It is understood consultants and Australian construction giant CPB this week completed a cost-saving exercise triggered in July when an initial price for the inpatient building came in significantly over budget.
Health New Zealand Te Whatu Ora (HNZ) has been presented a list of options for savings that could be made by reducing service levels, which include cutting total floor size and retaining some services at the old hospital site.
The government last month said it was deciding between a cutback inpatient building on the Cadbury site or a retrofit of the old hospital.
Yesterday, Health Minister Dr Shane Reti declined to comment on any progress.
"Our government is absolutely committed to building a new hospital in Dunedin.
"I want to assure the people of Dunedin and the South, clinicians and health workers, that Health New Zealand and ministers are fully committed to making sure we deliver long overdue solutions to their region’s health infrastructure."
It comes as a letter from clinicians, signed by 44 clinical directors, is addressed to Dr Reti, Infrastructure Minister Chris Bishop and Prime Minister Christopher Luxon.
"We write in our capacity as clinical directors across Dunedin and the whole southern region to express our deep concerns at the recent government announcements relating to further changes and consequent delays to building the new Dunedin hospital," the letter said.
"Dunedin hospital must continue to provide a strong regional tertiary service and be at the forefront of clinical training for the country’s emerging medical professionals.
"We believe that the proposed changes to the new Dunedin hospital pose a significant threat to achieving these goals."
The government has set the budget for the project about $1.9 billion, but this does not include the pathology building or car parking.
"We are concerned that the proposals to achieve cost savings at this late and time-pressured stage risk leaving the new Dunedin hospital in a clinically and operationally precarious state, and we will fail to realise those savings.
"The major review two years ago is a good example, resulting in an unacceptably small area for pathology services and now a disproportional cost required to mitigate this decision."
Last month, the ODT reported HNZ was in discussions with the contractors over possible clinical cuts to the hospital project.
At the time, proposed cuts discussed included a reduction in emergency department beds and downgrading operating theatres, along with removing wall-mounted medical gas in some theatres and having only one high-spec "hybrid theatre" on opening, instead of two.
The letter appeared to express concern about this and other moves to down-scale the project.
It also backed appeals by the University of Otago and Otago Polytechnic Te Pūkenga to ensure the new hospital fulfilled its role of being a teaching tertiary hospital.
It expressed concern that "value management exercises" had already reduced the "floor space" to a level that peer reviews showed were the minimum required to service the region.
"The growth in the Queenstown-Lakes catchment of the new Dunedin hospital will exert further pressure.
"Supporting appropriate regional services relies on adequate access to acute specialist services for our rural patients."
Proposals to retro-fit parts of the existing site were also criticised.
"We also urge extreme caution when considering any proposal that attempts to extend the clinical working life of the 50-year-old Dunedin Hospital ward block.
"Recent experiences with even modest refurbishments resulted in a cascade of knock-on adverse clinical ramifications and patient risk across multiple floors of the hospital."
