Hospital officials last night said a 7.5 percent hospital fee increase will cover the cost of a multi-million dollar, five-year consultation contract.

Last year the Bermuda Hospitals Board (BHB) entered the contract with Kurron America Shares for a cost of $11 million. Kurron was tasked with recruiting healthcare administrators as well as helping with modernising the hospital wards.

The Ministry of Health took control of the contract from July last year until March this year, which was a total of $1,998,310.

As the BHB prepares to take on the rest of the contract, which starts with a cost of more than $2.5 million this year, with staggered payments for the next five years, a BHB spokeswoman said the money was budgeted for.

She said: "The Kurron contact is with Bermuda Hospitals Board and we are responsible for payments. The contract was signed part-way through the financial year 2007-08, so Government reimbursed BHB for the first year as it had not been budgeted by the BHB.

"This reimbursement was agreed as Government recognised the larger than normal agenda faced by the hospitals management and rather than waiting for a full budget cycle, the Ministry of Health made it possible for the contract to start in July 2007 without impacting the hospitals' finances.

"Bermuda Hospitals Board can confirm that the 7.5 percent fee uplift for 2008-09 is adequate to cover the costs of the contract and other operating increases.

"The BHB is working to a three-year financial strategy that was approved by the Board in 2007. It includes all the required investments (a capital programme), costs, projected revenues and the impact of different scenarios – such as what fee uplift is agreed each year."

For the second year in a row the Government approved a 7.5 percent increase in hospital fees in March.

During the debate in the House of Assembly, both John Barritt the Opposition Whip and the Shadow Health Minister Louise Jackson voiced their concerns about the ever increasing price of healthcare.

But Mr. Bascome assured the House that the fee increase had been recommended by the Bermuda Health Council and would cover the contract.

Last night the BHB spokesperson also clarified the amount of the contract which was originally reported to be worth $13 million.

She said: "The cost of the actual contract is $11 million over five years plus expenses. In the interests of transparency Bermuda Hospitals Board included the expected cost of expenses over the five years in the total figure, which is approximately $13 million.

"As we move through the contract, this will be fully accounted for and audited in accordance with accounting principles generally accepted in Bermuda and Canada."