"We are investing more in homecare, in community care, in priority areas so people don't have to wait so long for treatment. We want the entire health-care system to work better together."

Bloorview MacMillan Children's Centre, the largest rehabilitation hospital for children in Canada, is looking at a projected deficit of $750,000 on a total budget of $58 million for this fiscal year and growing to about $1.2 million for 2005/2006.

Budgetary cuts at both Sick Kids and Bloorview will mean longer waits for children's services, senior staff at both hospitals say.

"I can't imagine how we'll reduce patient care areas without having an impact on waiting lists," said DeGiusti.

Sick Kids, one of the largest pediatric academic health centres around the globe, is known for its cardiac care, brain tumour and genetics research, and numerous clinics dealing with everything from diabetes, ear nose and throat problems to fractures.

Sick Kids' board of directors will be meeting to discuss their plan on Oct. 21. They have asked for and been given an extension until Oct. 29 to submit their report to the province.

"Everybody is working away at this," DeGiusti said.

"When the board meeting is over next week, we'll have a better sense of details."

For the 2004-2005 year, Sick Kids' deficit forecast is $30 million, which climbs to $45 million the following year.

The hospital had a third party come in to look at operations and they found the hospital's costs rise 9 per cent a year largely due to inflation, medical supplies and salary costs.

"Because we are in a children's hospital we have more staff than in adult hospitals," DeGiusti said.

Earlier this week, the board of directors at Bloorview met to go over the report they'd be submitting to the government. Bloorview, operating out of sites at Bayview and Eglinton Aves., and at Leslie St. and SheppardAve., is the largest children's rehabilitation hospital in Canada.

The centre is already operating as efficiently as it can, says president Sheila Jarvis. Besides reducing costs in food services and housekeeping, the centre is forced to look elsewhere to trim. To do this, they are bringing in consultants to help do things like consolidate patient scheduling.

"The tough part is service consolidation," she said.

One of the hardest calls may be reducing respite services for families. Currently, families caring for children with chronic conditions can send them to Bloorview for temporary care so they can have a break at home.

Reducing outpatient services will also be hard. For example, cuts here will mean children with cerebral palsy will have to wait longer for assessment and treatment.

"We see only the most complex care patients," she said. "Increasing wait times will be difficult."

Construction is currently taking place to consolidate Bloorview into one state-of-the-art hospital site at Bayview and Eglinton