Serco has been stripped of its contracts for sterilisation services at Perth's Fiona Stanley Hospital, Health Minister Kim Hames has announced.

The Minister, along with WA Health acting director-general Bryant Stokes, also announced a review of clinical services and patient care at the hospital would be carried out.

Dr Hames said he wanted to restore public confidence in the hospital which has been fraught with problems since it opened late last year.

Serco had been issued two breach notices in relation to sterilisation services.

Staff from the Health Department took over supervision of the sterilisation process in February when issues were first raised.

Dr Hames considered the company's response to the most recent notice which followed the discovery of body tissue on sterilised medical equipment before making the announcement.

"We have now formed the view that we are not going to continue [with that part of the contract]," he said.

"Patient safety is more important than trying to preserve that contract."

Serco will retain responsibility for the maintenance and management of sterilisation equipment, but will not sterilise medical instruments or items.

"All the clinical component, that is the management of the sterilisation itself and the liaison through there by theatres, will now be taken over by [the] State Government," Dr Hames said.

'More scrutiny' needed over use of private contractors: Stokes

Professor Stokes said the problems with sterilisation emerged from what had been the largest single hospital project in the state's history.

He said the scale of the planning effort was substantial, but he believed, in hindsight, more scrutiny could have been applied to the use of private contractors to provide critical clinical services.

"In hindsight, I would say yes to the question, but of course it is very difficult, at that time, for people to have made that assessment," Professor Stokes said.

"Because Serco has had a significant reputation, throughout the world, in very high-powered organisations, managing defence aspects in the United States, for example, and other things, which indicate they can be good managers."

Dr Hames said Serco workers would be offered continuing employment by the Health Department.

Serco has accepted the State Government's decision and said it remained committed to the success of the hospital.

"We have worked hard to make improvements in the service, including recruiting additional staff, improving processes and increasing training. However, we recognise that WA Health believes that it be in the best interest of the Fiona Stanley Hospital if it were provided by them," Serco said in a statement.

"While it is disappointing that full responsibility and delivery of the sterilisation service is going to revert to WA Health, we are absolutely committed to working with them to successfully transition the service and the associated people, as well as fulfilling our ongoing responsibility for procurement, maintenance and repair of instruments."

Serco said it would focus on delivering high standards of performance across all of the company's remaining 24 non-clinical services at Fiona Stanley Hospital.

Clinical services review

The Health Minister also announced a 15-day expert review of clinical services at the hospital following a series of highly publicised patient complaints about treatment at the hospital.

Professor Stokes said the review would seek to determine if these were isolated incidents or part of a deeper problem.

WA Health acting director-general Bryant Stokes says the review would determine if problems at the hospital were isolated. ( ABC News: Andrew O'Connor )

"The scope of the review is to do a snapshot to determine whether there are major issues which need significant addressing," he said.

He said so far, there had been 53 complaints at Fiona Stanley Hospital, dealing with access to services and quality of care.

Despite the scrutiny on Fiona Stanley Hospital, he said that figure was low in comparison to other hospitals.

He cited another hospital, which he declined to name, which had 263 complaints from July 2014 to March this year.

Heading the review team will be the clinical director of the Australian Commission on Safety and Quality in Health Care, Dr Robert Herkes.

The team also includes director of nursing of the New South Wales Concord Repatriation Hospital, Dr Sharne Hogan, and consumer advocate and former WA Health Consumers' Council chief executive Michele Kosky.

Ms Kosky said she would use the review to talk with health consumers and their families about their experience at the hospital to determine what aspects of its operations could be improved.

Serco 'are not able to run a public hospital', union says

United Voice state secretary Carolyn Smith, whose union represents sterilisation technicians, said the decision came as no surprise.

"Serco have shown time and time again, they're not able to run a public hospital and they're not able to run a sterilisation department," she said.

"We're being told by the Health Department this has nothing to do with any of the individual workers and they will be transferred across to the Government hospital."

There are about 50 technicians in the sterilisation department.

Ms Smith said the department was planning on hiring more sterilisation technicians.

"I think that shows one of the key problems with the Serco contract," she said.

"In an attempt to make a profit, Serco has been cutting the staff even in an area as important as sterilisation."

The State Opposition has called for a parliamentary inquiry into issues at the hospital.