By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

Doctors Hospital has taken impairment provisions for almost 31 percent of the $58m in unpaid medical bills owed to it by individual patients and third-party payers such as insurance companies and the Government.

The BISX-listed healthcare provider, in unveiling a $905,603 total comprehensive loss for the year to end-January 2025, also disclosed in its financial statements that provisions for expected credit losses - meaning medical bill arrears it expects to not collect - have increased by more than $5m or 41.9 percent year-over-year to just shy of $18m.

Of the $58m gross trade receivables due to Doctors Hospital, some $7.454m was owed by the Government at the January 31, 2025, year-end date. The latter figure, though, represented a more than $4.2m or 36.3 percent decrease compared to the $11.704m that was due from the Government at the close of the healthcare provider’s 2024 financial year.

Dennis Deveaux, Doctors Hospital’s chief financial officer, could not be reached for comment by Tribune Business via phone or message before press time last night, but the impairment provisions cut Doctors Hospital’s net trade receivables to just over $40m and represented a $2m decline on the prior year’s $42.041m.

Describing trade receivables as comprising sums owed by self-pay patients; patients who have received a settlement from their insurance companies; sums due directly from insurers; and from the Government, Doctors Hospital’s audited financial statements said: “Based on the modelling prepared by management, the expected credit losses on patient and third- party receivables as at January 31, 2025 is $17.967.”

This compared to $12.664m in 2024, and the healthcare provider added that the debts owed by the Government are viewed as low-risk in terms of its prospects for collection. “The group considers that any receivable balance that is more than 90 days past due is impaired,” Doctors Hospital added.

“Included in the trade receivables – third party payors are the amounts due from the Government of The Bahamas totalling $7.454m (2024: $11.705m), on which the group measures impairment losses using the general approach.

“The expected weighted-average credit loss rate for the balances due from the Government of The Bahamas is 0.57 percent as at January 31, 2025, (2024:1.25 percent). As at January 31, 2025, the provision for impairment losses amounted to $42,772 (2024: $127,267).”

Meanwhile, Doctors Hospital, which remains firmly in expansion mode and investing for anticipated future growth, suffered a $2.5m bottom line reversal with 2024’s $1.945m profit turning into a $905,603 loss. The audited financials disclose that the loss would have been greater, and exceeded $1m plus, had it not been for the BISX-listed healthcare provider’s April 2024 acquisition of The Kidney Centre.

The latte business generated a $574,093 profit on $6.794m worth of patient service revenues during the latter nine months of Doctors Hospital’s financial year. The latter’s financial statements reveal that the purchase price paid to acquire that business was $8.067m.

“On April 30, 2024, the group acquired 100 percent of the shares and voting interests of Kidney Centre Ltd (KCL) and, as a result, the group gained control of the subsidiary,” Doctors Hospital’s financial statements said.

“For the nine months ended January 31, 2025, KCL contributed revenue of $6.8m and profit of $574,093 to the group’s results. If the acquisition had occurred on February 1, 2024, management estimates that the [group’s] consolidated revenue would have been $123.465m and the consolidated net loss for the year would have been $714,239.

“In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on February 1, 2024,” it added.

“At the acquisition date, the group transferred cash consideration in the amount of $8.067m. The group incurred acquisition-related costs of $626,514 on legal fees and due diligence costs. These costs have been included as a part of the acquisition costs.” The $2.975m worth of ‘goodwill’ that Doctors Hospital booked from the Kidney Centre’s purchase was also subject to testing by its external auditors, KPMG.

Doctors Hospital, in its 2024 annual report, had warned that the rise in trade receivables was a “material headwind” to profitability after it was forced to then more than triple provisions to cover medical bill non-payment by government patients and insurers to $12.7m.

Warning shareholders then about its “rising exposure to uncompensated care and declining payer coverage [and] reimbursement”, Doctors Hospital management nevertheless confirmed it will never turn any patient in need of care away while pledging to work with the Government to address the challenges posed by uninsured persons who cannot afford to cover treatment costs themselves.

“Due to broad issues with inpatient capacity at the national level, and the spillover effects of those constraints as a driver of higher self-pay patients in New Providence, Doctors Hospital Health Systems (DHHS) saw its related provision for expected credit losses under IFRS (international financial reporting standard) nine grow to $11m versus $3m in the prior year,” the BISX-listed healthcare provider wrote.

“Notwithstanding these earnings challenges, the group continues to stand affirmatively in the gap, bridging bottlenecks in the public system and working collaboratively with the Government of The Bahamas to define long-term solutions to its capacity challenges for uninsured patients.” And the inability of the Government and public healthcare patients to cover their bills is not the only challenge.

“In addition to growing self-pay financial risk, the group saw increased exposure to declining reimbursement rates across large payers which also negatively impacted net income,” Doctors Hospital added in relation to sums due from Bahamian health insurers. “The provision against third-party accounts receivables balances increased to $1.7m in financial year 2024, up materially from $0.5m in the period prior.

“Decreased reimbursement exists when payers remit less than what is invoiced for services or when higher financial risk is transferred to members/groups in the form of higher out of pocket obligations - co-payments, deductibles - which are subsequently unmet.” This means more patients are unable to meet their share of treatment costs as insurers move to mitigate and reduce their own risk exposure.