The Tribune

• Hospital’s net income soars 130% to $28.67m

• And total revenues rise by 61% to over $128m

• Net profit margin on testing pegged at 39.5%

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Doctors Hospital has enjoyed a $58m revenue boost from COVID-19, it was revealed yesterday, helping to send net income soaring by 130 percent year-over-year for the 12 months to end-January 2022.

The BISX-listed healthcare provider, in its just-released annual report, disclosed that profits increased by more than $16m compared to its 2021 financial year due largely to revenues surging by some 61 percent. This was driven by COVID testing and care, as well as a partial rebound in its core emergency room and outpatient services.

With net income more than quadrupling in less than two years, growing from just over $6m in the 2020 financial year to $28.67m, Doctors Hospital saw its highest-ever return on sales (ROS) of 22.3 percent during its past financial year. However, very much aware that “the significant one-time revenue and earnings drivers related to COVID-19” is a one-off that is unlikely to repeat, the provider is eyeing several expansions to position itself to meet post-pandemic needs.

Besides the 30-bed Grand Bahama hospital, and clinics in Eight Mile Rock and Exuma, Doctors Hospital said it is creating a new specialist internal medicine group at premises on Dowdeswell Street on New Providence as well as adding two operating theatres at a new outpatient surgical centre in Centreville. COVID testing sites at Carmichael and Meldon/Palmdale, now that US and Bahamian entry restrictions have been relaxed, will be converted into medical access centres.

These developments come after Doctors Hospital earned a further $42.553m in COVID-related revenues during the 12 months to end-January 2022. These were split between $22.499m from COVID testing, both PCR and rapid antigen testing combined, and $20.054m in income related to the treatment of those hospitalised with the virus.

Total COVID-related revenues jumped almost three-fold year-over-year, rising from $15.479m the prior year to give Doctors Hospital just over $58m in top-line income over the two-year period since the pandemic hit in March 2020. By end-January 2022, more than 988,000 tests had been conducted over that timespan, while 6,398 patient days had been devoted to caring for the sick.

Year-over-year, COVID tests and associated revenue jumped by 780,943 and $14.752m, respectively, compared to financial year 2021’s 103,732 tests and $7.747m in revenue. For patient days, those by 1,752 and $12.322m year-over-year compared to 2,323 and $7.732m for the prior 12 months.

“At its peak, COVID-19 testing output reached 100,000 tests per month and involved the employment of over 275-plus associates. The group performed 884,675 COVID-19 tests in financial year 2022 associated with revenues of $22.5m,” Doctors Hospital said in its annual report.

“For the same period in the prior year, tests performed were 103,732 with $7.7m in attributable revenues. In addition to establishing price and quality leadership for both rapid antigen and RT-PCR testing, net profit margins for the service line were 39.5 percent, demonstrating the group’s efficiency in scaling to meet national demand.”

Doctors Hospital West on Blake Road was expanded to a 31-bed facility to cope with peak COVID infection levels, and the BISX-listed healthcare provider added: “Patients moved from the public healthcare system into Doctors Hospital based on acuity and capacity balancing, with the Government of The Bahamas as a guarantor for COVID-19 related care nationally for all uninsured Bahamians.

“Inpatient admissions and patient days at Doctors Hospital West for COVID-19 care grew by 76.1 percent to 4,075 in financial year 2022 compared to 2,323 in financial year 2021, corresponding with the uptick in activity [and] surging in the fall 2021 when bed occupancy approached 100 percent. Revenue associated with COVID-19 hospitalisation was $24m for financial year 2022 compared to $7.7m during the same period in the prior year.

“Total inpatient days across all facilities including non-COVID care were 13,644 in financial year 2022 compared to 15,716 in the prior year.” Doctors Hospital said demand for its traditional tertiary care services was still down compared to pre-COVID although this had recovered somewhat against levels recorded during its 2021 financial year.

“As COVID-19 related revenues grew exponentially, tied to higher rates of infection and hospitalisation nationally, the group noted an anticipated fall off in its non-COVID lines,” the annual report added. “Illustratively, emergency room visits rebounded marginally to 9,154 in financial year 2022 versus 8,066 in the previous year, but were still significantly off the pace [against] financial year 2020, which were 13,615.

“Similarly, outpatient imaging studies grew to 8,956 in financial year 2022 compared with 7,060 in the previous year, against a pre-COVID backdrop of 9,537.” When the dust had settled, total revenues had increased by more than $48.5m, jumping from $79.816m during the 12 months to end-January 2021 to $128.362m, while net income more than doubled from the prior year’s $12.439m to $28.671m.

Total expenses, meanwhile, rose by by 48 percent year-over-year from $67.377m to $99.691m. The biggest drivers of the $31m-plus increase were staff salaries and benefits, which jumped from $30.67m to $43.37m; medical supplies costs which almost doubled from $11.134m to $21.854m; and medical services which rose from $7.103m to $10.461m.

Part of the increase in salaries and benefits resulted from Doctors Hospital allowing its staff, which peaked at 935 during the period, to share in its financial success. “Profit sharing for associates involved an accrual of $2.9m in financial year 2022, which translated to 338.6 hours per eligible full-time associate compared with $1.3m in financial year 2021 or 195.1 hours per eligible full-time associate. Profit sharing was paid in cash in April 2022,” the annual report said.

“In addition to profit sharing, the group continued per hour ‘hazard premiums’ into fiscal year 2022 for associates directly involved with COVID-19 care. These costs were associated with an expense of $1.9m, an increase of $0.6m versus financial year 2021. 

“Given the surge in COVID-19 testing demand, related personnel costs were $3.4m in financial year 2022, an increase of $2.8m compared to the prior fiscal period. Personnel costs for associates working at Doctors Hospital West on Blake Road were $1.9m in financial year 2022, modestly higher compared to financial year 2021. Spending for incentives and associate award programmes grew to $0.4m in financial year 2022, a four-fold increase compared to 2021.”

Doctors Hospital also received a boost after end-January 2022 when “a third party payor”, which was not named, paid off the entire accounts receivable balance it owed and made a major dent in the collective $43.304m owed by insurers and others at the financial year close.

“Subsequent to the reporting date, a major third-party payor effectively liquidated a significant accounts receivable balance associated with an $18.8m conversion of accounts receivable to cash,” the annual report said.