Tasmania's only large-scale private mental health clinic, the Hobart Clinic, to close inpatient site by end of October
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Source: ABC News (Australia) / Youtube.
Tasmania's only large-scale private mental health clinic will be closing down its main site, after years of bleeding cash.
In a statement, the Hobart Clinic said its inpatient site in Rokeby, a hospital with 27 beds, would shut down by the end of October.
The clinic has been providing mental health services for Tasmanians with private health insurance for 40 years, but has recently been plagued by financial issues.
The Hobart Clinic is Tasmania's only large-scale private mental health clinic. (ABC News: Kate Nickels)
Dr Stephen Ayre, the organisation's acting CEO, said the decision to close the service was made after projections indicated it was facing a deficit of $3 million this financial year.
Dr Stephen Ayre cited financial woes as partly to blame for the clinic's closure. (ABC News: Kate Nickels)
He said the majority of the clinic's patients are admitted on a short-term basis and the organisation would work to ensure "minimal impact" for patients.
About 100 people currently work at the facility and they will all be paid any entitlements they are owed, the acting CEO said.
Closure will be 'catastrophic'
Josie Mackey was a frequent patient at the Hobart Clinic between 2017 and 2020, before she was transitioned into the public system.She said the treatments she received at the site were very beneficial, and the dialectical behaviour therapy (DBT) program she took part in was "life-changing".
Josie Mackey said the care she recieved at the Hobart Clinic was "life-changing". (Supplied: Josie Mackey)
The closure comes just two years after the nearby St Helen's Private Hospital, which had 31 beds for mental health patients, closed down due to its crumbling facilities.
Ms Mackey said having just one major private clinic was already not enough for the level of demand, with many people having to travel to the mainland for specific treatments.
"Now the closure of the Hobart Clinic is going to be absolutely catastrophic for people because the public system can't handle the amount of mental health patients," she said.
Ms Mackey was an inpatient at the Hobart Clinic between 2017 and 2020. (Supplied: Josie Mackey)
Government urged to step in
A key union representative has warned lives will be put at risk if the Tasmanian government does not intervene to keep the service running.Robbie Moore, the state secretary of the Health and Community Services Union (HACSU), said the closure was "devastating" as many people are "absolutely reliant" on the clinic.
"The entire health system will fail if this goes ahead," Mr Moore said.
Mr Moore said the Tasmanian health system would fail if the Hobart Clinic closes. (ABC News: Ebony ten Broeke)
Mr Moore called on the state government to either take over the facility or make a funding arrangement with the Hobart Clinic.
"This is a statewide service that needs to continue because we have no other capacity in the system," he said.
This sentiment was echoed by Carolyn Shearer, who is both Ms Mackey's mother and a member of HACSU, the Tasmanian branch of the Health Services Union.
She said while the quality of service at the clinic had begun to decline, it was still vital for many people in Tasmania.
Ms Shearer said the Hobart Clinic was vital for many people in Tasmania. (ABC News: Emily Smith)
Scrapped deal with govt 'sealed' closure
The Tasmanian government helped keep the clinic afloat in recent years, providing more than $3 million in assistance.It also contracted four beds at the Rokeby facility to be used for public patients, however this agreement came to an end in May 2025.
The Hobart Clinic's inpatient site in Rokeby will shut down by the end of October. (ABC News: Kate Nickels)
Mr Ayre said this public-private partnership had been key in keeping the business running and the decision for it to not be renewed was a significant blow.
"We had some discussions with the government, but unfortunately it wasn't able to be continued," he said.
Minister 'confident' patients will get treatment
The state's Mental Health Minister, Bridget Archer, said the decision to close the clinic was another disappointing case of privately-run health facilities failing to be viable.She stressed there was enough capacity in the public mental health system to absorb any patients at the closing clinic.
"Importantly, we have significantly increased capacity across the public health system in recent years … with plans for more mental health hubs, including in the Huon Valley and new mental health precincts in the north and north-west," she said.
Bridget Archer said Tasmanians would still have access to mental health services, particularly with new public health hubs and mental health precincts opening across the state. (ABC News: Nick Haggarty)
Ms Archer said the government would assist the Hobart Clinic as it ceased services for clients and encouraged the organisation's staff to seek positions within the public health service.
In an additional statement, a spokesperson said the Tasmanian government had "already provided significant financial assistance to The Hobart Clinic since 2021, which has helped the facility keep the doors open".
"Unfortunately, despite this and even if the state again stepped in with public funds to prop them up, the Hobart Clinic has not been able to demonstrate any ability to keep their inpatient operations viable, which recognises the failing viability of privately-run health facilities across the country."
Decision after years of financial stress
The clinic began a "business transformation" in early 2024 in a bid to improve its finances, moving from employing psychiatrists in-house to a locum model.Dr Ayre said the transition to the new model was hampered significantly by issues attracting psychiatrists and continued financial losses.
Hobart Clinic closure , 17 September 2025 (ABC News: Kate Nickels)
He said it was a "well-documented fact" that inpatient mental health services across the country were facing increased financial stress, partly due to the level of reimbursement and payment by health insurers.
The clinic is currently treating about 20 patients, and the average length of a stay is two to three weeks.
Dr Ayre, who has been in his role for less than a week, said the plan was to discharge the final patient by October 17 and decommission the site in the following weeks.
He said no more admissions would be permitted from today and that the site would eventually be put up for sale.
The clinic is planning to move some of its treatment programs to its outpatient site Mind Hub, which will continue operating in the Hobart CBD "for the time being".
Written by: Monty Jacka, ABC News.
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