Major Underpayment Discovered in Australian Private Healthcare Sector
                     Major Underpayment 
Discovered in 
Australian Private 
Healthcare Sector
A significant underpayment issue has surfaced within 
one of Australia’s largest private hospital operators, 
Healthscope, revealing an estimated $21.7 million in 
unpaid wages. This affects hundreds of disability service 
workers and possibly several nurses who may not have 
received their full entitlements.
Healthscope, a prominent national private hospital 
operator and healthcare provider, reported to the 
Australian Securities and Investments Commission 
(ASIC) in April that it had engaged external advisers to 
thoroughly investigate the extent of these 
underpayments.
The company stated in its report, “While this review is 
ongoing, based on analysis undertaken during the 
financial year, Healthscope has recorded provisions of 
$21.7 million.”
Operating 38 private hospitals across Australia, 
Healthscope is currently addressing two main issues 
related to staff payments. One involves historical 
underpayments affecting 500 current and former 
employees at Healthscope Independence Services—a 
disability support service based in Victoria. The other 
concerns the accrual of annual leave for nurses in 
hospitals across New South Wales.
Healthscope’s hospitals in New South Wales include the 
Prince of Wales Private Hospital, Northern Beaches 
Hospital, Campbelltown Private Hospital, and 
Newcastle Private Hospital. Following its acquisition by 
Canadian infrastructure giant Brookfield in 2019, 
Healthscope has begun making remediation payments 
where appropriate.
“In both these instances, we have advised the impacted 
staff and have taken steps to resolve the issues as 
quickly as possible,” said a Healthscope spokesperson. 
“These are both historic issues that predate 
Brookfield’s acquisition of Healthscope in late 2019.”
This revelation comes at a time when the $22 billion 
private hospital sector in Australia is grappling with a 
financial crisis, driven by soaring costs and wages 
alongside declining patient numbers post-pandemic. At 
least ten private maternity hospitals have closed since 
2017, primarily due to workforce shortages, with five 
closures occurring in 2023 alone.
In 2023, Healthscope reported a loss of $648.9 million 
after writing down the value of its business by $919 
million due to revised expectations of hospital 
admissions and operating costs.
The underpayment of staff at Healthscope 
Independence Services impacted approximately 200 
current and 300 former employees. A spokesperson 
explained, “Employees were incorrectly classified in our 
payroll system, resulting in historical underpayments. 
Healthscope has engaged PwC to assist with identifying 
affected employees and calculating the remediation 
payments.”
Remediation payments to current and former staff have 
been progressively made, with final payments expected 
to be completed this quarter. Healthscope has self-
reported the underpayments to the Fair Work 
Ombudsman, which is currently investigating the issue.
The spokesperson for the Fair Work Ombudsman 
stated, “As this matter is ongoing, it is not appropriate 
to comment further.”
The other issue involves the accrual of annual leave for 
nurses in New South Wales hospitals, arising from 
complex clauses in the relevant enterprise agreement. 
Healthscope is working with the NSW branch of the 
Australian Nursing and Midwifery Federation to resolve 
the matter, which is currently before the Fair Work 
Commission.
A spokesperson for the NSW branch of the union 
declined to comment as the matter is under 
consideration by the Fair Work Commission. 
Meanwhile, the Health Workers Union, representing 
some Healthscope workers in private hospitals and 
disability care, was unaware of the underpayment issue 
but expressed no surprise given Healthscope’s history 
in the private hospital sector.
Professor Anthony Scott, a health economics expert 
from Monash University, remarked that the 
underpayment of Healthscope employees adds to the 
pressures faced by private hospitals. He highlighted the 
sector’s challenges, including workforce shortages, 
increased wages for healthcare workers, and reduced 
uptake of private health insurance amidst a cost-of-
living crisis.
In response to these pressures, federal Health Minister 
Mark Butler initiated an urgent review of the private 
hospital sector in June. This review aims to address 
skyrocketing costs and intense financial pressures 
threatening the sector’s viability, with a report 
expected by the end of August.
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