NSW Health Minister Brad Hazzard told a budget estimates hearing on Thursday while Lismore still had a hospital they "basically had nothing" in terms of health care.
There were growing reports of gastroenteritis on the NSW north coast, he said.
The relocations would help "to get on the ground confidence for people to see a practitioner ... if they've cut their finger, if they've got gastro", he said.
Acting Chief Health Officer Marianne Gale said there was "a lot of gastro in the community in general in recent months".
"In a flood situation there is always that risk," Dr Gale said.
"We know in a number of areas the flood waters have caused issues with the drinking water and caused issues with the sewage."
Boiled water alerts would need to be issued in multiple areas and evacuation centres were taking precautionary measures to stop the illness spreading.
Meanwhile, Lismore's mayor says there is an urgent need for semi-permanent dwellings to accommodate people whose homes were destroyed in the northern NSW flood crisis.
Steve Krieg said thousands of people have been homeless since Lismore was inundated with floodwaters on February 28.
"I'm one of them," he told the Nine Network on Thursday.
"I'm sleeping at a friend's place."
Like thousands of his constituents, he has no long-term plan for where he will live.
"I can't keep uprooting my family to friends' places for the next six-to-12 months or until I can rebuild my house," he said.
"We can't live in a tent."
There was an urgent need for demountable housing that was weatherproof and could be dispensed with when it was no longer required.
Cr Krieg has been shocked how the region has been treated, saying "politicians ... like to pass the buck a lot" about which tier of government is responsible for what.
"You can't do that in situations like this. There are no borders," he said.
He met with Prime Minister Scott Morrison on Wednesday but got no promise the region would get the estimated $200 million needed to fix damaged roads.
"I would have felt more assured if Scott Morrison had said, 'Listen mate you don't have to worry about that. We will fix it'," Cr Krieg said.
"This can't be a political football anymore. There are people who are suffering."
