Africa's only dedicated children's hospital, Red Cross in Cape Town, will have to take the drastic step of closing its doors to sick children for three months if it is to stay within budget for this financial year.
This warning comes as Western Cape hospitals face huge service cuts as they run out of funds.
At a crisis meeting at Red Cross Children's Hospital this week, provincial hospital chief Tom Sutcliffe attacked the government for spending money on corvettes instead of children.
The head of paediatrics, David Power, said the hospital needed to save R7,3-million by March.
With operational budgets already cut to the bone, its only option would be to stop delivering a service.
Addressing a packed meeting of concerned staff, he said key medical and technical staff had gone, strategic equipment was not working, beds had been closed and services were failing.
If the hospital, which has garnered huge public support, was shut over the millennium celebration period the Cabinet would maybe take notice, he said.
Dr Sutcliffe, the provincial head of health and social services who was invited to hear about the plight of the ailing hospital, said he was "disturbed" by the country's apparent lack of commitment to health care.
There was an upswing in economic growth, the deficit before borrowing had dropped, and yet the extra money was spent on corvettes.
"We thought it would go to education and health," he said.
This week Dr Sutcliffe said his department had run out of cash and Western Cape state hospitals would have to cut back even more because predictions were that by the end of the year accumulated debt would be R80-million.
He believed this was a short-term cash crisis and that an unexpected high increase in trauma cases had led to the shortfall.
Some beds and facilities would close, cardiac surgery would be reduced and non-emergency operations would be delayed.
No staff would lose their jobs.
At the meeting, Dr Sutcliffe admitted the voluntary severance package, the tool used to "right-size" the public sector, was "blunt", "dumb" and "unintelligent".
He said the department had not taken into account the United Nations Convention on the Rights of the Child in this budget but he had instructed the budget committee to do so as a "non-negotiable" in the next budget.
At the meeting, Professor Power said while there was no waiting list for cardiac surgery two years ago, it now stood at 120 patients.
The problem with babies with heart abnormalities is that they cannot wait. They are prone to lung infections and heart failure if operations are not performed at this crucial time in their lives.
Paediatrician Louis Reynolds said South Africa had ratified the UN Convention on the Rights of the Child and in so doing had made a legal and moral commitment to ensure that the health and development of children is a national priority.
He said Section 28 of South Africa's Constitution devoted a section to the "best interests" of the child.
He questioned whether the health department was aware of these articles and whether it had given priority to children in the allocation of scarce resources.
Dr Reynolds said government had to submit a detailed report every five years to the convention committee which concerned itself with whether cuts in public spending linked to fiscal adjustments took adequate account of the resulting impact on children.
Trainee-specialist Jonny Taitz, who works at Red Cross, said the Department of Health spoke of cutbacks and moratorium on posts last year but that this "dip" would even out by this year and there would be growth.
"We bought this line as a hospital, as professionals and as members of trade unions. Now there is deep disappointment that nothing has changed 18 months later. There is no growth and instead more cutbacks. Enough is enough. We are here to save lives," he said.
Dr Taitz said the shocking state of health services made a mockery of Health Minister Manto Tshabalala-Msimang's launch this week of a Patients' Rights Charter.
"I don't think we are extravagant. We have been cut to the bone. If there is no money then provincial Premier Gerald Morkel and Dr Tshabalala-Msimang must tell the people that we cannot deliver a service.
"We cannot buy equipment and we are cutting posts. We cannot even train medical doctors and nurses. We have to come clean."
Dr Taitz added that when President Thabo Mbeki said the "people have spoken" after the election, one of the things they spoke for was adequate health care and it was the government's responsibility to deliver.
Provincial health minister Nick Koornhof said Dr Sutcliffe's announcement had been made to protect workers from disgruntled patients.
Negotiations with the provincial treasury were continuing to get a realistic budget for the next three years.