The Bermuda Hospitals Board said its surplus is not driving up health care costs.

But United Bermuda Party MP Grant Gibbons said it was important the board justifies several of its increases in charges, and salaries.

He said it was important Bermuda was receiving the most efficient and cost-effective health care services because the hospital accounted comprises over 40 of total health care costs in 2009.

Earlier this week a summit on health financing was held which showed Bermuda spent more on health care than most OECD countries but did not have the longest life expectancy.

The summit indicated that the current model would not be sustainable, particularly as the number of retirees to workers is set to triple in the next 20 years.

The recently released BHB 2010 financial statements showed the board had increased their assets by $21 million, or 32 percent, compared to last year. They also recorded a $18 million surplus, or profit, compared to $8 million in 2009. The board was the first public body to table their audited report.

Yesterday, the board said it was imperative they generate a surplus so they can reinvest it in the King Edward VII Memorial Hospital.

Spokeswoman Anna Lowry said: "While there has been some public discussion about the hospital achieving a surplus, this is a requirement for us to do business and an international standard for hospitals. Indeed, BHB's mandate as set out in the Hospitals Act 1970 is to be able to earn enough surplus to ensure it can reinvest in its services to meet the health care needs of Bermuda.

"If we didn't make a surplus we could not afford to undertake necessary improvements. International norms are for hospitals on average to generate a six percent annual surplus, and we are pleased to be in line with this standard in 2009-10.

"Our surplus pays for upgrading our facilities and investing in technology — all of which improve patient care. We are also ensuring adequate surplus to pay for the annual service payment for the new building."

The cost of health care has risen by 12.6 percent every year for the past six years and accounts for 9.2 percent of Bermuda's Gross Domestic Product; the BHB said the their surplus does not "directly translate" to these increases.

Ms Lowry said: "The hospital has been working hard to improve its efficiency and offer more services on-island to reduce the need for costly medical travel. Some of our surplus is therefore a redistribution of existing health care spends. Some relates to increased usage.

"For this reason, a dollar figure for the hospital surplus cannot be seen as the only driver of health care premium rates.

"What we can say with certainty is that hospital costs make up about half the health care dollar. The rest relates to other physician and health care providers, overseas health care travel and insurance administration costs."

She added that the board is meeting its financial targets set out in its five-year strategy.

But Dr. Gibbons said the financial report raised several questions, such as:

Why there was a $20 million increase in salaries and employee benefits,

Why inpatient revenue rose by $20 million, or 32 percent, in one year when the number of in-patients decreased by 100,

Why was only $6 million set aside for the redevelopment?

"There are a lot of questions here," he said. "I am not saying they are ripping off the public but they had to justify these large increases in surplus and revenues in one year.

"We are no longer in a situation where certain inpatient procedures cost less here than they do abroad. Insurance companies are finding that some procedures cost the same abroad, or less. "They need to justify their increases and show that they are efficient as is required under their act. The BHB account for nearly half of all health care spending on the Island and we need to make sure it is being effectively spent."