Profit guarantee does not affect how docs treat patients: Isec
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The profit guarantee clause in Isec Healthcare's acquisition of four JL Medical clinics does not affect the way their doctors treat patients, the company said yesterday.
Isec was responding to questions posed by the Singapore Exchange on its 2019 results in relation to the profit guarantee, including a query on whether its acquisition of the clinics could influence, or be seen to influence, the doctors' professional judgment.
Isec reported the JL Medical group results in April, which noted a $63,431 shortfall in full-year profit after tax for one clinic, JL Medical (Sembawang).
Isec had acquired the clinics - in Bukit Batok, Sembawang, Woodlands and Yew Tee - in 2016 from sellers Lee Yeng Fen, Koo Xian Yeang and Ng Chiew Fang, who provided profit guarantees for five years, from 2017 to next year.
All three sellers are doctors. Dr Lee is the wife of Isec executive vice-chairman Lee Hung Ming, who is also a controlling shareholder of the firm.
The Catalist-listed firm said yesterday: "There is no inducement or pressure to interfere with the doctors' management of patients."
Isec said it had always emphasised to the doctors that patient interests should take priority, and clinical treatment should "never be clouded by any financial or monetary considerations".
It added that the sellers were also doctors and "are mindful to act ethically".
"When they entered into the sales and purchase agreement with the company, (the doctors) also reiterated... that patients' interests will always take precedence over any financial consideration," Isec said.
The sellers had also made a "profit top-up", as some of the acquired clinics did not meet the guarantee.
"This provides some indication that our doctors and staff are not under any pressure to meet the threshold for the profit guarantee."
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