Tasmania's only large-scale private mental health clinic, the Hobart Clinic, to close inpatient site by end of October

Tasmania's only large-scale private mental health clinic will be closing down its main site, after years of bleeding cash.

In a statement, the Hobart Clinic said its inpatient site in Rokeby would shut down by the end of October.

The clinic has been providing mental health services for Tasmanians with private health insurance for 40 years.

Dr Stephen Ayre, the organisation's acting chief executive officer, said the decision was made after cash flow projections indicated it was facing a deficit of $3 million this financial year.

"This had occurred as a result of low private health fund reimbursement and the inability for private patients to pay the increasing gap fees," Dr Ayre said.

Dr Ayre said the majority of the clinic's patients are admitted on a short-term basis and the organisat