Mr Whitney said Mercy's chemotherapy service should be established within three months, subject to the board's approval next month.
The move may affect the Southern District Health Board's hopes to cater for public-hospital patients who want to pay for unfunded chemotherapy drugs. In March, Health Minister Tony Ryall was asked to consider the proposal by the old Otago and Southland health boards.
A spokesman for Mr Ryall told the Otago Daily Times yesterday Mercy's plans were a "complicating factor". It is not known when a decision will be made.
Mr Whitney said Mercy already offered support chemotherapy, used in conjunction with surgery or other cancer treatments. Mercy has one oncologist on staff.
Three Dunedin oncologists had indicated they would be interested in working for the new service, possibly splitting their time between the public and private sector, he said.
Expressions of interest have been sought for experienced chemotherapy nurses.
What was proposed was a comprehensive chemotherapy service, which would start small but grow over time, Mr Whitney said.
Mercy would still not offer radiotherapy on-site because of large establishment costs.
He could not talk about the cost per patient, saying this was driven by the price of drugs.
Asked if the DHB's proposal was a factor in Mercy's plans, Mr Whitney said it played no part.
Regardless of a pay-for-drugs system being available, some people would opt for the private over the public system anyway, he said.
At present, private cancer patients were having to travel for chemotherapy, and some may be using the public system because there was no private option in Otago or Southland.
Having cancer was an especially challenging time in a person's life. It could last months or even years. The length of illness meant the burden of travel was especially difficult for patients and their families, Mr Whitney said.
St George's Hospital, in Christchurch, was providing mentoring support to assist Mercy set up the service.
SDHB emergency, medicine and surgery group manager Dr Colleen Coop said wait times for chemotherapy were up to two weeks.
