Patientline hits trouble as losses grow

Patientline, the hospital entertainment and phone provider, has announced that it is in urgent talks with its banks to renegotiate its debt payments so that it can invest in new technology and cut the prices it charges.

The company has posted growing full-year losses together with reduced revenues. Half-year revenues shrunk from £25.1m in 2006, down from £26.4m in 2005. Patientline recorded a loss of more than £30m during the past year compared to a £24m loss the year before.

Patientline is currently paying back around £8m a year to its banks, after building up debts of more than £80m rolling out its bedside terminals to 157 hospitals.

The company has been hit by the increasing usage of mobile phones in hospitals and come under intense criticism over the cost to patients of using the bedside phone and television systems it provides. Patientline says it urgently needs to conclude negotiations with the Department of Health on new pricing arrangements, together with new potential uses for its bedside terminals – such as providing a means for allowing information to be shared.

Geoff White, who has succeeded former prisons boss Derek Lewis as chairman of the company, said his main priority over the coming weeks would be restructuring that debt. In addition the group has sold off its Dutch and US businesses and says it is in negotiations regarding its continental Europe operations.

White said in a statement: "The most important issue facing the business is the discussions with the Department of Health about reducing call charges. It is disappointing that these discussions have taken much longer to resolve than expected. Patientline has long wanted to reduce telephone call charges; we’re making every effort to resolve this difficult issue as soon as possible for the benefit of patients and stakeholders."

Charges for incoming calls currently account for about 50% of Patientline’s revenues. It costs 26p a minute to dial out of the hospital and around 49p to call into the terminal. The company has been the subject of an investigation by the regulator Ofcom over its tariff policy.

Possible extended uses of the Patientline bedside terminals include providing accessing patient records and results. Last July the House of Commons Health Select Committee said: "It is an utter waste of these units, which could significantly contribute to transfer of information within hospitals, to be used as little more that glorified telephones and televisions."

In addition to its other problems Patientline has also been hit by hospital ward closures. "Ward closures alone, based on our site information, have reduced income by an estimated £50,000 per week compared to last year."