The Tasmanian Government wants a new private health organisation to operate the Hobart Private Hospital.

Negotiations with current operator Healthscope have hit a stalemate, so the Government is looking elsewhere.

“We would like to see more health services delivered more often, we want to allow more patients to get treatment, and we want to collaborate between two neighbours on the same city block,” Health Minister Michael Ferguson said.

“We want to have a red-blooded competition, and the race is on not just for the highest rent, the race is on for the best services that will support the whole of the health system.”

The new lease is for 10 years, with an option to extend by another 10. The current lease is worth $1.2 million a year.

The new contract may also include requirements like keeping the emergency department open, and penalties for non-compliance.

Mr Ferguson says there has been significant interest from private hospital operators nationwide.

Healthscope will put in a bid, saying: “We are confident we will submit a compelling proposal that will be successful”.

The Australian Medical Association (AMA) says it makes sense to periodically cast a net to ensure the most effective use of the facilities, especially given their role in delivering co-located private hospital services associated with the Royal Hobart Hospital.

Tenders open this week, and the Government says it should announce the successful operator some time mid-year.