The WA premier has denied the government was abandoning plans for Royal Perth Hospital's future after admitting the building might need to be torn down.

The West Australian premier has conceded that the Royal Perth Hospital building may need to be demolished, but has promised to keep a central city hospital in Perth.

WA Treasurer Mike Nahan told AAP on Wednesday that demolishing the outdated building was a possibility despite a commitment to spend $180 million on revamping the hospital.

"We received advice that fixing it up could be more costly in an operating sense than tearing down and replacing it," he said.

"If you design a modern hospital from scratch, they're much more efficient and effective than an old one that's been built in a hodge-podge manner."

On Thursday, Premier Colin Barnett said Dr Nahan might be right, but Royal Perth Hospital would continue.

"A lot of the wards there and the buildings are old, but there will be a central city hospital and that will be Royal Perth and that will continue under this government," he told Fairfax Radio.

Mr Barnett denied claims that the government was abandoning plans for the hospital's future.

He said health budget finances were being concentrated on Fiona Stanley Hospital, the Perth Children's Hospital and the new hospital in Midland that was due to open later this year.

Upon completion, the government would determine what level of medical services would be provided at RPH, Mr Barnett said.

In last week's state budget, $19 million was allocated for critical maintenance at RPH this year, but the forward estimates show no funds for redevelopment.

The opposition said a responsible government would have planned to honour its election commitments.