| 13.6°C Dublin

Blackrock Clinic profits are hit by insurers and inflation

Close

The Blackrock Clinic

The Blackrock Clinic

The Blackrock Clinic

Pre-tax profits at the Blackrock Clinic fell 11pc to €11m last year.

Medical inflation and lower prices from private health insurers contributed to the dip.

New figures show that the clinic and subsidiaries incurred the decline in profits in spite of revenues remaining flat at €93.2m last year.

The hospital employs 677 and last year paid a dividend of €1.3m to its shareholders that include beef baron Larry Goodman.

Established in 1984, the hospital has generated consistently strong profits in recent years, generating pre-tax profits totalling €51m between 2010 and 2013.

According to the firm's directors' report, "in recent years, the hospital has experienced an increase in the number of privately insured patients, using its services".

However, the report added that "it has also experienced a significant reduction in prices from insurers and purchasers, which together with an increase in costs due to medical inflation, has eroded profit margins".

The directors state that the continued rise in medical inflation caused by an increase in demand for new technologies and the use of more expensive consumables and drugs "poses a significant challenge for the hospital".

The report states that a further major risk faced by the hospital is the state of the private health insurance market where there have been very significant increases in the cost of health insurance in recent years.

Over the last seven years, the hospital has spent €140m on medical equipment and facilities and plans to spend another €14.5m to the end of 2016.

The company's operating profit last year fell 8.5pc from €14m to €12.8.

Interest payable of €1.4m and net finance expense of €327,000 reduced the hospital's profits to €11m.

Staff costs at the hospital last year decreased from €36.5m to €35.9m.

Remuneration for directors totalled €350,000 while profit last year takes account of non-cash depreciation costs of €7.6m. The group's accumulated profits stood at €53m with shareholder funds totalling €75m.

Irish Independent