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BHB short of $32m over four years as Government injects more money

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Shortfall: King Edward VII Memorial Hospital (Photograph by Akil Simmons)

The Bermuda Hospitals Board was short-changed to the tune of $32 million in funding in the past four years, it emerged today.

Kim Wilson, the Minister of Health, released the figure at a press conference on her department’s budget for the next year.

The ministry has been given almost $200 million in the 2023-24 Budget, with hospital running costs swallowing up most of that sum.

Ms Wilson said that the Bermuda Hospitals Board will be allocated $155 million to run the King Edward VII Memorial Hospital and the Mid-Atlantic Wellness Institute.

Kim Wilson Minister of Health lays out Budget plans at a press conference yesterday (Photograph by Blaire Simmons)

That figure represents an increase of $7.9 million compared with last year and partially makes up for a shortfall in government funding in the past four years. The Cabinet agreed to provide the BHB with an additional $15 million to top up the grant.

In 2019 the Government and the BHB agreed that it would receive an annual block grant of $322 million, made up of a government grant, Mutual Reinsurance Fund transfers and taxpayer subsidies. It costs about $27 million a month to run the island’s two health facilities.

That grant has never been paid in full, leaving the BHB with a shortfall of about $32 million over four years.

Two years ago, The Royal Gazette revealed that the BHB had been forced to take out a bank overdraft to cover emergency expenses.

At that time, Ms Wilson said that she had “grave concerns” about the financial outlook of the health system, in part because of the cost of containing the Covid-19 virus.

Ms Wilson said that this year’s grant would put the BHB’s finances in a healthier position.

She added that the boost would also reduce the risk of the BHB defaulting on its government-guaranteed debt for the acute care wing, which costs about $25 million a year.

Ms Wilson said she was not certain of the final figure that the Government would be exposed to if the board did default, and added: “It’s certainly something that we do not want to entertain.”

The minister said: “It’s regrettable that that was never honoured on a year-by-year basis.

“The total shortfall is about $32 million, so this $15 million supplemental will help to basically cut that in half.

“The hospital has a very dedicated and committed staff as well as an executive and a board that oversee the operations of the hospital and quality control and the administration of services and the like.

“We have to commend the hospital because they have done tremendous work to try to reduce their overheads and expenditure, so they’ve done their share.

“This financial commitment will help to ensure the hospital is placed on a more sound financial footing."

Ms Wilson added that there will be a further increase to the BHB budget next year, although she was unable to give a specific figure.

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Published February 23, 2023 at 7:51 am (Updated February 23, 2023 at 8:21 am)

BHB short of $32m over four years as Government injects more money

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