The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Doctors Hospital has revealed the termination of 43 workers after aggressive cost-cutting measures proved insufficient to offset "diminished patient activity".

The BISX-listed healthcare provider, in a statement issued at the weekend, warned that it was "navigating some very blunt fiscal realities" created by the COVID-19 pandemic as it confirmed the eight percent reduction of its 535-strong full-time workforce.

The job cuts come despite Doctors Hospital saying it had managed to reduce non-patient care operating expenses by "as much as 46 percent", and the voluntary 25 percent salary reduction taken by senior management and executives, as it seeks to adjust its operating model to the new post-COVID-19 reality.

"We are delicately navigating some very blunt fiscal realities brought on by COVID19," said Dennis Deveaux, Doctors Hospital's chief financial officer, in a statement.

"We must ensure the hospital retains its existing financial strength and is poised to make future investments necessary to expand service lines and improve patient care. It is therefore clear that we must be proactive and align our cost structure to match patient levels."

Charles Sealy, Doctors Hospital's chief executive, added: "This is not a decision that we make lightly, nor is it one that we make without tremendous consideration and thought. Throughout the course of the pandemic, Doctors Hospital has considered multiple options to mitigate the need for such an action."

The BISX-listed healthcare provider added that it had maintained "a three-month commitment" covering the period April to June 2020, when the COVID-19 health and economic crisis was at its peak, not to lay-off, furlough or implement any salary/benefit cuts impacting its staff members. However, that period has now expired.

Mr Sealy acknowledged receipt of a series of Tribune Business questions yesterday afternoon, but did not reply before press time last night. Doctors Hospital's official statement made no mention of which worker categories were affected, if the terminations included front-line healthcare positions such as nurses, and if Bahamians as well as expatriates were impacted.

John Pinder, director of labour, told this newspaper he would "be more than surprised" if any healthcare positions were impacted given the ongoing threat posed by COVID-19.

Confirming that Doctors Hospital had notified the Government about the terminations, he added that The Bahamas was already suffering from a shortage of trained medical personnel, and suggested the terminations were more likely to have affected administrative and other support staff.

Mr Pinder also suggested that terminations elsewhere in the private sector, with the national unemployment rate thought to be heading towards at least 40 percent, would reduce demand for Doctors Hospital's services as newly-jobless persons would likely lose their employer-sponsored health coverage.

"I would like to see the categories of workers let go," he said, adding that he was not yet privy to such information. "They shouldn't be nurses and laboratory technicians. Those on that are probably not healthcare providers.

"I would be more than surprised if it was healthcare providers. We lack nurses, lab technicians and radiologists. I don't think it will be anybody like that. But you have to bear in mind that people not working may be losing their healthcare coverage and cannot go to Doctors Hospital any more. That also may have played a role in the decision they have made."

The move by Doctors Hospital is a further indication of how widespread the fall-out from the COVID-19 crisis is likely to be, with no sector of the economy spared from business closures, terminations and downsizing. Underemployment, through reduced work weeks, and income loss via salary cuts will also become major problems.

However, the BISX-listed healthcare provider's actions are likely to catch many Bahamians off-guard given that it is an "essential service" that should be in high demand given the critical role it played - and continues to play - in fighting the pandemic and treating patients.

Doctors Hospital's move comes following a 2021 first quarter in which profits fell by 16.4 percent or $351,917 year-over-year, dropping from $2.143m in the three months to end-April 2019 to $1.791m.

With total expenses essentially remaining flat, the decline was driven largely by the near-$500,000 fall in net patient service revenues, which came in at $15.568m. The BISX-listed healthcare provider suspended a number of non-COVID treatments during that period, including those for outpatients, which were suspended in March.

As a result, its patient-related top-line shrank, with outpatient services expected to only resume in phases from last month. The 43 terminations indicate that Doctors Hospital see no improvement in this situation any time soon.

Still, the lay-offs have occurred less than one month after Doctors Hospital released an annual report in which it hailed a "second consecutive year of record" financial results during the 12 months to end-January 2020.

The medical services provider said the $6m net profit generated for the period represented a 48.7 percent increase upon the previous year's bottom line, which was itself 68 percent ahead of the prior year.

As a result, BISX-listed Doctors has seen its net income more than double in just two years prior to the COVID-19 pandemic, growing by 149.9 percent compared to the $2.405m profit generated during its 2018 financial year.

And Doctors Hospital's weekend statement said "dividend expectations" for the current fiscal year were unchanged despite both the pandemic and the lay-offs, with the first capital return to shareholders set to happen this month.

The terminations also come ahead of the healthcare provider's roll-out of its same-day COVID-19 testing results service, which it says can administer 400 tests per day, and is designed to create a new revenue stream for the company.

"The next quarter will involve a roll-out of several new strategies resulting in enhanced revenue development," said Mr Sealy. "In our effort to maintain a safe hospital environment we have recently implemented advanced capacity for COVID-19 PCR testing.

"Anticipating the pressure on businesses to assure a safe environment for their clients and employees, Doctors Hospital's provision of COVID-19 PCR testing and same-day results will have special value since the threat of COVID19 is likely with us for a while."

He added: "We are keenly sensitive to the impact that this decision to release 43 associates now will have on all of our workforce. As a result, our human resource team has organised a menu of services, support and opportunities for all affected."

Doctors Hospital said all those released will have their health insurance continued through September, in addition to receiving due severance payments.

Support includes opportunities to join a resource pool to potentially work in a part-time capacity, direct access to the company's employee assistance programme, and resume writing and an interview skills workshop.