The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Doctors Hospital has revealed that in-patient revenues at its Blake Road facility near-quadrupled during its 2024 first quarter due to the deal to treat public healthcare patients there.

The BISX-listed healthcare provider, unveiling its results for the three months to end-April 2023 and half-year, gave an insight into how lucrative the agreement with the Government and Public Hospitals Authority (PHA) was as that revenue line for Doctors Hospital West jumped by 265 percent year-over-year.

Felix Stubbs, Doctors Hospital’s chairman, writing in his first quarter report to shareholders, said: “The impact of the agreement with the Government of The Bahamas to treat patients at Doctors Hospital West increased patient days to 1,455 for the first quarter this year compared to 67 patient days in the first quarter last year.

“Net patient service revenue for Doctors Hospital West was $3.081m in the first quarter this year compared to $843,312 in the first quarter last year.” Given that the PHA and Princess Margaret Hospital (PMH) are almost entirely financed by the Bahamian taxpayer, this increase effectively represents a transfer from the public purse to a private healthcare provider.

Dr Michael Darville, minister of health and wellness, in announcing the deal to transfer PMH patients to Doctors Hospital West last December said it was estimated to last 14 weeks and cost between $2m and $2.5m. However, consultant physicians at PMH voiced unhappiness with the plan to “outsource” care to Doctors Hospital due to ward closures and renovations at the public hospital.

They alleged that there was no justification for the plan, and wrote: “The more appropriate stewardship of public funds is to fix and maintain the Princess Margaret Hospital’s current infrastructure as present circumstances can allow.”

The consultants said 121 beds were out of commission at PMH across seven wards, some for several years. “It is appropriate to fix the existing seven wards and bring them back into commission, and to invest in the public hospital system currently and going forward, rather than continuing a costly care model that does not build the public hospital capacity in any way,” the doctors wrote.

However, Dr Darville argued that some “extensive renovations” at PMH were planned that could not take place with patients on the ward. Meanwhile, Mr Stubbs told Doctors Hospital shareholders that neg t profits for the half-year to end-July 2023 had risen year-over-year by 77.6 percent to $6.687m as opposed to $3.765m for the same period in 2022.

“Consolidated net patient services revenue increased $11.938m or 25.57 percent over the second quarter last year. The surge in revenue is indicative of the continuing rebounding of outpatient activity combined with a decline in inpatient days,” Mr Stubbs wrote.

“Total inpatient days for the six months ended July 31, 2023, were 4,596 days, a decrease of 13.8 percent for the comparable period last year. While inpatient days for Doctors Hospital (Bahamas) declined, revenue from outpatient services rose by $6.233m to $36.144m for the six months ended July 31, 2023. Also of note is the significant decline in COVID-19 revenues totaling $3.873m, a 97.8 percent drop for the comparable period last year.”

Turning to expenses, Mr Stubbs added: “Consolidated expenses increased by $9.371m or 20.67 percent over the comparable period last year.” The dollar figure included a $3.2m or 413 percent rise in bad debt expense as Doctors Hospital “increased its loss rates on its portfolio of receivables at the end of fiscal year 2023”.

Salaries and benefits also surged by $3.9m, or 20.1 percent, as Doctors Hospital expanded its workforce by 117 staff to cope with its expansion into outpatient care. This also resulted in a $1.6m or 33 percent rise in medical services costs.

“There have been declines in other variable expenses, primarily medical supplies ($2m or 34.2 percent). The decrease in this expense is a result of adjustments made to medical supplies inventory during this fiscal year, combined with the increased utilisation of supplies due to the additional outpatient locations.

“Return on sales (net income margin) increased to 10.9 percent for the six months ended July 31, 2023, an increase of 77.6 percent compared to the same period last year of 7.7 percent, reflecting an improvement in efficiency.”

Costs associated with outside services increased by $1.1m or 26.9 percent during the 2024 first half to end-July 2023 as Doctors Hospital “incurred consulting services’ fees of $2m relating to the launch of our new software at the beginning of the fiscal year, which is a non-recurring expense”.