Co-hospital a 'once in a lifetime opportunity', Clifford Craig says

The move came as the associated budget escalations were "insurmountable" for Calvary, according to chief executive Martin Bowles.

Clifford Craig chief executive Peter Milne said after three decades of discussions around the private hospital, he was afraid they were right back where they started.

"When it first became apparent seven years ago, that this had the potential to go forward with the state government and Calvary, this really was one of those once in a lifetime opportunities," Mr Milne said.

"It's so disappointing to find that after seven years, we're back to where we were at again, where Calvary decided to withdrawal from being part of it."

Health Minister Guy Barnett assured Tasmanians the government was still committed to partnering with providers to see the project through.

He said they were progressing with the demolition of a number of buildings at the Launceston General Hospital (LGH) to make way for the co-located private hospital.

Mr Milne said the success of the hospital would ease a number of current health issues in the North.

"First of all, it will help overcome the ambulance ramping straightaway," Mr Milne said.

"There's probably 30 per cent of people in the hospital right now taking up beds, who are privately health insured and could be in the private hospital."

"One of the issues in this city is that the two private hospitals [Calvary St Vincent's and Calvary St Luke's] don't have intensive care units.

"If you have a potentially risky procedure, you won't get it done there because there's no intensive care unit. If something went wrong, you would be put into an ambulance and brought around to the Launceston General Hospital."

He said a state of the art co-located hospital would help with the recruitment of doctors and staff.

"If you're a doctor considering moving to Launceston, it's extremely attractive to have a modern, co-located hospital all on the one site," he said.

"Some people would say a private hospital is only there to help private patients, but it's not about that at all.

"Yes, it will help private patients but what it does is reduce bed block in the public system, but also will actually help attract those doctors to come here and make our city get more access to specialist care."