Stamford Medical Ltd (SML) operates two private hospitals in central Singapore and a network of multidisciplinary regional

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Stamford Medical Ltd (SML) operates two private hospitals in central Singapore and a network of multidisciplinary regional clinics.

The hospitals are located in the Newton and Tanglin areas. At each hospital, SML has set up

specialist clinics in areas such as Obstetrics & Gynaecology, Paediatrics, Cardiology, Orthopaedics, and Ear, Nose &Throat;
an Accident &Emergency department;
single- and double-bedded wards and suites.

The multidisciplinary regional clinics are located in Jurong, Woodlands, Tampines, and Raffles Place, and offer Family Medicine as well as outpatient services in the same specialist services as the hospitals.

The company has been operating profitably for over 15 years, with patient volumes increasing at double-digit rates year on year. SML has been listed on the Singapore Exchange (SGX) for the last 10 years. The financial year-end is December 31.

Company strategy and development

Besides local patients, SML has been successful in drawing international patients from more than fifty countries in the region and worldwide. In the last two years, there has been a significant increase in patient admissions from Vietnam, Papua New Guinea and Russia, mainly through strong patient referral networks.

On the local scene, birth rates in Singapore have been declining for over the past decade. Thus in 20x8 the SML Board decided to downsize the paediatrics practice at the two hospitals, and build up wellness services focusing on dental services and aesthetics.

In June 20x9, the company began to implement this strategy by setting up new dentistry clinics at the hospitals and recruiting six new specialists in dentistry. At the same time, two of the pediatrics specialists left the company practice. The dentistry clinics were fully operational by December 20x9.

DermaClear acquisition

In 20x9, SML also made an offer to acquire a 60% stake in DermaClear, an existing chain of three exclusive aesthetics clinics. This acquisition will be completed in June 20y0, using a combination of new shares and cash.

SML is planning to augment DermaClear’s existing equipment and range of services. The company has placed an order for two units of the latest laser equipment and reached an agreement to develop an in-house skincare range in conjunction with a respected research laboratory in South Korea.

The purchase consideration formula for SML’s 60% stake in DermaClear factors in the chain’s results for the three years after the completion of the transaction, that is to June 20y3. One of the conditions of the deal is that the results of the chain for the three-year period will continue to be audited by DermaClear’s existing auditor, a local firm called Lim & Partners.

Patient databases, health records, and billing

SML maintains two patient databases: a Hospital Database for hospital patients, and a Clinic Database for patients at the four regional clinics. Doctors at any of the regional clinics can access the Clinic Database, but not the Hospital Database.

Both the Hospital and Clinic Databases can be accessed from any of the specialist clinics, wards, and A&E departments at both hospitals. Within the specialist clinics and wards, the desktop computers in each doctor’s office enable doctors to read, change and add data to the patients’ files. The computers at the nurses’ stations within the wards and clinics can only read patient data.

In both the regional and specialist clinics, folders are given to each outpatient when they register. During the patient’s visit, every service provided (such as X-rays, scans, and blood tests) and medications provided are scanned into the patient’s health records as they are dispensed. At the end of the visit, the records are summarised for billing purposes and posted automatically to SML’s accounting system.

In the wards, the patient health records are updated twice a day by nurses. Each day’s services and medications are automatically summarised and posted to the accounting system overnight.

Pending company issues

In 20x7, the SML Board authorized a $2 million loan to a healthcare company set up in Taiwan and operated by the daughter of SML’s Board chairman. The principal repayment date was set for March 20y0, but no interest rate was stipulated and interest has been not been charged or collected in the period since the disbursement of the funds. In January 20y0, the Taiwanese healthcare company went into liquidation.

As of December 20x9, SML has placed a 50% downpayment of $500,000 for the laser equipment ordered for the DermaClear clinics. The company has also committed to the expenditure of a maximum of $1 million for the development of its in-house skincare range.

Audit matters and related services

SML has been audited since its inception by EJS Associates, the largest local firm in Singapore, which is affiliated with a mid-tier international accounting network.

The SML Board has asked EJS to audit the existence and valuation of DermaClear’s PPE and inventory, which will be taken over by SML on completion of the acquisition in June 20y0.