The Bermuda Hospitals Board last night admitted it would be “challenged” by budgetary constraints after it received a Government subsidy of $104 million, unchanged from last year.But the Ministry of Health and Seniors got a two percent boost in yesterday’s Budget, and a total of $195.2 million for the fiscal year ahead.Last night BHB chairman Jonathan Brewin told The Royal Gazette that reduced income and rising costs were squeezing the BHB.While the BHB subsidy announced yesterday by Finance Minister Bob Richards is the same as the previous year, the cost of drugs and supplies have risen in line with international costs.Mr Brewin added: “And BHB is also in the midst of preparing to meet the financial obligations of the new acute care wing. Payments will start next year in 2014.”Services and standards won’t be affected, he said, but BHB needs to take “a serious look at what we do and consider if we need to reshape our service offering, in order to work within the budgetary constraints”.BHB runs both the Island’s hospitals, along with the Lamb-Foggo Urgent Care Centre.King Edward VII Memorial Hospital will be held to its $104 million subsidy, which crept up to $107 million in the final figure for the 2012/13 Budget.Meanwhile, the operational grant for the Mid-Atlantic Wellness Institute was cut from $38.6 million to $37.3 million.Said Mr Brewin: “We will be working with staff, unions, and other stakeholders to drive through efficiencies.“The process of contract reviews and zero-based budgeting this year have given us great clarity about our financial position. Wage freezes are already in place for senior management, and we will be discussing with our union partners and staff ways to try and control salary and compensation costs further.”Part of the KEMH subsidy could go toward the reopened Medical Clinic, for Bermudians who cannot afford health insurance.Asked for details, a Ministry spokeswoman last night said Government was still working on estimates for the annual cost of the facility.“What we’re anticipating is that if people attend the Medical Clinic, rather than the Emergency Department, then there will be cost savings — meaning that money from the allocated $104 million could be transferred to fund the Medical Clinic.“It may not cover all the costs; it may only cover part of the cost. Ultimately, the final number is still to be determined.”Useful website: www.bermudahospitals.bm.