A community hospital could open in Oxford as part of a major initiative to upgrade healthcare for the city’s elderly that may help in the county’s fight against bedblocking.

Feasibility work is now under way about creating a new facility on the Churchill Hospital site after Oxford Health NHS Foundation Trust revealed it wants to move the Oxford City Community Hospital from the John Radcliffe Hospital.

The hospital provides 20 inpatient beds and acts as a bridge between hospital and home, particularly for elderly patients who need rehabilitation to regain independence as they recover.

But the health trust believes the needs of the city’s elderly could be better served in more spacious accommodation at the Churchill.

Bed-blocking, which sees hundreds of well patients a month staying in hospital because the next stage of their care is not in place, is costing Oxford University Hospitals trust £3.3m a year.

Oxford Health spokesman Alistair Duncan said: “[A new facility] is at an early stage and an exploratory piece of work is needed to look at whether this would be suitable. It is important we maintain our bed provision in the city at a suitable location.

“Relocating the City Community Hospital to the Fulbrook Centre would work towards our wider agenda of integrating and improving the alignment of physical health services with mental health services for older people, which is something we are looking to do across all of our services. We have been testing the idea informally with our local commissioners but clearly a formal piece of work will need to be carried out.”

The Fulbrook Centre contains three inpatient areas providing services to older adults. It is a modern building that opened in 1996 and provides inpatient care.

It would mark a return of Oxford community hospital to the Churchill site. The old 26-bed unit at the hospital site was controversially closed in 2008 after an outbreak of clostridium difficile. It closed after four patients contracted the superbug, in the third outbreak in a matter of months.

An independent investigation later blamed poor management and inadequate monitoring.

Some feared the community hospital would lose its separate identity once opened at the JR and be swallowed up by the main hospital.

But the £250,000 unit that opened at the John Radcliffe was viewed by many as a temporary solution, although it meant patients had better access to facilities than most UK community hospitals.

Jacquie Pearce-Gervis, chairman of Oxford Patient Voice group, said: “It sounds splendid. We know they are short of space and do not have adequate accommodation on level seven. It is difficult to do a great deal of rehabilitation.

“It would make sense moving it from the busy John Radcliffe. Perhaps it could help reduce bed blocking.

“From our point of view, it is important the new hospital should provide more accommodation and not less.”