The Tasmanian premier has conceded that the state's public health department will suffer under new budget cuts.
Lara Giddings released the first quarterly report on the implementation of the June budget last week – one that sees $238 million in savings made.
She recognised that the health department is at risk of falling short of targets.
"There are three agencies that we're keeping a closer eye on and of course the most difficult agency is that of Health and Human Services where there are very difficult and tough decisions that have had to be made as well," Ms Giddings said.
Tasmanians with private health cover are likely to be unaffected by the cuts.
The premier has reportedly approached the Gillard government for assistance, stating that – despite what the budget dictates – health spending will need to increase.
"Health spending is increasing at a rate in excess of ten per cent a year and if left unchecked, it would consume the entire state budget within ten to 15 years," Ms Giddings told The Australian.
"This is clearly an unsustainable situation."
Health policy analyst Martyn Goddard released a report yesterday, stating that a single funding stream needed to be established in order to ensure funding for the state's health system would continue.