Growing pressures on an unsustainable healthcare system have caused serious financial difficulties for the Bermuda Hospitals Board, the Public Accounts Committee has heard.

BHB bosses appeared before the PAC to explain the increasing financial challenges they face on the back of government funding cuts, including a $25 million reduction in its 2017-18 budget subsidy.

CEO Venetta Symonds told the committee “we did not expect the revenue constraints we are having now”.

“For the year 2017-18 we do not expect any impact to our clinical service at all,” Mrs Symonds said at the meeting on Thursday.

“But the situation is unsustainable and we know that and it is important for us to come forward with a plan and provide that care. We are constrained with how we can operate. What we have to work out is how we are going to affect care; we can not fix this problem.”

Despite amassing a surplus of $113 million at the end of the 2016-17 financial year, BHB faces a minimum $40 million deficit for 2017-18 owing to the Government’s $25 million cut — announced in February’s Budget — as well as $16 million shortfall on the 2016-17 government subsidy.

The quango has also been hit by a reduction in the fees for diagnostic imaging, dialysis and long-term care.

Chief financial officer Bill Shields told the PAC: “The fees are set so we can generate a surplus; internationally you would expect that to be between 5 and 7 per cent.

“We generate a surplus because there is no other way we can fund infrastructure projects; we don’t borrow from Government.”

Mr Fields, however, warned that if the deficit was not paid back to BHB then they could run out of money by 2019-20.

He said: “We will continue to generate bills and send them to insurance companies and Government. We will not run out of the ability to deliver, but if we did not see an increase in the subsidy level, what with all the other pressures, we would estimate that we would physically run out of cash in 2019-20.

“This year we know we will write off $40 million. We know that we will not make a surplus this year. The surplus will go to a deficit and there will be $25 million to be made good.

“We need to have further conversations about the level of reasonable surplus to invest in critical infrastructure programmes.

“The BHB Act makes it very clear that we have to break even; if we have a deficit in the current year which we will do, we have to generate a surplus that is equal to that deficit.

“Once we get to $50 million we start to get in real trouble. When we get below that we are getting to a position where we are not as liquid as we need to be.”

The PAC heard that the current workforce at BHB was 1,800, of which 70 per cent were Bermudian. However, 70 per cent of the professional qualified staff are non-Bermudian.

This prompted PAC member Jeff Sousa of the One Bermuda Alliance to urge Bermudians to consider looking to healthcare as a profession, adding: “There is a dire need in this country.”

Mrs Symonds ended the presentation by saying that “improving the health of our community is what is important to us”.