On Monday, the recently appointed chair of the Northern Health Board, Jennifer Williams, announced that the Northern Hospital's Chief Executive Officer, Janet Compton, had resigned, effective immediately.

Ms Compton's resignation comes after the Epping hospital consistently failed some of the state government's key performance indicators during the year to March. It also follows investigations into bullying and concerns about patient care among plastic surgeons.

The state government's most recent hospital performance report revealed the Northern Hospital in Melbourne's booming northern suburbs has been struggling to meet targets for emergency and surgical care.

Between January and March, it treated just 43 per cent of category two elective surgery patients on time. This includes patients needing hip, knee and heart valve replacements. The government's target is for 80 per cent to be done within 90 days.

It has also been failing target times for treating category two emergency patients such as those having strokes, or suffering from severe bleeding and major fractures.

The Age understands the government has been concerned about the network's performance in recent times. This concern follows reports the previous Coalition government considered merging it with the Austin Hospital in Heidelberg to try to make the services more efficient.

On Monday, Ms Williams, a former CEO of Alfred Health and Austin Health, issued a statement to Northern Health staff, advising them of Ms Compton's departure.

"Janet is on leave from today and an interim Chief Executive will be appointed while the Board carries out a search to appoint a new Chief Executive as soon as possible," the statement said.

Ms Williams described Ms Compton as a "strong and courageous leader with a passion for delivering outstanding health care" who had been improving the hospital's emergency department and maternity unit to reduce wait times and improve patient flow.

She said Ms Compton, who was appointed CEO in 2013, had also developed plans for Northern Health to partner with other health services and providers and strengthened ties with universities.

"We all congratulate and thank Janet for her leadership and contribution to outstanding health care for Northern Health and the Northern community," the statement said.

Last year, The Age revealed Northern Health was being swamped with demand due to rapid population growth. Briefing documents seen by The Age said the area was attracting young families, increasing demand for maternity and paediatric services. It is also home to a population with higher rates of obesity and diabetes compared to the state average.

Demand for the hospital's emergency department, already one of the state's busiest, was expected to surge from an average of 1300 patients a week in 2014 to 1700 a week by 2018.

Patients receiving elective surgery would increase by more than 50 per cent within the next three years, from about 14,000 patients in 2014 to 21,370 patients in 2018.

Before the election, the Coalition promised a $98 million expansion of the hospital which was not matched by Labor. The expansion would have provided 12 extra intensive care beds, 64 new general ward beds and two new operating theatres as part of a "south tower" currently under construction.

The project's $29 million first stage – a 32-bed ward above two "shell" floors – was funded in the 2013-14 state budget.