Healthcare executives outlined a series of cost-cutting measures today that are designed to ensure the future sustainability of King Edward VII Memorial Hospital.

Cuts to the senior management team and changes to employment benefits will form part of a raft of savings initiatives.

Bermuda Hospitals Board chairman Jonathan Brewin vowed that no stone would be left unturned in weeding out inefficiencies in the service.

Venetta Symonds, the BHB’s chief executive officer, acknowledged that the board would “fall deeply into debt” if it did not save costs and make operations more efficient.

Mr Brewin added: “BHB must continue to reduce costs and our target is to make $40 million in savings.

“This is in addition to a 10 per cent saving from last year’s overhead expenditure budget.

“Fifteen per cent has been cut from this year’s budget, and we are looking for another 10 per cent savings in the incoming year and up to 20 per cent savings are expected as part of a review of vendor contracts.

“BHB is aware of the concern in the community regarding rising healthcare costs, so all its efforts are targeted at ensuring it is as efficient as possible so as to help control the continual escalation in premiums and costs.

“As part of the sustainability work last year, over 80 opportunities for savings were identified. These opportunities and more will maximise efficiencies and focus resources on the patient, as well as seeking to update legislation from the 1970s that doesn’t reflect today’s healthcare needs.”

From April 1, hospital staff will pay the legislated maximum in payroll tax contributions of 5.25 per cent. Previously they paid 4.75 per cent with the rest paid by BHB.

Senior staff and physicians will pay 5 per cent towards their pensions, with the amount matched by BHB, rather than a 40/60 split.

Mr Brewin added: “More needs to be done for us to meet our targets, especially as revenues are declining, and we are feeling the impact of no longer being reimbursed in full for CCU services.”

A restructuring of senior management is already under way, with the new team comprising of: chief executive officer, chief of staff, chief of psychiatry, chief of nursing, chief financial officer, chief operating officer (KEMH) and chief operating officer (MWI).

Ms Symonds announced that there will also be a “reduction of four senior management posts over the next two years”.

According to the BHB statement released this afternoon, the positions of chief of human resources (CHR), chief information officer (CIO) and vice-president of nursing will be “disestablished” this fiscal year.

The statement continued: “CHR and CIO responsibilities have already been transferred. The vice-president, nursing has been on secondment to the Bermuda College for a few years, and this will end on March 31, 2015.

“The chief operating officer (MWI) position will be merged with the COO (KEMH) position over the next two years. From 2017 there will be one chief operating officer.”

Ms Symonds added: “Change is not always easy and, while I am saddened that we are saying goodbye to skilled and experienced senior managers who have diligently worked alongside us and given so much, this is an important step for us to take.

“BHB must save costs, make clinical services and back-office operations more efficient, and modernise legislation, among other deliverables, in order to make enough surplus to meet community, clinical and financial obligations.

“If we do not, BHB will fall deeply into debt and will add to the already stretched financial burden of the country.

“The status quo is not an option and we need to streamline and reshape BHB, its services and guiding legislation around the modern needs of Bermuda.”

• For the BHB’s unaudited balance sheet and income statement to December 31, 2014, click on the PDF link under “Related Media”.