Patientline, the supplier of bedside phones and entertainment for patients, has reported a 39% increase in pre-tax losses, due partly to an Ofcom investigation into its NHS contracts and incoming call charges.

In addition, chairman, Derek Lewis, reports: “The financial stresses within the NHS and the delays in implementation of the major IT programme, Connecting for Health, have meant that progress in generating new revenues from hospitals has been slow.”

Ofcom, the independent telecoms and broadcasting regulator, announced its enquiry into Patientline and another hospital provider, Premier Managed Payphones, in July this year. Patientline immediately suspended new installations of its system in hospitals.

Lewis says: “Patientline has co-operated fully with Ofcom and this investigation and remains confident that the company’s actions will be vindicated. Nevertheless, the effect on a small company has been disproportionate, including the accompanying negative publicity, the suspension of new investment, a sharp drop in the share price and the requirement to renegotiate banking facilities.

“It is particularly frustrating as Patientline was already in discussions with the Department of Health about accelerating use of these world-leading systems by hospitals to enable a reduction in the share of the costs borne by patients and their family and friends.”

Last June, before the Ofcom investigation was announced, Patientline also drew attention to the adverse effects of ward closures, lower bed occupancy and changes in patient mix in NHS hospitals and yesterday’s announcement says these influences have continued.

“[These influences] have been aggravated by a temporary deterioration in the usage of our systems because of staffing shortages, repair and software issues, as well as negative publicity and some increase in mobile usage outside the ward areas,” says the chairman.

There is some good news for the company, however. Patientline reports IT access at the bedside is now fully rolled out at the Chelsea and Westminster Hospital, London, and a second hospital, in Hartlepool, Teesside, has gone live with menu display and meal ordering from the bedside.

International trading is reported to be making excellent progress with revenues up by 12% in Holland and the company’s first revenues being recorded in the US.

Ofcom told E-Health Insider that the results of its investigation were expected in January 2006. A spokesperson said the Competition Act 1998 allows Ofcom six months to come to preliminary conclusions about a case. In the case of Patientline, this period expires at the end of January.

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