Neerim District Health Services wants State Government capital funding to expand its services to meet the needs of its growing population and an increase in tourist visits, often to undertake adventure activities that present injury risks.
NDHS board chair Sean Dignum said it was seeking grants through the Regional Health Infrastructure Fund to construct a second operating theatre, day procedure centre and additional consulting rooms at the Neerim South hospital.
"We are also looking for money to provide emergency care" to provide initial treatment for people suffering sudden illnesses or accidental injuries that otherwise would need to travel considerable additional distances to a public hospital.
He said that as well as servicing its own catchment area - predominantly areas in Baw Baw Shire north of Princes Highway - the hospital was also catering for an overflow of public hospital elective surgeries from West Gippsland Hospital at Warragul and Latrobe Regional Hospital at Traralgon.
"We handle about 2000 cases a year from Latrobe".
The operating theatre is working six days a week and a second theatre would further reduce the strain on West Gippsland and Latrobe, Mr Dignum added.
Last financial year the NDHS, that also offers aged care accommodation and community health services, had an operating loss of $143,000.
That was more than double the $69,000 deficit in the previous year.
Most of its revenues come from services it provides supported by local fund-raising efforts and donations.
In his annual report on the 2020-2021 financial year Mr Dignum said COVID had heavily impacted the services provided and revenues.
He wrote that "achieving financial stability had been a critical challenge for decades".
"The resulting uncertainty has been a threat to our capacity to continue to provide health services for the community".
However, Mr Dignum said he was confident of the NDHS' future and the board had no thoughts of shutting down.
Last year it received government funding of $1.5 million from state and federal governments to install a solar powered electricity system, upgrade the existing operating theatre and improve internal communications.
Mr Dignum said the needs of the growing district community were changing.
A number of years ago the prediction was that much of the population growth would be in older people, but the demographic is changing with many younger families moving to the area.
Local school enrolments are rising considerably, he said.
Mr Dignum said the operating losses needed to be seen in the context that the NDHS was a not-for-profit service that reinvested in its community.
The Neerim South hospital is one of only two remaining from 60 initially established in Victoria as bush nursing hospitals.
A public meeting in 1927 decided to build the Neerim district's first hospital which opened the following year and the current hospital building was opened in 1967.