The future of the region's entire health network hangs on whether Shellharbour Hospital will be rebuilt from scratch on a new site.
A decision from the NSW Government on whether the hospital can be relocated to a bigger, more convenient site is pending, after the Illawarra Shoalhaven Local Health District board put in a proposal six weeks ago.
Board chair Denis King said if the district gets the green light to move the hospital to a greenfield site, it will have major ramifications for every other hospital in the district.
"The original proposal for Shellharbour's redevelopment was $251 million, with another $250 million to be allocated down the track," he said.
"Given the $128 million in federal funding announced in May we're now looking at some $630 million which is plenty for what we want to do.
"That kind of significant redevelopment of Shellharbour would enable us to take a good look at the role of all hospitals across the district - including Wollongong, Shoalhaven and Port Kembla.
"And, through consultation with clinicians, we can work out the best way of providing critical services across the whole district that work well into the future."
Port Kembla hospital is one of the main puzzle pieces. Opened in 1965, the facility provides care to almost 8000 patients each year but its future is unclear.
"Port Kembla hospital has a local community function, and it's also long been the major palliative care and rehabilitation hub for the district," Professor King said.
"However the evidence now shows that separating these from acute services - from the places we treat people for strokes and heart attacks and cancer and so on - can slow the process down and impede recovery.
"So for instance if rehabilitation can go back into major complex hospitals it's much better for someone who's had a heart attack who needs cardiac rehab to have it all done in the same building."
ISLHD chief executive Margot Mains said a project update would be issued once it was decided how the additional federal funding would be spent.
"As part of the redevelopment and the LHD's usual planning we will investigate opportunities to relocate some services from Port Kembla Hospital to either Shellharbour or Wollongong Hospitals where appropriate in order to improve the inpatient access to acute services and other more modern facilities and diagnostic services," she said.
Prof King stressed that Port Kembla Hospital would always deliver community health services, but said district management would also consider moving into a new facility - closer to the main shopping centre in Warrawong.
Wollongong MP Paul Scully said any solution needed to ensure the health needs of the local community were met.
"There's two options for Port Kembla hospital - either improve it or replace it," he said. "We need services to remain that meet the needs of the community - and that can also integrate with the whole network."
Mr Scully also called on the government to make a decision regarding Shellharbour's future, so plans could be put in place for other facilities.
"We also need to consider how other facilities can take the pressure off Wollongong hospital, which will always be the region's main health hub."
A spokesperson for NSW Health Minister Brad Hazzard could not comment on when a decision would be made on Shellharbour Hospital's relocation: "Any proposal from the Local Health District will be considered by the Ministry of Health and the NSW Government and a decision made in due course".
Need to 'future proof' Shellharbour Hospital
More space - and better access - that's what a new site for Shellharbour Hospital must deliver.
ISLHD board chair Denis King said the district had not identified a specific site for Shellharbour Hospital's relocation, but said it would be not be "significantly north or south" of its current site.
"We want it to be adjacent to the major road south and the railway, so it would need to move to the west," he said.
"We want to get the best facility in terms of public access, and we know easy access by rail would also help with parking problems.
"We'd also be looking at a larger site. While the current site is 7ha, the sort of facility we're thinking of would need 20 or 30ha so it can be expanded well into the future."
Construction on the redevelopment of the hospital is underway at its current location. However Prof King said only a small percentage of the budget had been spent.
"The contracts in place will be completed," he said. "The awarding of any new contracts will depend on the decision to relocate."