Staff costs cut profits in half at the Bons
HIGHER staff costs saw profits at the country’s largest privately owned hospital group more than halved last year to €2.09m.
New figures lodged by the Cork-based Bon Secours Health Systems (BSHS) Ltd with the Companies Office show that the group recorded the drop in profit in spite of revenues increasing by 8pc, going from €243m to €263m.
The group employs 3,000 staff, along with 450 leading medical consultants, in privately run hospitals in Cork, Dublin, Galway, Limerick and Tralee and provides care to 280,000 patients annually.
The directors state that they achieved the profits “in a competitive and challenging environment”.
According to the directors’ report: “The decrease in profit for the year is attributable in the main to higher payroll costs associated with service expansion and the progressive restoration of pay in line with national pay agreements.”
The directors also state that the drop in profit is as a result of increased finance costs and to the write-off of goodwill arising from the acquisition in February 2017 of Limerick private hospital Barringtons.
The accounts disclose that the group acquired Barringtons Hospital for €14.6m with a total of €5.18m goodwill arising on the acquisition.
The directors also state that overall in-patient bed-nights and day-case volumes reduced going from 201,145 to 200,653.
The directors state that a 3pc increase in day-case volumes in the year was offset by marginally lower in-patient volumes that, in turn, reflected a lower volume of patient referrals from the National Treatment Purchase Fund.
The directors state that this occurred “despite our ever-present willingness to assist the HSE and public patients in this initiative”.
The directors also welcomed the increased numbers of people holding private insurance but state that “of concern, however, is the progressive downgrading of policy cover by the private health insurers who at the same time continue to challenge BSHS and other healthcare providers to expand and enhance services and to also reduce costs”.
The directors state the group’s 2020 Strategic Plan is a capital investment programme of €150m over the period to
2020 across the group in modernising and expanding facilities. During the year, the group made contributions totalling
€573,000 to charitable causes. Numbers employed last year increased from 2,802 to
3,105 with staff costs totalling
€136.6m.
The accounts disclose that
€3.9m was paid to Bon Secours Sisters Ireland in respect of lease costs. The group had shareholder funds amounting to €139m, while its cash pile decreased from €22.5m to €8.5m.