The former Calvary Public Hospital, pictured in July 2023, after the takeover. Photo: Claire Fenwicke.
The taxpayer bill for the shock ACT takeover of Calvary Public Hospital in 2023 will come to $88.2 million after the government and Calvary Healthcare agreed on a compensation deal negotiated last week.
The government forked out $23.2 million in 2023 to cover transition costs, including staff entitlements, equipment and supplies. It will now pay Calvary $65 million to cover 30 claims, including the major ones related to the land and buildings.
Legislation passed in 2023 to enable the takeover allowed for compensation claims for costs incurred as a result of the transition, including Just Terms compensation for the acquisition of the land and buildings and termination of the Calvary Network Agreement.
Health Minister Rachel Stephen-Smith said the cash payment agreed with Calvary was in line with projections at the time of the acquisition and had been set aside.
“It has been a long process, it’s been a collaborative process, we’ve really appreciated the work that Calvary has done with us, and it’s really good to have reached this settlement and to be able to move forward, recognising of course that Calvary continues to be an important partner in the delivery of health care in the ACT,” she said.
Talks to settle claims have been ongoing since the takeover, and in May this year, the Territory formally commenced negotiations to finalise all outstanding matters with Calvary.
The Territory has waived some debts, liabilities and other financial offsets, such as accrued leave.
It has also entered into an Operations Agreement with Calvary to support ongoing collaboration with Calvary Private on the Bruce campus.
This includes a 25-year deal to keep the current permit parking arrangements, split the current common utilities connection, and use and management of the air bridge.
Health Minister Rachel Stephen-Smith: Calvary still an important health care partner. Photo: Ian Bushnell.
Ms Stephen-Smith said the acquisition was made to enable the planning and delivery of the more than $1 billion new Northside Hospital, as part of an integrated health service with one operator at Canberra Health Services and owned by the people of the ACT.
She said this was progressing well, with the announcement in March of Multiplex as the project’s early delivery partner.
“I recognise that the acquisition and transition were stressful for many staff, and I thank the incredible teams at North Canberra Hospital and Clare Holland House that have continued to provide exceptional care as part of Canberra Health Services,” she said.
“Since the transition, there have been many achievements as staff have worked together across our hospitals to build a single integrated public health system.
“Calvary will also continue to be an important partner in delivering health care in Bruce and across the ACT through its private hospitals and aged care facilities.”
The $65 million payment to Calvary Health Care is to be made by 15 October but the Legislative Assembly will need to bring forward an appropriation from the next financial year to do that.
Calvary said that it now looked forward to focusing on an ongoing positive working relationship with the Territory to ensure people received the quality care they needed, when they needed it.
Opposition Leader Leanne Castley said Minister needed to explain where the $65m was coming from.
“What can Canberrans expect to be missing out on now that this figure has been announced?” she said.
“It hasn’t improved services. We know that ACT is still one of the worst jurisdictions for emergency and elective surgery.”
Under government regulation that governs how compensation for Calvary would be determined, the Territory is responsible for paying the market value of the Crown lease for the hospital land on acquisition day, any reasonable increase or decrease in the value of the hospital land and any costs incurred by Calvary through the transition.
However, the regulation also acknowledges that Calvary was given the land for free and was held by the organisation at no charge. It also recognises that the Territory paid for certain buildings and improvements on the land.
In 2023, Calvary challenged the takeover in the ACT Supreme Court but was rebuffed.
It applied for the law allowing for the forcible takeover of the hospital’s land and assets to be ruled invalid, as well as certain sections contained within the legislation.
