Healthcare stakeholders involved in the development of a co-located hospital say the government must approve a bid by Calvary Healthcare by the end of November, or see the project offered up for public tender.
Premier Peter Gutwein announced in April the state government would support the unsolicited bid from Calvary for a co-located hospital as part of its $156.4 million health policy.
At the time, Mr Gutwein said the government would set a memorandum of understanding with Calvary to progress the $100 million bid.
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A Calvary spokesperson said since signing the MOU, the health provider had continued to develop their plans for the co-located private hospital, and hoped to lodge plans for the facility in the coming months.
Australian Medical Association Northern Tasmania chairman Dr Glenn Richardson said under the current agreement for the no tender bid, the state government and Calvary had until the end of November to finalise an agreement before the government would move to a public tender process.
Health Minister Jeremy Rockliff confirmed that while the current bid was still subject to negotiation, the next milestone was the signing of an agreement between the two parties, which was expected to take place before the end of the year.
Dr Richardson said while the current bid from Calvary was well advanced, there were still questions around which services the campus would provide.
"The services are being debated at the moment, exactly what will be truly co-located and what will be serviced on a land bridge on level four, over the road between the two campuses," he said.
Mr Rockliff said the Calvary proposal included both overnight and same-day beds, with services including palliative care, mental health, post-natal services and elective surgery.
A spokesperson for Calvery said their goal was to provide surgical, medical, same day and sub-acute services in line with their current operations, but advised the new facility would enable them to increase their capacity with more operating theatres and patient spaces.
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Dr Richardson said while palliative care, mental health and post-natal services were all required, the priority should be on reducing congestion and ramping at the LGH's emergency department.
"I think the absolute number one important service is being able to admit medically ill patients from the emergency department of the LGH," he said
"Bed-block is a real thing, and you only have to drive past the hospital and see ambulances ramped, or walk into the ED and see the place full of admitted patients.
"The ED is being looked after by staff whose job is to be an ED doctor or nurse, but they're actually looking after admitted patients."
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