UPDATED 4.39PM: Two mental health patients who escaped from Waikato Hospital have been found.

Benjamin Manuel and Morgan Hamiora-Smith were found by police in Coromandel this morning.

Police had been searching for the pair since Monday night.

Waikato District Command Centre Senior Sergeant Lance Tebbutt said members of the public assisted greatly in locating the men.

There were no issues when police collected the men - and they are headed back to Waikato Hospital's Henry Bennett Centre.

The men are said to have fled through a pincode door and scaled a four metre high fence.

Earlier today, Waikato DHB chief executive Dr Nigel Murray said an external third party investigation would begin "immediately".

"You can be absolutely assured our staff is just keen to see what went wrong, as anybody else is."

"Obviously something did not go to plan."

Murray maintains both patients have previously been given permission to go outside, unescorted, on brief periods of leave.

"You've got to find the balance between rehabilitating people back into the community which we know is the best place for people recovering from mental health illness to find the community connection."

But the two patients' escape prompted a grieving father to speak out after his own son escaped the facility and was later found dead in the Waikato River. 

The coroner is investigating the death. 

Hamilton City councillor Dave Macpherson is seriously disappointed at how the mental health centre dealt with the two issues. 

"We get this kneejerk reaction when there's two people on the loose," Macpherson claims. "It's like our son's life didn't mean anything."

Macpherson believes the silver lining is in the possibility of improvements, but he doesn't have much faith in the inquiry.

"Faith would be far too strong a word, to be honest, because being how the mental health profession and mental health profession generally protect their own."

A mental health advocacy group is warning against imposing tighter security at mental health facilities.

Changing Minds' Kieran Moorhead says it was a one off unusual event.

"It's imposed more restrictive policies to ensure this doesn't happen again. I think that's the wrong road to go down."

The Prime Minister doesn't want to see a clampdown on the mental health sector, despite a high profile escape.

John Key says it's difficult to get the balance right between security and treating people, but in general, mental health facilities get it right.

"There'll always be exceptions. It's like prisons, you can build the safest prison in the world but from time to time the odd criminal will break out."