COLAC Area Health considered its options and decided closing its emergency care overnight was the best move to rein in budget woes.

The board considered limiting elective surgery and cutting drug and alcohol services but decided to close the hospital's emergency urgent care would close from 10pm until 7am.

Colac Area Health chief executive Geoff Iles told the meeting of up to 200 people at the Colac Civic Centre that closing this service at night wasn't a decision taken lightly.

"We identified services that would impact on the least number of people and staff and meet the full saving of $255,000 per year in particular the $1 million-plus saving for the next four years," he said.

The closure will commence on Friday and there will be only one ambulance available to take people to Geelong.

Concerned residents told the meeting they were worried they or their family would be denied treatment if they arrived at the hospital during these hours as the doors would be locked.

Mr Iles told the crowd, that included business owners, government representatives, emergency services and hospital staff, that an alarm or bell could be rang and staff would come to access the patient.

He said there were still procedures and protocols in development for dealing with this situation, but insisted life-threatening illnesses would be dealt with.

Mr Iles responses were met with a chorus of "how?" from the crowd.

Residents asked questions about potential life threatening scenarios which included turning up to the hospital with asthmatic children or someone presenting with mental illness.

Federal member for Corangamite Darren Cheeseman was reminded by local businessman Chris Quinn that he was in one of the most marginal seats in the country.

"Man up and fix it or loose your bloody seat," he threatened.

Local State Government representative Terry Mulder was also put under pressure asked by local businessman Anthony McDonald how the Colac community can express its dissatisfaction in the board of CAH, which is appointed by the state government.

Both politicians blamed each other, Mr Cheeseman said the Victorian Government had cut $616 million from its health budgets, while Mr Mulder said the Federal Government was pulling-out $255,000 worth of local funding for the next four years.

Mr Mulder said he had assurances from the CAH board that if someone presented to CAH between 10pm-7am with a life-threatening condition they would be seen.

Mr Cheeseman said he would advocate to both state and federal governments on this issue.

The meeting also heard CAH had a $1.7 million deficit and if it weren't for this significant black hole the requirements for plugging the $255,000 annually might have been easier to meet.