Rabbits had been making themselves at home at the hospital in Clyde, where rabbit holes and droppings could be found on hospital grounds.
Alexandra farmer Gerry Eckhoff, who served three terms as a regional councillor, said it was indicative of an issue throughout the region, where both privately-owned and publicly-owned sites were falling prey to rabbits.
''It's drawing significant problems of a systemic failure ... certainly the virus has been an utter failure.
''Like the Dunstan Hospital which people tell me about, it certainly is concerning.''
The regional council introduced the RHDV 1 ''K5'' virus in March 2018 to deal with rabbits in the region.
He said when combined with the explosion of the wallaby population, it pointed to the local government authority failing to exercise its responsibilities on pest control.
The regional council's rabbit management policy sets out responsibility of rabbit control on landowners.
The Otago Daily Times asked the Otago Regional Council a few specific questions about the hospital's rabbit issues, which were not answered.
However, regional council operations general manager Gavin Palmer said, in a statement, the council's new pest plan announced last week put in place ''good neighbour rules'', which mandate that landowners must undertake pest control measures reflecting their neighbours' efforts on adjacent properties.
''These rules are designed to promote greater co-operation between landowners on managing pests.''
He highlighted rabbit management was the responsibility of all landowners, including the crown.
The Dunstan Hospital site is owned by the Southern District Health Board.
Southern DHB facilities and property general manager Paul Pugh said the hospital had engaged a pest control contractor.
He said the main issue was rabbit holes, which could be a hazard, and grounds maintenance staff were ''keeping an eye'' to ensure pedestrian areas were not affected.
The Southern DHB were happy to collaborate with the ORC and others on any further initiatives, Mr Pugh said.
