Patientline results prompt share meltdown
Debt restructure ahead
Patientline saw its share price nearly halve today after it released prelimary financial results for 2007.
Shares fell over 40 per cent to 2.07p after opening at 4.10p.
Results for the year were disappointing and the company warned restructuring its debt burden was the number one priority for the year ahead.
For the year ended 30 March 2007 Patientline made revenues of £43m, down from £47.8m in 2006. The operating loss before exceptional items was £7.2m, up from £3.7m in 2006.
It has closed its Dutch and North American businesses. The company has already reduced debt by 10 per cent to £80.2m but said: "even this figure is too high to be sustainable."
Patientline is talking to its banks, notably Royal Bank of Scotland, about sorting this out and hopes to make proposals to shareholders shortly.
The company rents out tellies and phones to hospital patients. Depsite criticism of its high charges the company increased per minute charges for outgoing calls to 26p from 10p in April. The cost of receiving an incoming call is 39p per minute offpeak and 49p at peak-time. Patientline was investigated by the Department of Health but cleared of doing anything wrong.
Revenue per terminal per day fell 6.4 per cent to £1.62, this figure has been falling for the last three years. The company blames deflation in telecoms charges, reduced treatment times and more use of mobile phones for the fall. The statement further noted: "The NHS ethos is antipathetic to the very idea of patients being charged for anything in hospital." Revenues have been further hit by "The failure by Trusts to generally adopt Electronic Patient Records...".
The full financial results are available here, as a pdf., here.
A flawed proposition
The entire project was flawed from the outset and based on a sense of corporate greed. That, and the fact that Government should not allowed near any kind of financial project - as they have a glowing record of failure stacked upon failure, especially in the NHS it would seem.
In the modern NHS the Patient and their family are ripped off from the point of entry. Car Parking charges at rural hospitals are an offence against decency. Those with chronically ill family often have to spend huge amounts just to visit. Public transport to those rural hospitals often wholly inadequate in every sense.
I had a period in hospital at the beginning of 2006 and sampled Patientline for myself. The next day I ordered in my mobile phone and charger and used it during the remainder of my 10-day stay. Now the NHS trust in my area has published guidance allowing the use of mobile phones within the wards - explaining that the supposed risk to equipment no longer exists (it never did!).
Patientline could have been a good thing for the patients - but for [possibly] all the good financial and corporate reasons it is an entire rip-off, and is seen as such. They can raise their prices all they like - but it will only hasten their demise. And I, for one, would like to see a return to the reasonable approach to providing TV in the wards.
My only fear at the inevitable Patientline collapse is that the NHS trusts may decide to take the service in-house. That would be a dreadful waste of NHS money even if it is then "free" at the point of use!
Who is at fault??
Whilst it's understandable that Patientline are taking a great deal of flack for the high prices they charge for this 'service', is it really fair that all the votriolic abuse is aimed only at them.
As a previous posted noted, the trusts (no doubt with government knowledge and probable agreement), outsourced the huge cost of providing an up to date (and I appreciate that this is relative) TV, Phone and Internet service to the bedside. They did this, in all probability, with full knowledge of the investment that would be required and therefore the cost that users would be required to pay in order to use the service.
From a commercial perspetive, it is highly likely that investing in a larger number of hospital infrastructure upgrades together rather than waiting for each to pay for itself would have reduced the original installation costs and would have seemed, initially of course, the more viable option.
Perhaps the trusts should have paid for a service in the first place but they didn't, perhaps the trusts should subsidise the usage cost but they don't. Perhaps Patientline's management board should have done their sums from day one and realised that it was never going to be accepted by users as a favourable payment model but they didn't.
The point I make is that Patientline went to the trusts with a business plan - albeit a flawed one. They saw and opportunity to make money and the trusts saw an opportunity to deliver a service without paying for it i.e. passing the burden to the user. I notice the trusts that approved the plans are quite happy to sit back and blame Patientline just as we are.
Free at point of use.....
Does not mean free. Based on my current p60 and for a 40 year working life I'll have paid £150,000, ($285,000) in compulsory national insurance contributions.