How corporatisation is redefining the value of healthcare

More than half of Australia’s diagnostic imaging clinics are now in the hands of large for-profit corporations, a shift that is sparking critical questions about equitable access, cost, and the quality of care in a sector increasingly shaped by corporate ownership.

Australia has seen 75 private equity acquisitions of healthcare delivery assets between 2008 and 2022, including IVF providers and medical clinics. General practice has been particularly affected, with 256 of 446 clinics acquired during 2017–2022. Ophthalmology and oncology services have also been part of this trend, with seven companies owning 24 eye clinics, and four deals encompassing 60 oncology clinics – all tied to a single provider group.

New research led by Dr Sean Docking, Health Economist at Monash University’s School of Public Health and Preventive Medicine, has revealed that eight for-profit corporations now control 51% of all diagnostic imaging clinics across the country.

In several jurisdictions, including South Australia, Tasmania, the Northern Territory and the ACT, the concentration is even more pronounced, with a single company controlling 30% or more of all non-government imaging services.

“It is a $6 billion market and an attractive investment opportunity for corporations and private equity firms,” said Dr Docking. “The receivership of private hospital chain Healthscope after its acquisition by private equity investors has recently placed this issue firmly in the headlines.”

The rapid pace of corporatisation is raising red flags about the potential consequences for the Australian healthcare system, particularly in relation to equity of access, overuse of services, and the tension between profit-driven models and public health objectives.

“The sale of Australia’s largest imaging provider, I-Med, is nearly finalised for a reported $3 billion,” Dr Docking said. “While private investment can bring benefits, evidence from other countries suggest that corporate ownership is associated with higher healthcare costs [for patients].”

The implications of this shift are echoed in a recent international review of longitudinal data across eight high-income countries. The review found that “healthcare privatisation has almost never had a positive effect on the quality of care. But outsourcing is not benign either, as it can reduce costs [for the business], but seems to do so at the expense of quality of care.”

One of the most striking findings in the Monash study relates to MRI services, among the most profitable imaging modalities, where just four corporations dominate more than 50% of the clinics offering Medicare-rebatable MRI scans nationwide.

“These companies generate profits predominantly from taxpayer-funded Medicare rebates, making it essential for governments to ensure accountability and high-value care,” Dr Docking emphasised. “This research lays a critical foundation for future investigations into how corporatisation is shaping the delivery and value of healthcare in Australia.”

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