TORONTO - Ontario's cash-strapped hospitals are trapped in a "downward spiral" and will keep bleeding red ink if the government doesn't step in to help, opposition leaders warned Monday.

More than a third of Ontario's hospitals -- 38 per cent -- spent more than they took in last year, resulting in a $107-million shortfall, according to figures compiled by The Canadian Press.

That's largely unchanged from the previous year, when 61 hospitals reported deficits amounting to $154 million.

The province's 159 hospitals are forbidden from running deficits by law, but they can get a waiver if they come up with a plan to rebalance the books.

More hospitals will likely end up in the red next year because the government is cutting back on funding, said NDP Leader Andrea Horwath.

"This seems like more of the same, but what that translates into -- as we know -- is cuts to nursing positions, closures of emergency wards in smaller communities, loss of various clinics and other services that used to be provided in hospital," Horwath said.

"It's a downward spiral in terms of people's access to quality health care."

Hospitals have seen an almost 50 per cent increase in funding since the Liberals took office in 2003, which has led to improvements in some areas, such as surgical wait times, said Health Minister Deb Matthews.

"The hospitals know that their responsibility is to work within their budgets," she said in an interview.

"I think it's important to think about this as way more that just about money. It's about getting results for that money."

The province's hospitals receive about 85 per cent of their funding from the government through the province's local health integration units (LHINs), which were set up by the Liberal government to make local health-care decisions and dispense public cash.

Hospitals received a 2.1 per cent increase to their base funding from the government in the fiscal year that ended March 31 -- less than inflation. This year, it will only be 1.5 per cent.

That's going to put "significant pressure" on hospitals, which could be relieved if the government makes "appropriate investments" in nursing homes and community care to move people out of hospital beds, said Opposition Leader Tim Hudak.

Instead, taxpayers are seeing spending scandals at places like eHealth Ontario, which rocked the governing Liberals last summer after it was revealed that $1 billion was spent to develop electronic health records with very little to show for it.

"Sadly, (Premier) Dalton McGuinty's priority seems to have been to spend a billion dollars in the eHealth boondoggle and $200 million on the unaccountable, undemocratic LHINs that, by the way, don't put one minute into patient care, don't deliver in a single surgery or don't care for one individual patient," the Conservative leader said.

"We'd put the money to front-line health care, not bureaucracy."

The largest hospital deficits were Peterborough Regional Health Centre at nearly $14 million, Sault Area Hospital with $13.6 million and North Bay General Hospital with $10 million.

Northern hospitals appear to be falling behind more than their southern counterparts. In the four most northern regions of the province, 31 hospitals were in the red, up from 20 in the previous year.

Making ends meet is forcing some hospitals to make major sacrifices, said Horwath.

Earlier this month, a sex assault victim in Ottawa had to seek treatment in Renfew because her local hospital -- home to the city's only provincially designated program for sex assault cases -- didn't have any nurses available, she said.

"What we understand is this is not the only place that this is happening," Horwath said.

Matthews said hospitals received an overall funding increase of 5.6 per cent last year -- due to extra one-time payouts to fund certain programs and services -- and will receive a 4.7 pert cent increase this year.

Payroll expenses are also expected to shrink as hospitals implement public sector wage freezes imposed by Finance Minister Dwight Duncan to deal with the government's $19.7-billion deficit, she said.

Some hospitals received significantly more than others, however. Niagara Health System, which had the largest deficit in Ontario a year ago and had gloomily predicted years of shortfalls, ended up with a $19-million surplus at the end of March.

The Hamilton Niagara Haldimand Brant LHIN attributed the surprising turnaround to $49 million in provincial cash injections.

There may be cash available for other hospitals who find themselves in dire straits, but there's a caveat, Matthews said.

"We don't go in to bail out a hospital that hasn't been managed well or has been ignoring their requirement to balance their budget," she said.

"But if in fact they can demonstrate that to provide the services to their community, they're not getting the right amount of funding, then we look at it very closely."

If Matthews wants to reduce health-care expenses, she should cap the enormous salaries of hospital executives, Horwath said.

"There's all kinds of places that there needs to be some hard action taken and this government doesn't seem prepared to shake those trees," she added.