A series of "catastrophic" clinical and governance failures may have contributed to the deaths of seven babies at a regional Victorian hospital, an independent investigation has found.

Key points: Seven baby deaths at the hospital may have been avoidable

Seven baby deaths at the hospital may have been avoidable Hospital's board and head of obstetrics sacked

Hospital's board and head of obstetrics sacked Probe finds "shocking" governance and clinical failures

The review of 10 stillbirths and newborn deaths at Bacchus Marsh and Melton Regional Hospital in 2013 and 2014 found that seven may have been avoidable.

The hospital's former director of obstetrics, Surinder Pahar, had conditions placed on his registration in June, following a 28-month investigation by the Australian Health Practitioner Regulation Agency (AHPRA).

He was reported to AHPRA by another doctor in 2013 and has since retired.

Health Minister Jill Hennessy demanded AHPRA explain why the investigation took so long, and why the Health Department and Djerriwarrh Health Services, which runs the hospital, were not told about the conditions.

"What has happened here has been a series of catastrophic failures by a number of parties that may have contributed to the very sad loss of young life," she said.

"There is nothing that will ever mend the loss of losing a child, and to learn that that death may have been avoidable, but for a series of system failures, can only compound that loss and pain."

Ms Hennessy said the agency was only required to notify the hospital once action had been taken against a health practitioner.

"It's simply not good enough," she said.

"It is difficult to be convinced how this could possibly be in the interests of patients."

The department knew about the investigation in 2013 but failed to ensure maternity services improved, Ms Hennessy said.

Staff had 'inadequate skills, lacked quality education': report

The review led by Professor Euan Wallace found the perinatal mortality rate at the hospital was significantly higher than the state average and much higher than expected for a "low risk" unit.

He also identified misuse or misinterpretation of foetal heart rate monitors by "inadequately skilled" staff and a lack of "high quality staff education" as key problems.

Sorry, this video has expired Victoria's Health Minister Jill Hennessy reveals details of hospital probe

Ms Hennessey said reviews of perinatal deaths at the hospital were also inadequate and the board was not told about some of the deaths.

She said the families could be entitled to compensation for the "shocking failures".

"Nothing can change the past for these families, nothing can lessen the pain, the distress and the anger of those families who have lost babies," Ms Hennessy said.

"This new information will reopen and compound their sense of loss, but without this information, we will not be able to stop something like this happening to others."

Families receive apology, ongoing support from Djerriwarrh

Consultative Council on Obstetric and Paediatric Mortality chairman Professor Jeremy Oats said three or four "unavoidable" infant deaths would normally be expected at a health service of that size.

"The overall perinatal mortality [rate] in Victoria is one of the lowest in the world," he said.

"We have a very safe service and that's what makes this one so unusual and so tragic."

Djerriwarrh Health Services said it had taken significant steps to address the factors that might have contributed to the stillbirths and newborn deaths.

Dr John Ballard, who was appointed to the board earlier this year as a delegate of the Health Minister, said the service was committed to looking after the women whose babies died and ensuring maternity care was safe at Bacchus Marsh.

"Everything that can possibly be done to ensure the well-being of the women and families whose babies died during this period, is being done," he said.

"Each family is being given a full explanation about what happened, an apology, and intensive support including experienced counsellors."

Dr Ballard said the hospital had already introduced new leadership, equipment and clinical governance, and additional training and education for staff.

"We assure all mothers and their families that the steps we have taken will safeguard reliable and effective maternity services at Djerriwarrh Health Services," he said.

Midwives 'ostracised' for reporting risk

Australian Nursing and Midwifery Federation Victorian secretary Lisa Fitzpatrick said concerns about a lack of staff, policies and equipment at Djerriwarrh's maternity services were raised with the Health Department last year.

"It's been, I think, a maternity unit that's been plagued with some serious issues for some time," she said.

"I think people want to make sure that what has happened never ever happens again to any woman or family in this state ever."

Maurice Blackburn lawyers are poised to launch Supreme Court action on behalf of the parents of a baby who was born with a hypoxic brain injury and has a disability.

"In the Supreme Court we will be seeking damages for the care that this child will need in the future and the equipment because of the extent of their disability," lawyer Dimitra Dubrow said.

Ms Dubrow said the firm had spoken to three families whose babies had died at the hospital.