Fall in number of people with health insurance hits profit at Bon Secours

Reductions in the numbers holding private health insurance contributed to profits at the country’s largest privately owned hospital group decreasing by 36% to €7.4m in 2012.

Fall in number of people with health insurance hits profit at Bon Secours

New figures lodged by Bon Secours Health Systems Ltd show the group recorded the drop in profits in spite of revenues increasing from €221.79m to €223.3m in the 12 months to the end of Dec 31, 2012.

The directors state that the income and surplus were achieved “in a difficult trading environment”.

The firm’s profits fell from €11.6m to €7.4m.

The group operates 850 beds in hospitals in Cork, Dublin, Galway and Tralee, employing over 2,700.

The directors’ report states that the group is facing a number of challenges including lower yields on claim submissions to health insurers; unrecoverable inflationary costs such as payroll increments; reductions in the numbers holding private insurance cover, augmented by the tendency of others to downgrade the level of cover held.

There has been a net margin erosion to 3.3%, compared to 5.3% in 2011, and a reduction in overall profitability of over 36% year on year, the report said.

“As a not-for-profit organisation, Bon Secours reinvests all surpluses in upgrading and developing its hospital facilities. In 2012, €6.27m was spent by the organisation on capital projects and the board has already announced plans to proceed with a capital development programme of almost €60m at its Cork and Tralee hospitals.”

Staff costs rose from €118m to €120.85m, that included €107.1m on salaries; €11.3m on social welfare costs and €2.4m on other pension costs.

Operating expenses rose from €187.2m to €192.6m in 2012 with administrative and other costs increasing from €25.7m to €26.3m.

The directors state they “intend to continue to develop the group’s ability to deliver high-quality medical care to patients at each of its hospital locations”.

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