One of Melbourne's largest hospitals is planning a dramatic downsizing, with 32 beds to be eliminated, due to lacking state funding.

The Age talked to surgeons at Box Hill Hospital, where elective surgery load will reportedly be reduced by 8 per cent this financial year despite a very high demand.

Box Hill's surgery waiting list had jumped 10 per cent last year, implying a poor performance on elective surgery as hundreds of patients are waiting far longer than state government's benchmark waiting period for medical attention.

With the downsizing, an entire operating theatre and a 32-bed ward would be affected, risking job losses and ultimately cancelling operations on waiting lists.

''It's an extraordinary move. We're only just managing to get our Category 1 [urgent] patients done in 30 days,'' said one surgeon, who asked The Age for identity protection. ''It would be absolutely devastating,'' he said.

''We've become accustomed to having our activities wound back and cranked up repeatedly depending on political pressures at the time and where we are in the government's term of office, but if you have the staff, you've got the capacity. If you close a ward, the nursing staff is no longer there and you can't re-open. It's pretty dire.''

Surgeons told The Age say hospital executives have planned the move because of a lack of funding from the state government for its services this financial year.

Eastern Health chief executive Alan Lilly turned down an interview about the plan, but did not deny it. Instead he issued a written statement saying Eastern Health was reviewing its hospital services and considering a ''re-design'' to deliver more home-based and community care, specifying "no job losses."

''Any decision we make will be in consultation with our staff and their representatives and there will be no job losses,'' he said. ''As a health service, we have a responsibility to provide the most efficient and safe care with the best possible outcomes for our patients. With ever-increasing demand, we are always looking to ensure our services are sustainable."

The Box Hill plan was brought up after The Age revealed the complaints of an emergency doctor at the Austin Hospital, who said the department was overwhelmed and that he feared being sued for inadequate care.

The Age also reported yesterday the Austin had also been cancelling surgery recently because of a shortage of resources.

In a memo to staff last week, Austin chief executive Brendan Murphy said the hospital's surgical team was feeling ''pretty frustrated'' after having to cancel elective surgery in July and August to cope with bed demand.