The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Licensing and permit delays for its medical tourism programme cost Doctors Hospital $1.275 million in its last financial year, helping to propel it to a collective $261,391 net loss.

The BISX-listed healthcare provider’s annual report discloses how approvals delays meant its Bahamas Medical Centre on Blake Road hit just 53 per cent of its projected $2.64 million revenue target for the year to end-January 2014.

“Bahamas Medical Centre completed its first full year in operation,” the Doctors Hospital annual report said. “Total net revenue for the year was $1.399 million compared with $486,000 last fiscal.

“The revenue was $1.275 million below projection as the start of surgical programmes for international patients did not get off the ground due to licensing and permit delays.”

Doctors Hospital executives have previously complained about the impact extended permit delays were having on their business model and expansion plans. The point was again made forcefully in the annual report by chairman Joseph Krukowski, who wrote: “Delays in receiving the appropriate approvals for the projects to proceed continue to frustrate our intentions.

“Further delays could result in loss of these enterprises to other destinations, which appear more receptive to accommodating the operation. If this were to occur, it would be detrimental to the patient community, the medical profession, the hospitality industry and the country’s reputation in general.”

Doctors Hospital’s 2014 financials bear witness to the ‘dollars and cents’ impact this has had, with the company suffering an almost-$1 million reversal that took it from a year-before $723,757 profit to a net $261,391 net loss.

The company’s main asset, its Shirley Street hospital, still generated a net profit of $1.349 million but this was 27.4 per cent down on the prior year’s $1.859 million. As a result, it could no longer carry Bahamas Medical Centre, where the net loss increased by 41.8 per cent - from $1.135 million to $1.61 million.

Bahamas Medical Centre’s expenses also jumped from $1.621 million to $3.009 million, with salaries and benefits accounting for 46.5 per cent of the increase. Medical supplies were also up 21.2 per cent, as the facility was in use for the full year as opposed to just five months in fiscal 2013.

Meanwhile, Doctors Hospital said capital spending for its current financial year is projected to come in at $3.2 million - a decline on the previous year’s $3.7 million. Of the former sum, some $3.2 million will be spent on Doctors Hospital in Shirley Street, with the $0.3 million balance destined for the Bahamas Medical Centre.

Breaking down the healthcare provider’s performance, Doctors Hospital said net revenue finished $1.284 million higher year-over-year due to a 5.5 per cent rise in adult patient days. This was driven solely by increases in the intensive and intermediary care units.

However, total admissions dropped by 4.7 per cent - from 4,061 to 3,870. While in-patient care saw an increase in critical care/intermediate care, medical surgical saw a 1.8 per cent drop in activity.

Outpatient visits sustained decreased patient visits “below the level of the past two years”, something Doctors Hospital attributed to persons wanting to both save money and a reduction in those covered by private health insurance.

“As the economy continues to struggle, the level of insured individuals able to access private health care is shrinking,” the annual report said.

“Bad debt expense, as a percentage of patient service revenues, increased to 3.9 per cent for the year ended January 31, 2014, compared to 2.9 per cent the previous year. This represented an increase of $457,662 or 34.9 per cent, and is a direct result of increased self-pay patients in the critical care areas.”

The sums owed to Doctors Hospital by patients increased by four percentage points of the total, from 11 per cent to 15 per cent, year-over-year, while the proportion owed by insurers dropped from 89 per cent to 85 per cent. No single insurer owes more than 29 per cent of the total accounts receivables.

However, the number of days revenue in accounts receivable had dropped from 47.5 days at year-end 2013 to 32.5 this time around. And receivables as a percentage of revenues also fell from 12.8 per cent to 8.84 per cent.

Doctors Hospital’s expenses, meanwhile, continued to come under pressure. Total expenses rose 4.1 per cent to $1.794 million, and as a percentage of revenues they jumped from 95.9 per cent the year before to 97.1 per cent.

Salaries and benefits jumped by $1.069 million or 5.9 per cent, with the difficulty in recruiting staff for specialist areas resulting in higher overtime. The medical supplies bill grew by $501,406 or 8 per cent.