A medical specialist has warned the Government's plan for a billion-dollar hospital in Dunedin could prove "financially disastrous" if it co-funds the build with the private sector.

Ian Powell, executive director of the Association of Salaried Medical Specialists (ASMS) said while a new public hospital for Dunedin was long overdue, it needed to be "fully funded by the Government instead of allowing private investors to profit at the expense of patient care".

Mr Powell's comments come after Health Minister Jonathan Coleman on Saturday announced the $1 billion-plus hospital - what will be the largest rebuild of its type in New Zealand's history.

Mr Coleman said given the size of the project the Government would consider all funding options, including a private-public partnership (PPP).



Mr Powell said opting for a PPP would be part of a wider pattern of privatisation by stealth, seen also in Westport and Christchurch, which was "of great concern to senior doctors and others".

"If the Government goes down this track then it would essentially be handing over the keys for one of the country's biggest public hospitals to private investors to maximise extracting profit for themselves."

He said much of these profits would come from repayments the Southern District Health Board would be forced to pay out of its increased annual operating expenses.

"The winners are private investors through profit extraction and the Government's financial books. The losers are patients with the increased risk of deterioration of services and increased barriers to timely access for treatment."

He said PPPs had been tried in the United Kingdom and proved "financially disastrous".

"Decisions about our hospitals and health services need to be driven by the needs of our communities, rather than ideological support for privatisation."

ASMA had previously raised concerns about the funding model for a new medical centre in Westport.

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