A subsidy hike for King Edward VII Memorial Hospital came as welcome news yesterday for the cash-strapped Bermuda Hospitals Board.

But rising costs — which Finance Minister Bob Richards in his Budget statement warned could bankrupt Government — have BHB scrambling to keep up, according to chairman Jonathan Brewin.

The Budget for the coming fiscal year shows the KEMH allocation rising from $104 million to $109.5 million.

The increase reflects a one percent rise in hospital fees, and will go toward the cost of the new acute care wing.

However, Mr Brewin said: “This increase alone will not resolve the serious financial issues we face.

“Internationally, healthcare costs, for example supplies, drugs, equipment and staff, are rising at a much higher rate.

“BHB must look to restructure and ensure it is as efficient as possible in order to become financial sustainable.”

The chairman said he agreed with the Minister’s appraisal of the dangers of increasing health costs, adding that BHB undertook a comprehensive review of its financial sustainability starting last year.

“Nearly 60 percent of healthcare costs relate to services outside of the hospital, and much of our outpatient diagnostic work is driven by external referrals,” Mr Brewin added.

“We must cooperate and collaborate across the country and seek the best way to achieve the quality we want, at a cost we can afford.”