Colonoscopy access in Otago has been under scrutiny in recent years because of the hospital's current inadequate facilities.
The facilities were described as "inadequate and unsafe for nearly 20 years" by Dunedin gastroenterologist Emeritus Prof Gil Barbezat in an email released to the Otago Daily Times by the Southern District Health Board under the Official Information Act last month.
Earlier this year, the Southern District Health Board confirmed its plans to improve the situation had been set back when the University of Otago declined to share the cost of providing additional facilities.
Now it has been confirmed the children's ward - which is moving from the paediatric pavilion to the main hospital - will be redeveloped, with two outpatient endoscopy procedure rooms, gastroenterology clinical leader Prof John McCall said.
This would greatly relieve pressure on the eighth-floor endoscopy facility, which could focus on inpatients and complex procedures.
Last year's National Health Board joint assessment report described the eighth-floor endoscopy facility as poor, not conducive to good and safe clinical practice, and having a risk of infection, a lack of timely access and lack of patient privacy.
Serious concerns raised in 2009 by GPs about the lack of access to colonoscopy in Otago was part of the reason the NHB ordered a wide-ranging review of Dunedin Hospital.
A big effort, which included increasing staff and upgrading equipment, saw the service exceed this financial year's target of 800 Otago colonoscopies, performing 1000.
"We've pushed the current facility to its limit," Prof McCall said.
He was proud the service was treating as many patients as possible, rather than just meeting a government target.
Other progress included adopting national referral criteria rather than "idiosyncratic Otago criteria" .
However, he warned the service "can't go from zero to a hundred in five seconds".
Prof McCall said that the development could not start until paediatrics moved at the beginning of 2014, as part of the Dunedin and Wakari hospitals' master site redevelopment.
Costing up to $2.5 million, the outpatient endoscopy suite would be ready by the middle of 2014 at the earliest.
Last year, the DHB hoped to partner with Otago University to build a joint new facility above the Dunedin Hospital lecture theatres.
That "unrealistic" plan would have cost $5 million, of which the DHB wanted the university to pay half.
The plan was part of "strategic" partnering with the university for the joint gastrointestinal diseases centre of excellence, an alliance still firmly in place regardless, Prof McCall said.
Asked whether drawn-out negotiating between the DHB and the university wasted time, Prof McCall said it was time to move on.
"I don't want to go back into the past and litigate things that can't be changed, and actually dragging them up is not helpful for going forward in the future.
"The bottom line is the [Southern] DHB have come to the party, have taken the needs of rehabilitating the gastroenterology service seriously."
Prof McCall said population-based screening for bowel cancer was likely in the foreseeable future, adding impetus to the need for new facilities.
The DHB was also establishing an outpatient clinic for colonoscopy at Dunstan Hospital.