Grey Bruce Health Services is implementing an action plan to offset a year end shortfall of $4.5-million.
President and CEO Lance Thurston says that equals about 2.5% of the $182-million budget.
He says with inflation, that deficit is estimated to grow to $6-million by the end of the 2017-2018 fiscal year.
The board of directors has approved a plan to cut costs and increase revenues.
He says funding is not keeping pace with escalating costs, especially for small, rural multi-site facilities like GBHS.
The plan will focus on a review of surgical services, length of stay, outpatient services, staffing skill sets and patient transportation.
Staff teams are being assembled to look at each key area.
Patients, partners and the public will be consulted.
Hospitals are not allowed to have budget deficits.