Pretax profits at Galway Clinic drop 44.5% to €5.15m
Medical inflation and lower reimbursement rates by insurers contribute to decline
The Galway Clinic is part-owned by businessman Larry Goodman. Photograph: Joe O’Shaughnessy
Medical inflation and lower reimbursement rates by insurers contributed to pretax profits at the Galway Clinic in 2017 decreasing by 44.5 per cent to €5.15 million.
New accounts filed show that Galway Clinic Doughiska Ltd recorded the sharp drop in pretax profits from €9.29 million to €5.15 million as revenues declined marginally from €90.93 million to €90.65 million.
The clinic is part-owned by businessman Larry Goodman and the directors state that the decline in profitability is attributable to a number of factors.
The directors state that medical inflation is eroding the hospital’s profitability as reimbursement rates from the private health insurers fail to keep pace with medical inflation.
The Galway Clinic is facing higher expenditure in ensuring it meets the highest national and international guidelines and standards, according to the directors.
They state that “these costs are forecast to increase further every year and will form a substantial part of the hospital’s future cost case”.
On the risks facing the business, they say medical indemnity insurance costs are increasing significantly which is another impediment to attracting leading physicians into the country.
The directors also state that they are engaging in multiple strategies to minimise the risk of the shortage in the labour market of healthcare professionals including doctors, nurses and allied health professionals.
They point out that to date, the shareholders have not taken a dividend from the business. At the end of December 2017, the clinic had accumulated profits of €91 million. The firm’s cash increased from €19.4 million to €22.89 million.
In 2017 the clinic spent and committed €6 million in capital works compared to €12 million in 2016.
Numbers employed at the Galway Clinic in 2017 increased from 633 to 648 with staff costs increasing from €32.3 million to €34.6 million.
The pay costs include €719,709 in agency and temporary staff with recruitment and training totalling €1.24 million.
The clinic’s profits in 2017 take account of non-cash depreciation and amortisation costs of €9 million. Medical and pharmaceutical supplies cost €24.42 million.
The clinic recorded post tax profits of €4.12 million after paying corporation tax of €1 million.