SBRC Economic Development Manager Phil Harding and South Burnett Mayor Wayne Kratzmann at the South Burnett Private Hospital

July 5, 2013

The future of the South Burnett Private Hospital in Kingaroy has been assured with a decision by South Burnett Regional Council to take over running the facility.

Mayor Wayne Kratzmann told council had been faced with a dilemma when current operators Pulse Health approached him in late March this year and said they would not be renewing their lease when it expired on August 13.

Council owns the hospital building, a legacy of the former Kingaroy Shire Council which purchased the property in 2002 when the then-St Aubyn’s Hospital closed.

At that time, KSC formed a limited liability private company – Kingaroy Private Hospital Limited – to manage the lease of the property.

The initial directors of this company were then-Mayor Roger Nunn, then-councillor Terry Fleischfresser, then-CEO Ron Turner, local businessmen Bob Hansen and Mark Huston, and Dr Keith Shaw.

This company then set about finding a hospital operator.

This arrangement ensured the hospital operation had no impact on normal rates and charges, other than Council’s upkeep of the building as landlord.

Since then, the hospital operators have changed several times, with the latest being NSW-based Pulse Health which took over day-to-day management in April 2008.

Mayor Kratzmann, who is the current chairman of Kingaroy Private Hospital Limited, said Council had been left with few options after Pulse approached him.

“We could try to make them change their minds, which wasn’t really an option,” he said.

“We could find another health organisation to operate the hospital. We could close the hospital. Or Council could take over the operation of the facility.”

He said closing the hospital was something that he wasn’t going to allow to happen as it was too important a facility for the local community.

Mayor Kratzmann said three hospital operators had been approached but none had wanted to take on the hospital as it did not meet their criteria.

Another operator had expressed interest, but in the future, not at the present time.

He also approached Health Minister Lawrence Springborg and Queensland Health to discuss the options.

SBRC Economic Development Manager Phil Harding was asked to go through a full “due diligence” procedure to see if the hospital was viable.

Mayor Kratzmann said historically the hospital had been very successful; it was run very efficiently and patient numbers were not declining.

When it was decided Council would have to take over the operation, they at first considered purchasing the company which Pulse Health had set up to be the operator. This would have ensured unbroken operation of the facility with no change in licences.

However after legal advice, it was decided it would be better if Council’s own company, Kingaroy Private Hospital Limited, took over.

As this would require the issuing of new operating licences – which could take several months – Mayor Kratzmann, Council CEO Ken McLoughlin and Mr Harding met with Pulse representatives in Sydney a fortnight ago to ask them to extend the lease, upon the payment of a small retainer, until these new licences were issued.

Mr Harding said he hoped these licences would be issued before the end of January next year, but they could come through sooner.

Mayor Kratzmann said both Queensland Health and Mr Springborg had been very supportive of Council’s decision to keep the hospital operating.

“Mr Springborg opened a number of doors for us and we are very appreciative,” he said.

He said Council had made a commitment that no one would be disadvantaged by the changeover, especially hospital staff who will have a change of employer.

Council will appoint a manager with medical experience to run the operation.

Mr Harding said the arrangement would also not financially disadvantage Council in any way and all profits would be put back into the hospital.

The due diligence process was still proceeding, with Council working on a three-year business plan for the hospital.

“We will not be changing the business model; in fact, we want to grow it,” Mr Harding said.

At the June Council meeting, councillors approved a $500,000 banking overdraft facility from the State Treasury for the hospital’s operations.

Mr Harding said this was “start-up working capital” to get the business established while there was a lag in private health fund payments.

In the Council Budget handed down this week, $333,000 was earmarked for the South Burnett Private Hospital.

Mayor Kratzmann said this was for roof repairs, which would have been carried out regardless of who had the operating contract.

He said all current services at the hospital would continue. The hospital’s Medical Advisory Committee, which represents the visiting specialists, had given its support.  

Visiting specialists at the moment include an ophthalmologist, general surgeons, cardiologist, paediatrician and dietician.

Services are provided to privately insured patients as well as Department of Veterans Affairs, Work Cover and self-funded patients.

Cr Kratzmann said Council would also be looking at opportunities in the future to do even more with the operation, including perhaps training and research and a co-located public/private partnership with Queensland Health.

Another idea Council had was to form a Foundation which could support activities at the hospital.

“We think the community will get behind it,” Mayor Kratzmann said. “The Foundation would be a completely separate body.”

The current board members of Kingaroy Private Hospital Limited are Mayor Kratzmann, Cr Damien Tessman, John Kersnovski, Dr Debbie Tellam, Dr Brad Butwell and Louise Kenny.

Footnote: If there’s a hospital operator out there who is interested in taking over, Council is still interested.

“If we had an offer we would seriously consider it,” Mayor Kratzmann said.

FLASHBACK: Kingaroy Shire Council took over operation of the former St Aubyn's Hospital in early 2002; then hospital executive officer Kathryn Erskine and Kingaroy Shire mayor Cr Roger Nunn are pictured with the first patient after the hospital re-opened its doors in April 2002, Mr John Perrett, from Kingaroy

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