://northernbeacheshospital.com.au/

Healthscope ready to return Northern Beaches Hospital to public system. https://www.abc.net.au/news/2025-04-10/healthscope-northern-beaches-hospital-return-to-public-system/105160656

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