Senior doctors say the long-standing problems at Dunedin hospital cannot be solved without extra Government money.
Earlier this month, a National Health Board report highlighted serious leadership failures and a split between managers and clinical staff.
When the report was released, Health Minister Tony Ryall said the main problem was the hospital's culture in which doctors and other clinicians were disempowered.
A letter written by 26 of the hospital's senior medical staff says financial pressures have been at least as destructive.
The group's chair, David Perez, says the culture has been largely created by the cost-cutting, coming after more than a decade of district health board deficits.
Associate Professor Perez says Mr Ryall will have to release funds for the situation to improve.
"The Government's financial situation is constrained as well, so they don't have a bottomless pit of money to give to DHBs, so perhaps he's trying to downplay the request for further money.
"But we would definitely see it as equal contributor."
Mr Ryall has not responded directly, though he says the Southern DHB has already received an extra $71 million in the past three years and must use the money wisely.