Health Minister Sarah Courtney has promised the $11.79 million cuts to the health budget will not impact the delivery of frontline health services.
"We're going to make sure that as we find these savings we are going to be doing it through natural attrition, vacancy control, looking at travel and those type of things to ensure that our frontline service delivery isn't impacted," she said.
Ms Courtney would not give specifics on where the cuts would be felt but said the government's job was to make sure it did not "impact on frontline service delivery for Tasmanians".
Tasmania's Australian Medical Association vice-president John Davis disagreed the funding cuts would not effect health services and said the budget was "already overstretched".
"There is simply no room for any cuts to health funding without causing catastrophic damage to already overstretched services," he said.
"How can you take money out of a system when there are still ambulances ramping at our major hospitals, people staying too long in the emergency departments due to lack of in-patient beds and patients are being left languishing on the elective surgery waiting list?"
Ms Courtney said in the past five years a 1000 recruits and 130 beds had been added to the health system, with more beds to be opened next year at the Royal Hobart Hospital.
She said it was a "small saving" in the context of the $2 billion state budget but would not comment on how much the government asked the department to cut.
"I've been quite clear that the government is continuing to invest more money in health, we're investing $550 million," she said.
"We are continuing to invest but we are also making sure that we are managing our broader budget responsibly and that's what Tasmanians would expect of us."