By NEIL HARTNELL
Tribune Business Editor
Doctors Hospital shareholders were last night told to anticipate a dividend policy change in 12-15 months’ time as the BISX-listed healthcare provider unveiled a near-$5m investment from a premier Cayman provider.
Dennis Deveaux, its chief financial officer, told Tribune Business that Health City Cayman Islands’ acquisition of 500,000 shares comes at an “an important strategic inflexion point” in Doctors Hospital’s bid to make healthcare more affordable and accessible while, at the same time, cutting multi-million dollar bad debts that have built-up due to unpaid medical treatments.
Affirming that Health City’s investment will drive service expansion and a lowering of costs, as well as greater collaboration that will see more Bahamians sent to the Cayman Islands for treatments Doctors Hospital does not provide, he added that exploiting synergies and driving economies of scale will be a key focus.
And, as Doctors Hospital starts to “descend” from the rapid expansion and growth mode that it has been on post-COVID, Mr Deveaux signalled to this newspaper that investors can look forward to more consistent dividend payments as cash flow and profits stabilise.
He added that Doctors Hospital had issued 500,000 additional new ordinary shares to facilitate the Health City deal, with the purchase price of $4.99m equating to $9.98 per share. That represents a discount of just over 5 percent to the $10.49 price at which the healthcare provider’s stock closed on the Bahamas International Securities Exchange (BISX) on Friday.
Mr Deveaux said the deal was structured to that Doctors Hospital deepened its relationship with a leading healthcare provider without unduly diluting the holdings of existing shareholders. “The question was how do we put together a deal that doesn’t dilute existing shareholders but brings in a world class partner with significant value to add to Doctors Hospital and, by extension, healthcare delivery in The Bahamas,” he added.
“We have now got to get busy going after synergy opportunities with them that, ultimately, can expand service offerings. Bahamians can get the healthcare they require that they have to go into the US for. We want this to be a viable option that is seamless to access through better co-ordination from Doctors Hospital and through Health City; the same high quality care but at a fraction of the cost.”
Mr Deveaux had foreshadowed the Health City investment and tie-up at last week’s Grand Bahama Business Outlook conference where he pledged that Doctors Hospital will “work aggressively” to direct Bahamians to lower cost, equivalent-quality care in the Cayman Islands as an alternative to higher costs in the US.
“We have to look consistently at where national capacity is reached. We have to look at two things: High quality care and value for money… The US continues to be a very high quality market for that but it continues to be very high cost and we are going to work aggressively to steer Bahamians that are receiving care beyond what we can provide to our relationship with Health City in Cayman,” he said then.
Healthcare affordability, and insurance coverage, has become a growing concern for many Bahamians due to ever-escalating costs. Doctors Hospital in its 2024 financials warned of “a material headwind” to profitability after it was forced to more than triple provisions to cover medical bill non-payment by government patients and insurers to $12.7m.
The BISX-listed healthcare provider disclosed that allowances for unpaid medical bills had jumped almost 263 percent year-over-year, compared to the prior year’s total $3.5m patient provisions, for the 12 months to end-January 2024. As a result, Mr Deveaux last night said Doctors Hospital has reached “quite an important strategic inflexion point for us to get it right” in balancing affordable care with cutting “bad debt”.
As for the $4.99m proceeds from Health City’s investment, he added: “We haven’t earmarked it for a specific project but it will most likely go in the area of surgical services, which is an area of Health City’s considerable strength. We are probably looking at surgical capacity, and the surgical capacity we have nationally.
“It will most likely be in the area of surgical services. It will definitely not go into working capital. We’ll probably put it into a 90-day investment vehicle and revolve it until we need to deploy it.” Mr Deveaux said Health City’s intent will be to help Doctors Hospital grow and be more profitable via its investment, as he added: “You do that by adding new service lines or lowering costs.
“That’s what is going to result for Bahamians. More service offerings and lower costs, whether for self-pay patients or lower costs hitting insurance premiums.” And he urged shareholders to be patient with Doctors Hospital just a little longer.
“We are coming out of this rapid growth mode,” Mr Deveaux told Tribune Business. “As we start to descend and get into a more normal state of operations, we will start to look at a dividend policy change. Shareholders should pay attention to changes with respect to the dividend policy as cash flows and net income stabilise.
“We have probably got 12-15 months of growth to go through, and then will look at stable dividends. That will be the priority. Bahamians are familiar with Health City but maybe as second choice. If the US is not viable it really ought to put us right up there as the primary consideration so we will try to make it a little more seamless.” Health City’s acquisition of its Doctors Hospital equity stake took effect on February 12, 2025.
“This relationship with Dr Devi Shetty, renowned cardiac surgeon and chairman of the Narayana Health network, Health City’s parent company, has grown significantly in recent years through his excellent team at Health City” said Dr Charles Diggiss, Doctors Hospital’s president and chief executive, in a statement.
“Health City is a ‘gold standard’ partner that recognises the ‘best-in-class’ value of our Doctors Hospital brand. We are honoured by this vote of confidence from such a remarkable Caribbean healthcare organisation. Through this relationship, we are already benefiting from improved economies and better purchasing costs, which will contribute to the enhanced affordability of our main hospital services in Nassau.
“As a dedicated partner, Health City has now formally aligned its vision with that of Doctors Hospital Health System (DHHS), enabling the mutual success of both organisations across the region. Most importantly, this partnership provides patients in and from The Bahamas with referral access to advanced, extended and more affordable healthcare services at Health City in the Cayman Islands.”
“Health City Cayman Islands is committed to becoming a vital solution for those in the Caribbean seeking high-quality tertiary specialist care at an affordable cost. This partnership with Doctors Hospital Health System not only enhances our ability to serve the Bahamian community but also empowers Doctors Hospital to advance its mission for the future,” said Dr Binoy Chattuparambil, clinical director and Shomari Scott, chief business officer, at Health City Cayman Islands.
Together, we are paving the way for improved healthcare access and exceptional patient care across the region.” Mr Deveaux added: “The relationship with Health City should lead to lower purchasing cost for Doctors Hospital, as broad economies of scale are leveraged.
“This will be felt by patients who will see more affordable price points for private healthcare services when they show up at a Doctors Hospital clinic or emergency room. Further, where certain critical services are not available on island, Health City will present as a more affordable destination for Bahamian patients looking to access care regionally.” KPMG Cayman Islands advised Health City on the transaction.
