FamGuard Corporation, the parent holding company of Family Guardian Insurance Company, announced this week that it has purchased the BahamaHealth Insurance Brokers and Benefit Consultants shares formerly held by Doctors Hospital PHO Limited (PHO). The PHO, an organization made up of physicians and the hospital, is a subsidiary of Doctors Hospital Health System Limited. Effective October 1, BahamaHealth became a wholly owned subsidiary of FamGuard.
BahamaHealth was formed in 1999 as a 50/50 joint venture between FamGuard and Doctors Hospital Health System and its PHO. The company was established to provide the marketing and administrative functions, with Family Guardian as the insurer. FamGuard's chairman, Norbert Boissiere, noted, "As a managed care provider, the fee arrangement allowed for the PHO to receive a premium for the health services and medical management they provided." Mr. Boissiere reported that the high cost of medical care has impacted the fee arrangement and this was a significant factor in the joint decision to restructure BahamaHealth with FamGuard assuming full ownership. "BahamaHealth continues the relationship between the insurance carrier and the healthcare providers who make the medical decision," said the chairman. FamGuard's subsidiary, Family Guardian, is responsible for the risk and underwriting of the BahamaHealth products and has assumed the claim reserves from the PHO.
Mr. Boissiere, who is also chairman of BahamaHealth, emphasized that the change in ownership has "no impact on BahamaHealth members whose coverage, benefits and premiums remain the same. " Regarding the BahamaHealth network of physicians and healthcare providers, he said, "We expect no change in our network; in fact, we anticipate our partners in healthcare increasing in numbers and specialities." Doctors Hospital Health System will continue to be a healthcare provider for BahamaHealth members have a wide choice of facilities and physicians in the Bahamas and abroad." Said Mr. Boissiere. "A key feature of BahamaHealth's plans is choice," said the chairman.
Dr. Kirtland Culmer and Dr. Charles Diggiss remain on the Board of Directors for BahamaHealth, with Dr. Culmer as Medical Director for the company. The Board also includes Cecile Greene, Ronal Shutley, Gerald Strachan, and Alan Mytty, who is BahamaHealth's CEO.
An independent valuation of BahamaHealth was performed which resulted in FamGuard purchasing the PHO's 50% ownership for a value of $2,384,000. This figure less the claim reserves of $1,884,000 assumed from the PHO resulted in a net payment of $500,000 in FamGuard shares. This transaction will result in a non-recurring charge to the FamGuard income statement for this year of $2,187,000 which is the value of the BahamaHealth shares purchased, net of book value.
"BahamaHealth is a leading provider of employer-sponsored products and with the new structure we are positioned for further growth. Earlier this year we relocated BahamaHealth to new premises at 3rd Terrace West, Centreville, that will allow for expansion, and we are now looking forward to offering additional services that will further enhance our group and individual products," said Mr. Boissiere.