Report: Irish hospital loses cash
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A Dublin hospital owned by a company in which the University of Pittsburgh Medical Center holds a 70 percent stake has been losing millions of dollars annually.
According to a report in the Irish Times newspaper this week, Beacon Hospital lost $14.5 million in the 10 months ending June 30, 2010. Its parent company, UPMC Beacon Hospital Sandyford Ltd., lost $7.2 million during the same period, following a loss of nearly $30 million in the 12 months ending in August 2009.
The paper quoted an unnamed source as saying the company is "not generating sufficient profit to finance its ongoing activities. The company is therefore wholly reliant on continued financial support from its parent company to allow it to continue to trade and meet its liabilities as they fall due."
Another media outlet, topnews.us, reported that an $868 million plan for developing three Beacon-affiliated hospitals that once included UPMC has been halted after the Health Service Executive, the public authority that provides health and social services to Irish citizens, refused an extension request.
The report said HSE had terminated the contract after Beacon and UPMC had invested more than $40 million over five years on the project. UPMC spokeswoman Wendy Zellner said UPMC had not invested money in the projects.
"Instead, we received a 40 percent equity interest in the co-location companies as part of the overall restructuring of UPMC Beacon Hospital. We exercised an option to trade the 40 percent interest for an additional 3 percent stake in UPMC Beacon Hospital, so our ownership is now approximately 70 percent."
As for the losses at Beacon, Ms. Zellner said, "we are in the early stage of our efforts to transform the delivery of care in Ireland," but that "we are confident that these investments will provide financial returns similar to our experience in Italy, the U.K. and Qatar."
She also noted that the hospital's occupancy rate had gone from 50 percent to 80 percent and that the hospital was in the black on its earnings before interest, depreciation and amortization, although she could not provide specific numbers.
UPMC became two-thirds majority owner of the company that operates the hospital in 2009 with a 25 million euro investment, the equivalent today of $35.8 million. That followed its original investment of 15 million euros, or nearly $25 million by current exchange rates, for a total exceeding $60 million.
First Published April 9, 2011 12:00 am