Local hospital patients may have to pay for extra services in the future to help the Collingwood General and Marine Hospital eliminate its deficit.

"We need to become a full-cost-recovery hospital," said Don Smith, chair of the hospital's board of trustees at the G & M's annual general meeting Monday night.

"We need to start charging patients for costs not fully covered by the provincial government," he said.

Smith noted the hospital had a $425,000 operating deficit in 2008 and is projecting a $535,000 deficit this year.

"We can't continue to have half a million dollar deficits and continue to be viable as a hospital," he told the corporation's membership at the AGM held at the Leisure Time Centre.

As an example, he said non-urgent transportation - moving patients from the hospital to a nursing home or to another hospital - cost the G & M $300,000 last year and is not covered by provincial funding.

He said the board would have to decide if this was part of the hospital's continuing care or if it was something they wanted to charge back to patients.

Smith said the hospital is continuing to improve operating efficiencies by reducing costs and waste by acting on opportunities identified in an operational review conducted last year.

"I think the hospital is well-run, but we are overcrowded," said Smith, adding they are operating at 98 per cent capacity, when the ideal is 92 per cent. "It strains our staff, our facility and our finances."

To address the space issue, the hospital has developed short and long-term plans for expansion.

In the short term, the hospital plans to build a two-storey, 7,000-square-foot modular building in the parking area that will house administration, finance and human resources, freeing up room in the hospital for expanded clinical services.

Hospital president and CEO Linda Davis said the expansion would allow more room for the emergency department, which is very cramped.

It would also expand the dialysis area and move the endoscopy unit out of the operating room. This will create more room in the operating theatre and improve the efficiency of both units, shortening wait times by removing bottlenecks and improving the flow of patients.

In the long-term, the hospital is pursuing a major redevelopment or even a brand new facility.

Davis said the hospital conducted a population study that shows continued growth and development in the area served by the hospital over the next 10 years.

The 72-bed hospital is already at capacity and the goal is to expand to a 125-bed facility by 2026.