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.
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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