The Health Services Union says mental health services at Shellharbour Hospital have been downgraded, forcing the transfer of high-risk patients to Sydney.
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HSU regional organiser Andrew Gorman said the changes meant there were now no high observation beds between Sutherland and the Victorian border.
Mr Gorman said despite the union's call for more high observation beds at Shellharbour Hospital's Eloura West facility, it had been downgraded to a general observation unit last week.
That meant the most severely behaviourally disturbed patients would now have to be transported to Sutherland Hospital or beyond for a higher level of observation, he said.
"Around six years ago when the mental health unit at Shellharbour was a separate unit, Eloura West was a high dependency unit where patients were under 24-hour watch," he said.
"When the mental health unit came under the Illawarra Shoalhaven Local Health District (ISLHD), Eloura West was downgraded to a high observation unit where patients were checked every 15 minutes.
"Now it has been further downgraded to a general observation unit where patients are normally not checked for anywhere between 45 minutes and one hour."
However, a spokesperson for the Illawarra Shoalhaven Local Health District (ISLHD) denied the union's claims.
"There has been no recent change to the level of service provided in the Eloura West unit," the spokesperson said. "And the level of observation has always been determined by a person's individual care plan."
The unit has been in the spotlight since the alleged murder of 47-year-old patient Joseph Gumley by another patient on July 31 this year.
The unit was temporarily closed and remains the subject of police, NSW Health and internal investigations.
It was partially reopened in mid-August with six of the nine beds available for patients.
On Tuesday, Shellharbour MP Anna Watson, Kiama MP Gareth Ward and South Coast MP Shelley Hancock met with ISLHD management for an update on the situation.
Ms Watson said while the meeting was informative, management had not been able to give a time frame for the reopening of all beds.
"I will be writing to the Minister for Mental Health [Jai Rowell] and demanding the three beds be reopened immediately to help cater for mental health issues in this community," she said.
"I will also be calling for this government to open up inpatient services in the Shoalhaven."
Mr Gorman said lack of high observation beds meant mental health patients had to access services in Sydney, which inconvenienced both them and their families.
He said high suicide rates and an ice epidemic throughout the region meant there was more demand for high observation beds, or a return to a high dependency unit.
People with mental illness have access to a broad range of services on the South Coast according to an Illawarra Shoalhaven Local Health District spokesperson.
These include early intervention, emergency care, assessment, rehabilitation and residential facilities.
There are specialist services for children, adolescents, youth, adults and older people, Aboriginal and Torres Strait Islander people and those from non-English speaking backgrounds.
The mental health facilities include:
■Community residential facilities at Dapto and the newly opened sub-acute mental health unit at Shoalhaven Hospital, which provides a short-stay community-based residential service.
■At Wollongong Hospital there is a general adult inpatient unit, a psychiatric emergency care centre and a dedicated inpatient unit for older people.
■On the Shellharbour Hospital campus there are four mental health units; one observation unit, two general inpatient facilities and an adolescent psychiatric care unit. There is also a rehabilitation unit.
■The mental health service also provides a comprehensive range of non-inpatient services in both outpatient and community settings, including community mental health services and support services.
■There are also specific programs providing services to consumers, family and carer support and health promotion activities.