the second opinion medical legal services
the second opinion medical legal services


Forensic Medical Investigator

The SECOND OPINION® Medical-Legal Consultants Group Inc. can assist Investment and Corporate Bankers in their due diligence in regards to health care, biotechnology, and pharmaceutical investments. In the same way that one would use a Forensic Accountant to investigate a company's finances, one would use a Forensic Medical Investigator to investigate the way in which a medical company conducts business.

The SECOND OPINION® Medical-Legal Consultants Group Inc. performs all of the services listed below:

  • We analyze the viability of a service or product by looking at the potential market for it, i.e. the total afflicted population, the percentage of the population which would conceivably seek out such a product or service, and the total annual/lifetime gross revenues that a company could reasonably expect to generate from this client base.
  • We analyze the supply and demand of a service or product by looking at the effect of factors which are beyond the control of a company and which could potentially erode bottom line profit. We would determine a company's present market share, how it is changing and why. We would identify competitors and how their products or services compare. We would look at what a company and competitors are doing, or should be doing, to increase their market share.
  • We ensure that predictions made by a company in regards to future growth are not based on false assumptions or misleading premises, by ensuring that each factor taken into consideration by it in the overall growth equation was properly assessed. We would confirm that no present factors are poised to significantly change in the near future due to circumstances which a company either is not aware of, or has buried to make it appear to be a sounder investment than it really is. Often such adverse factors are known by a company several months, if not years in advance, giving them plenty of time to raise naive venture capital, then cash out of a dying venture.
  • We research any changes in government legislation, trade tariffs, or immigration policy which will adversely affect a company's ability to carry on business, such as the evoking of reduced fee caps for professionals or the delisting of certain procedures from fee guides.
  • We confirm that there are no shortages of skilled labour within a company’s operating venues in order to ensure that future expansion is not hindered by an inability to find the professionals necessary to dispense a specific product or service, i.e. what is the point of having a massive demand for laser eye surgery if there are insufficient numbers of Ophthalmologists being licensed to administer the procedure?
  • We research how changes in insurance or tax credit eligibility would alter the demand for certain medical products or services.
  • We audit both the origin of and the satisfaction of a company’s clients by contacting both their clients and the practitioners who referred them to the company. We would ensure that clients are not being referred merely because of artificially created, short-term factors, such as illegal “cash” kickbacks or other incentives being paid out to referring practitioners, or directly to patients. Such costs will not appear on a company’s balance sheet, but will be “realized” either when a company is investigated by professional regulatory bodies, or shortly after a company goes public and the principals have less direct incentive to continue paying out such kickbacks from their own pockets.
  • If necessary, we would have undercover Medical Investigators pose as patients to test the delivery system of a company. Such an investigation would allow an investor to test the overall functionality of a company, from intake to discharge.
  • We ensure that a company is not involved in any fraudulent billing practices by analyzing billing patterns. Such illegal billing practices could go undetected for literally years before the authorities become involved, such as was the case with a certain HMO in The United States.
  • We conduct background checks of a company’s principals, directors, and higher-ranking officers to ensure they do not have a derogatory vocational history with companies or professions that they were associated with in the past. We would confirm that none of a company’s suppliers are owned either directly or indirectly by a company’s major shareholders, thereby creating a conflict of interest situation which could result in the costs of such supplies being artificially inflated after a company is infused with public money or other forms of capital.
  • In every jurisdiction where a company operates we would contact professional licensing bodies, and industry-run crime prevention entities, such as The Insurance Crime Prevention Bureau of Canada, both to ensure membership of a company’s service providers, and to ensure that they are not under investigation for fraud.
  • We compare the cost structure of your prospective investment with that of competitors to ensure that it has not been priced out of the market. We would ensure that both fees being billed to clients and salaries being paid to staff are in keeping with industry guidelines. We would look for buried expenses or liabilities, and inflated revenues or assets. We would contact competitors to see how flexible their cost structure is in comparison to that of your prospective investment, in order to ensure that if a price war does ensue, your company either has sufficient profit margin already in place or such margin can be quickly realized through cost reductions, to allow it to effectively compete in the marketplace.
  • We conduct an in-depth risk analysis of a company to ensure that medical-legal liability is properly insured. If it were operating in a country outside of North America, we would confirm that there are no local statutes or customs that could adversely affect the way in which a company carries on business.
  • If necessary, and in the same way that we assist malpractice lawyers and insurance adjusters, we will retain a world-renowned expert in the field of expertise in which the company is operating in order to assist us in determining the viability of a company’s product or service. The expert would help set investigative parameters for our Forensic Medical Investigator in order to keep him focused on the key clinical issues that will either make or break a company.
  • We look for potential patent or copyright infringements to ensure that the product or service being brought to market is indeed unique. In the case of biotechnology or pharmaceutical companies, we would conduct a detailed search for evidence that the product or service may have already been attempted in some other part of the world and failed, or that other companies are further ahead in the development of the same, similar, or better product or service.
  • We conduct Keyman Medical Investigations and Pre-Appointment Director Medicals to confirm that the decision-makers within a corporation who are crucial to shareholder value are not prone to falling physically or psychologically ill. Our team of Medical Investigators and Medical Specialists will conduct a thorough Background Medical Investigation for buried past medical history; multiple complete specialist-specific physical assessments; an age/risk-specific battery of diagnostic tests; a full psychological assessment (including all necessary testing, i.e. MMPI, IQ, EQ, etc.); and an addiction risk assessment. Our investigations are far more detailed than those conducted by any other medical facility or company which underwrites Keyman Insurance, because of the investigative component which we include with every assessment (i.e. previous medical problems can never be hidden from OUR assessors).

The SECOND OPINION® Medical-Legal Consultants Group Inc.’s keen insight and extensive experience in the areas of medical fraud and manipulation make it a natural ally to any Corporate Underwriter, Analyst, or Lender. For example, in an article published by Canadian Underwriter Magazine in February 1997, based on his vast knowledge as a Forensic Medical Investigator, DR. JAMES. N. SEARS predicted that Ontario’s new automobile insurance legislation, Bill 59, would wreak havoc on what many thought was a financially strong rehabilitation cash cow (margins appeared to be in the 100% range and the major banks were extending huge lines of credit to these facilities without question). He predicted that “30-40% of rehabilitation facilities in the Greater Toronto Area will shut down because of their inability to cope with the change”. Sure enough, about 40% of such clinics did shut their doors!

What did we know that the government, professional licensing bodies, professional associations, insurance analysts, and big banks did not? We knew that the cash kickbacks being demanded by medical doctors were steadily rising due to the fact that the Province of Ontario had lowered doctors’ billing caps and increased the clawbacks on their fees. Furthermore, laboratories which were primarily responsible for subsidizing doctors’ office rents and other expenses were no longer doing so because their professional licensing body began to come down hard on them due to conflict of interest guidelines and because they were cash-strapped from also being capped. Subsequently, wanting to replace income lost from the laboratories, doctors began playing “hard to get” with rehabilitation facilities, having them bid on their business with ever-increasing cash kickbacks, thereby eroding the rehabilitation facilities’ profit margins.

Even though the changes contained in Bill 59 reduced patient volumes by only about 30%, actual profit margins (based on the need to pay out huge cash kickbacks) were between 30 and 50% (not 100%). Therefore, margins were squeezed and the “ethnic crime groups” which ran the rehabilitation centres in Ontario started vying for pieces of an ever-shrinking rehabilitation pie--and many starved. Some others, starving as we speak, are now actively scouring the markets for whatever naive venture capital they can lay their hands on!

The above example could also be applied to large scale factors affecting a company’s profitability, be they local, national, or international. It makes sense to retain the ONLY Forensic Medical Investigation company in Canada to work directly with your Analysts, Underwriters, and Lenders, for the purposes of ensuring that the health care, biotechnology, or pharmaceutical companies you are investing in are legitimate, and possess the tools necessary to compete effectively in the marketplace. You will not only drastically reduce your exposure in regards to any future embarrassments from the standpoint of investment success, but you will also help to prevent any future law suits against you in regards to having recommended a bogus investment to your clients.

The SECOND OPINION® Medical-Legal Consultants Group Inc. investigates medical companies on a daily basis for insurers, lawyers, and corporations. We have been directly involved in the closure of dozens of bogus ventures in Canada. We often uncover fraudulent activity previously unknown to authorities. We understand the terrain, and we will guide your underwriters, analysts, and lenders around the pitfalls well-known only to us, so as to completely satisfy the requirements of their due diligence, and to ensure that every investment made by your institution which is given a passing grade by us, is both legitimate and has a decent chance of succeeding in a very competitive corporate environment.

The Second Opinion®Medical-Legal Consultants Group Inc.
Phone: 416.488.6142   ·   Fax: 416.322.9948
email Dr. James N. Sears