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Scaled-down BHB spending outlined in Budget

Lauren Bell, the Junior Minister of Health, Economy and Labour, and Housing and Municipalities (Photograph supplied)

Cost-saving measures that have put a strain on the Bermuda Hospitals Board were outlined during the Senate debate on the Budget.

Lauren Bell, the junior health minister, said that as of last February, total savings reached $23 million, with $12 million attributable to government concessions.

She said savings came from internal initiatives, disciplined financial management and keeping expenditures below budget.

“While some non-clinical vacancies were left unfilled due to reduced costs, efforts to hire nurses and clinical staff have maintained service quality,” she added.

Ms Bell said that repairs and upgrades have been “limited to essential needs”, and while the BHB has managed to maintain safety and international care standards, proactive planning and improvements have been hindered.

She added: “BHB continues to invest significantly in capital infrastructures. Financial pressures have led to the deferral of some projects but as Bermuda’s sole hospital provider, BHB prioritises patient safety and adherence to international standards.

“There is no cash for major projects. At the end of March, BHB had recorded a net loss of $15.5 million after taking into consideration savings.

“Net revenue was slightly above budget by $10.6 million and expenses were $3.3 million, or 0.9 per cent, above the budget, highlighting the efforts that BHB staff have undertaken to control costs.

“These cash savings have had a positive impact on investments in staff and the facility, and in equipment.”

The Government allocated $245.4 million to the Ministry of Health in the Budget, an increase of $45 million, or 22 per cent, on last year.

Support for the BHB included $112.5 million in patient subsidies as well as a $42.1 million operational grant for the Mid-Atlantic Wellness Institute.

The ministry has recognised the challenges that the BHB faced recruiting staff and Ms Bell spoke about work on a locum programme to help fill gaps.

The Government allocates a block grant that provides the hospital with a fixed annual budget, most recently set at $322 million to cover operational costs including staff, services and financing obligations under the public-private partnership model.

“This funding approach was initially adopted to control escalating healthcare costs and encourage efficiency within the hospital system,” Ms Bell said.

“While the block grant remains the primary funding model, planning for the future finance model will be in the context of the broader universal healthcare reform goal.”

She added: “Management achieved an average of 6.4 per cent annual internal savings over five years to operate within this fixed revenue.

“Rising costs for utilities, supplies and global drug prices challenged sustaining services and investment in staff salary increases, facility maintenance and upgrades, equipment and technology.”

The BHB had to draw from its $25 million overdraft facility, which is used to cover operational expenses month by month.

A number of initiatives are in the works to help curb spending and raise revenue including a recent fee adjustment raising hospital charges for visitors from 200 per cent to 300 per cent of local rates.

“BHB also plans to introduce limited charges for services influenced by local factors, international markets and overseas vendors including specialist drugs and medical supplies,” Ms Bell said.

“BHB is exploring alternative revenue sources beyond government funding and seeking to extend credit facilities to support growing service demands.”

Ms Bell said new human resources and payroll systems are in the works, adding: “Both systems are old and are at high risk of critical failure. Therefore, upgrades can no longer be postponed.”

A major part of the project will be completed by the last quarter of this fiscal year, she said.

In response to questions by John Wight, the independent senator, Ms Bell said $300,000 had been earmarked for design work to expand the Sylvia Richardson Care Facility to make room for at least ten additional beds.

She said another $620,000 had been allocated for design work to build a new long-term care facility with about 60 beds in the West End that could “replace or supplement” Lefroy House.

“A design competition was launched in April with an expression of interest period which four design firms responded to,” Ms Bell said.

“In May, there were three architectural firms that started work on their designs as part of a conceptual design competition and two remain.

“The Government is committed to building a new purpose-build facility to house the Lefroy Care Community Facility at a location on Morgan’s Point, adjacent to George’s Bay Road and the Railway Trail junction.”

The winning design is expected to be selected by the end of July.

Ms Bell also told the Senate that work to renovate and reopen the Mangrove Bay Health Clinic has begun.

“The selected contractor is now beginning work on site,” she said. “The renovation is expected to take the rest of the calendar year.”

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Published June 05, 2025 at 7:52 am (Updated June 05, 2025 at 7:50 am)

Scaled-down BHB spending outlined in Budget

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