Blackrock Clinic sees profits dip on reimbursement rates

Newly filed accounts show private hospital generated pretax profits of €13.1m last year

Dublin's Blackrock Clinic saw pretax profits fall slightly last year due to reimbursement rates from health insurers.

Accounts recently lodged at the Companies Registration Office show the private hospital generated profits of €13.1 million in 2015, as against €13.5 million a year earlier.

The clinic, which has spent more than €150 million on medical equipment and facilities over the last nine years, including €5 million in 2016, said it did not receive a rise in reimbursement rates last year, which had offset a “strong increase” in impatient and day care activity.

“The reason profits dipped in 2015 is that the hospital did not receive a price increase from insurers, however its costs did increase. As well as ongoing medical inflation the hospital experienced general cost increases, including pay,” said chief executive James O’Donoghue.

"It is a similar scenario for 2016 whereby price increases from insurers are not matching the hospital's cost increases, however activity has increased which should offset the impact of declining margins," added Mr Donoghue, who replaced Bryan Harty as head of the company in July.

Loan finance

Turnover at Blackrock Hospital Ltd and subsidiaries rose to €111.4 million in 2015 compared with €93 million in the previous year.

Its corporate tax charge rose to €1.7 million from €1.6 million.

The hospital negotiated loan finance during 2015 amounting to €62.5 million repayable over seven years together with an overdraft facility.

The company paid €5 million in dividends to shareholders, who include beef baron Larry Goodman, of which €2.9 million was paid prior to the year end. This marks a rise on the €4 million paid out in 2014 but is down versus the €5.6 million dividend awarded in 2013.

A bitter legal dispute involving shareholders of the clinic continues.

Mr Justice Robert Haughton last month urged the hospital's cofounder Dr Joseph Sheehan and Breccia, whose co-directors are Mr Goodman and Declan Sheeran to have an "open and honest" discussion about the issues in dispute.

He warned that continuation of the “negative and destructive” litigation was neither in the interests of the hospital nor the parties.

Hermitage

Separately, accounts for the Hermitage Medical Clinic in Lucan, of which Mr Goodman is also a shareholder, reported a 36 per cent drop in profits last year despite a 10 per cent rise in revenues.

The 112-bed hospital saw profits decline from €2.98 million to €1.91 million on turnover that increased to €63 million from €57 million.

The accounts show the clinic has received €26 million in funding from shareholders since it opened in 2006. Other shareholders in the hospital include developer Sean Mulryan.

Shareholders’ deficit at the end of December 2015 totalled €8 million, down from €9.3 million a year earlier.

The hospital employed 406 people last year with staff-related costs amounting to €21.9 million, as against €19.5 million in the prior year. Directors’ remuneration rose to €842,284 from €698,672.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist