That the regional health body has come to the aid of Quinte Health Care with a loan of $3.6 million to cover the hospital's looming deficit is a welcome development.

Granted, QHC will have to pay back the funds over an as yet unspecified period to the South East Local Health Integration Network.

But if the LHIN did not think the funds would be returned, rest assured there would be no loan. After all, about half, or 75, of the province's 154 public hospitals are facing deficits, and it's unlikely the provincial government expects its regional LHINs to bail out every hospital struggling to gets its costs under control.

This arrangement is no different than a bank loaning money to a business for bridging capital.  Banks as a rule only advance funds to those who can repay and health care is big business.

David Graham, chairman of the hospital board's finance committee, said the arrangement should spell the end of any possibility of service cuts or consolidations at any of QHC's four sites: Bancroft, Belleville, Picton or Trenton. In fact, he said the board is not even considering any cuts.

However, despite optimism on the part of QHC and LHIN officials, the hospital's difficulties in achieving its provincially mandated budget along with many other hospitals is a sign funding of hospitals will have to continue growing in future to avoid service cuts.

For QHC now, however, repayment is predicated on money-saving measures the hospital corporation is implementing and not all of them have been made public. The measures will take time to accumulate savings, hence the reason for the loan extension.

For example, the Murphy Walsh consultant's report has been billed as saving QHC at least $4 million. At a public meeting in Picton this year, QHC president Bruce Laughton said the savings could be as much as $5 million, but hospital officials decided to be conservative when talking about the savings yet to be realized.

The consultant's report, following rounds of interviews with various staff members, tracked what employees did in a day and deals with the quality of work life at QHC. Its aim is to help the hospital make more efficient use of staff, particularly nurses, thereby cutting stress, sick days and overtime.

The recommendations are just beginning to be implemented, so will take time to accrue savings.

The hospital, however, has already incorporated the anticipated $4 million savings to bring its deficit down to $3.6 million, the amount the LHIN is willing to cover with a loan.

That's putting a lot of trust in a report that could save money and involves steps that have yet to be taken.

However, it stands to reason that if the Murphy Walsh report delivers on the savings, it will do so the next year and so on into the future. That's a prescription for good financial health.

But let's not forget that each year, costs are increasing at hospitals. Wages and equipment costs are outpacing the current annual increases awarded to hospitals: 2.4 per cent this year and 2.1 per cent the following. But the biggest uncontrollable cost factor at QHC is overcrowding.

All QHC sites are at times full to capacity, particularly Belleville and Trenton. The beds are taken up predominately by elderly people who cannot be discharged to a nursing home because of a bed shortage there.

There are 192 new nursing home beds (128 in Tweed and 64 in Trenton) in the works and they are expected to open in the spring of 2009.

Until then, QHC will continue to struggle with cost.