12/07/2011 01:31 EST | Updated 02/06/2012 05:12 EST

Nova Scotia looks deeper for savings in administrative costs in health system

HALIFAX - Nova Scotia's district health authorities and the IWK Health Centre have selected six areas where they will try to cut administrative costs.

Ernst & Young has been asked to look for savings in areas including purchasing, warehousing, laundry services, information technology, human resources and general administration.

Health Minister Margaret MacDonald says the consulting firm is about halfway through its study and its report is due before the end of this fiscal year.

Ernst & Young's three-month contract costs $98,000.

The government has told the health authorities it wants a three per cent cut in health care spending and MacDonald says savings identified by Ernst & Young could be used to offset those cuts.

Pat Lee, CEO of the Pictou County Health Authority, says jobs will be affected.

"We know that jobs will be impacted in administrative services as we significantly change the way services are delivered so that we can save costs," Lee said Wednesday in a statement. "But at this point it is too soon to predict numbers."

MacDonald said the government has asked the health authorities to minimize the impact on patient care.

"Health care costs have doubled in the past decade so it is incumbent upon us to review how we are spending health dollars in the area of administration," she said in a news release.