Medical inflation sees Galway Clinic profits fall 44.5pc
MEDICAL inflation and lower reimbursement rates from insurers contributed to pre-tax profits at the Galway Clinic in 2017 decreasing by 44.5pc to €5.15m.
New accounts filed show that Galway Clinic Doughiska Ltd recorded the sharp drop in pre-tax profits from €9.29m to €5.15m as revenues declined marginally - from €90.93m to €90.65m. The clinic is part-owned by businessman Larry Goodman.
The directors state that medical inflation is eroding the private hospital's profitability as reimbursement rates from the private health insurers fail to keep pace with medical inflation.
On the risks facing the business, the directors state that medical indemnity insurance costs are increasing significantly and that this is another impediment to attracting leading physicians into the country.
The directors point out that the shareholders have not taken a dividend from the business. At the end of December 2017, the clinic had accumulated profits of €91m. The firm's cash increased from €19.4m to €22.89m.
In 2017, the clinic spent and committed €6m in capital works compared to €12m in 2016. Numbers employed at the Galway Clinic in 2017 increased from 633 to 648 with staff costs increasing from €32.3m to €34.6m. The pay costs include €719,709 in agency and temporary staff. The clinic's profits in 2017 take account of non-cash depreciation and amortisation costs of €9m.