Hobart’s last private acute mental health hospital, The Hobart Clinic, will permanently close in October after 40 years of serving the local community. The closure means many Tasmanians will now have to travel interstate, often to Melbourne, to access the care they need.
The Hobart Clinic’s decision comes amid broader challenges facing private hospitals. Rising costs, low insurer reimbursements, and policies that leave patients with high out-of-pocket expenses have pushed facilities to the brink. Acting CEO Stephen Ayre cited these financial pressures as the primary reason for the hospital’s closure. Around 780 patient admissions each year and 100 staff members will be directly affected.
The situation follows a series of closures across Australia. Toowong Private Hospital in Brisbane shut its doors in June, while St Helen’s Private Hospital in Hobart closed last year. Experts note that private insurers are recording record profits while limiting reimbursements to hospitals, which intensifies pressure on healthcare providers and patients alike.
Former industry spokespersons have warned that as hospitals struggle financially, patients face fewer options and reduced access to services. Mental health patients in particular are vulnerable. Many rely on general practitioners for medication or turn to public hospital emergency departments, which often lack the specialised resources to manage psychiatric crises. Families report living with constant uncertainty as access to urgent mental health care becomes increasingly limited.
The Hobart Clinic had previously partnered with the Tasmanian Government to reduce waitlists, but that agreement ended in June. The hospital also provided the state’s only in-patient transcranial magnetic stimulation (TMS) service, a non-invasive treatment for depression and other conditions when medication fails. In the public system, TMS is available only as an outpatient treatment with strict limits and fees, often forcing patients to travel interstate.
Private hospitals play a vital role in Australia’s healthcare system. They account for over 5 million patient admissions annually, deliver 70 per cent of planned surgeries, including hip and knee replacements and cancer procedures, and provide the majority of acute mental healthcare and rehabilitation services. They also employ more than 155,000 Australians, including over 59,000 nurses.
The closure of The Hobart Clinic highlights ongoing tensions between private insurers, healthcare providers, and government policy. As facilities close, the burden on public hospitals rises, raising concerns about access to timely care for Australians. Without intervention, industry experts warn that further closures could leave more patients without essential support.
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