Budget pressures at the Mersey Community Hospital may worsen with cost-shifting possibly behind the recent move of rehabilitation services, fueling fears of cuts to services in other areas.
The hospital received $80.9 million in 2018-19 and $83.7 million is budgeted for this financial year.
However, this 3.46 per cent budget increase is short of health inflation costs, with the Hobart inflation rate for medical and hospital services 3.5 per cent for 2018-19, and there has been no additional funding provided for the rehabilitation unit.
A Tasmanian Health Service spokesperson confirmed the Rehabilitation Services Unit was being funded from the Mersey's budget.
The spokesperson said the rehabilitation unit employs 9.5 FTE staff and will expand its workforce to 13 FTE when four more beds are opened.
"Allied health and support services staff are in addition to this and we are actively recruiting," the spokesperson said.
This means the Mersey is having to fund the rehabilitation unit, previously part of the North West Regional Hospital in Burnie, and try to maintain existing services while its funding is falling in real terms.
This revelation follows the Health and Community Services Union expressing concern last week about surgical procedures at the hospital being cut back.
Leaked emails to senior hospital staff in May also revealed a directive to cap inpatient beds at 28 as the result of a budget blowout.
Braddon Labor MHA Anita Dow said all reports pointed to a dramatic downgrade of services at the Mersey.
"[Staff] are saying that elective surgery activity at the hospital has been halved which makes a mockery of the government's promise to make the Mersey an elective surgery centre," Ms Dow said.
"We have been told that there have been cuts to urology, ophthalmology and ear, nose and throat surgery. General surgery will also decrease."
Ms Dow said Labor was calling on the government to reopen the eight rehabilitation beds at the NWRH, with an internal THS 2019 project update confirming the decision to close the beds was due to cost.
"[Health Minister] Sarah Courtney appears to be in denial about the impact of her government's systematic underfunding of health, which is undermining services across the state."
Ms Courtney said the move of the unit, with the completion of a $4.2 million ward at the Mersey, has resulted in more rehabilitation beds for the North-West, up from eight to 12.
"This means more service delivery for people living in the North-West," Ms Courtney said.
"The THS has also recruited a rehabilitation specialist to head the new service."