Otago and Southland District Health Boards are considering whether to merge, saying the move could reduce bureaucracy and save money.
The chief executive of both boards, Brian Rousseau, says combining the health boards would help ensure the survival of hospital services which are at present seen as marginal.
The boards already share the same executive management team and other functions, including finance, human resources and IT.
Otago board chariman Errol Millar says the regional Southern Blood and Cancer Service set up in 2007 has already been successful in cutting waiting times for patients in Otago and Southland.
Public consultation on the proposal is to begin in November and a decision will be made early next year on whether to ask the Minister of Health to combine the boards.