YEAR ago Bermuda's hospitals were losing money at the rate of around $7,000 a day ? now they are operating at a profit.

Though BHB chairman Jonathan Brewin is quick to give others the credit, the fact is that that transformation in financial fortunes has been achieved in his short time at the helm.

"In the financial year ending 2003, we lost a lot of money ? around $2.5 million ? but this year we have a surplus," Mr. Brewin said.

"The managers are doing a great job of managing their budgets and I'm pleased that the Financial Committee is making such good progress.

"They have managed to be successful despite the cost of Hurricane Fabian, which was expensive not just in terms of structural damage but also in overtime."

King Edward VII Memorial Hospital lost one third of its fifth floor as a result of the hurricane and had to relocate its Human Resources Department.

An additional financial millstone around the neck of the BHB is caused by the patients who have no health insurance. The hospitals are owed more than $2.5 million for such cases.

But that figure emphasises one aspect of why health care is different from other businesses.

"If you want a taxi and you've got no money then the taxi driver will not take you," Mr. Brewin said.

"But if a patient turns up at the hospital in need of treatment and he has no insurance and no money, does the community expect us to turn that patient away? No, I don't think so."

But hospital finances have received a major boost from the refinancing of BHB bonds ? a move that will save the board $700,000 over six years.

This year, the hospital hopes to introduce a new payment structure for patients known as 'chargemaster', based on a fee-for-service system.

And the board has made moves to tighten controls and accountability at management level in line with recommendations made by Auditor General Larry Dennis to keep the financial situation improving.

But the chairman's number one priority for 2004 is to improve the quality of health care at the hospitals.

"We are setting up a new directorate to concentrate on quality," Mr. Brewin said. "It will be very proactive and will not just be involved in monitoring hospital performance but also clinical outcomes, comparing us with other jurisdictions. And we will also be carrying out regular surveys of our clients."

over the world, it is a fact that patients occasionally get harmed when they are treated in hospital. A recent Harvard Medical Practice Study survey found that four per cent of patients suffered some kind of harm while in American hospitals. The adverse events led to short-lived disability in 70 per cent of those cases and death in 14 per cent of them.

Mr. Brewin said the BHB's aim was "to ensure that we surpass the internationally-accredited standards in high-quality patient care".

As well as his role with the BHB, Mr. Brewin is CEO of the HWP Group and president of New Venture, a group that includes several local companies including CCS and Elite.

He has been involved in Bermuda business for some seven years and before that was involved in top positions in hospital administration in the UK at both state-run and private hospitals.

Although the provision of high-quality health care is the top aim of the BHB rather than making a profit, good business practice is an important factor in achieving it, according to Mr. Brewin.

"Business principles are very similar whatever business you are in," the chairman said. "But I can't think of any business that is as diverse and complex as a hospital.

"There are so many variables, so many things that have to be clicking at the same time for it to work. A CEO's job at a hospital is extremely demanding.

"It is a fascinating area. Even being involved in the periphery of health care gives you a real sense of purpose. It's exciting and stimulating.

"We have a great board with members who are very committed. They are working well with sub-committees and doing a great job."

Perhaps the biggest single challenge faced by the BHB is the state of the 45-year-old King Edward VII Memorial Hospital, which is worsening year by year.

Mr. Brewin is open about the need for improvement and said the board, in consultation with health care experts and with consideration of what kind of health care facilities will be needed in future, is planning a long-term estate strategy to rectify the situation.

Mr. Brewin hinted that a complete overhaul or even a new building might be more effective than attempting to patch up the existing hospital.

"In my humble opinion, I think there's only so much band-aiding you can do to a building that's already 45 years old," he said.

"They used old technology even at the time it was being built. We have a lot of galvanised pipes, the air-conditioning is not of the standard normally required and the wiring has given us problems.

"Fabian gave us a reminder of how serious the situation is by blowing bits off."

BHB planned to hire overseas experts to help formulate a ten to 15-year strategy to best utilise the board's two sites, KEMH and St. Brendan's, with the aim of bringing facilities up to modern health care standards, said Mr. Brewin.

To achieve that aim will cost tens of millions of dollars and there are plans in the pipeline to set up an organisation called the Health Care Trust to raise the necessary funds.

The two hospitals currently employ 1,342 staff and Mr. Brewin said they were the BHB's most valuable resource. Although a remarkable 40 per cent or so of the staff have been employed there for ten years or more, the 20 per cent turnover rate is a cause for concern.

"We are losing a lot of highly qualified nurses and technicians," Mr. Brewin said. "Obviously we are so reliant on expats that our turnover rate will be higher an equivalent hospital in the US or the UK. But still we have no understanding of why it is so high.

"To try and help us find out, two members of the board have taken on the role of staff advocates. Working closely with the Human Resources Department, they will try to understand what the issues and come back to the board and tell us.

"If staff suggest ideas on what could improve a particular area, then we can consider them and, if possible, implement them. I wouldn't want to compromise management or the fine work being undertaken by staff organisations, and I wouldn't want the advocates to get involved with personal issues, but this is a way we can keep our finger on the pulse."

The Ministry of Health commissioned a report on the work of the hospitals by American health care consultants Kurron Shares of America last year.

The move caused anxiety among some hospital staff as Kurron had gained a reputation for rescuing struggling hospitals ? but axing jobs in the process.

The report has yet to be made public but the Health Ministry recently confirmed to this newspaper that job cuts were included among the numerous recommendations made by Kurron.

"The organisational audit made many recommendations and some of them were inspired by discussions with the staff themselves," Mr. Brewin said.

"In 2004, we look forward to looking closely at those recommendations and acting on them where they will make improvements."

Among the changes Mr. Brewin and his new board introduced in 2003 was the appointment of public relations consultants Troncossi to help them achieve their aim of better communication with the public and transparency.

"Communication is the key ? not only communication with the community but also within the hospital," Mr. Brewin said.

"It's a big rumour mill out there and it's better for us to be proactive in getting our point of view out there.

"We are making efforts to keep members of staff better informed of what we decide at board meetings by publishing a one-page board briefing that we circulate to them.

"We also try to work closely with health-care stakeholders such as doctors, nurses, unions, the Ministry of Health and the Ministry of Finance and have regular meetings with others involved such as the Agape House people and the people who provide our television service."

In keeping with their proactive policy on PR, the BHB commissioned a survey to gauge the public's feelings about health care and released the results this week.

Of those questioned who were treated by the hospital within a six-month period last year, 86 per cent were either completely or mostly satisfied with the standard of health care they received.

The results appear to make positive reading for the BHB.

"This is encouraging for us," Mr. Brewin said. "The results make us think there is a groundswell of appreciation out there for what we do."