The Government has confirmed that a proposal to close some public hospital kitchens and contract the work out to a private company is being considered.
Up to 1300 people are employed by district health boards and two private firms to produce meals for hospitals and a union says 200 jobs are at risk.
The plan is being considered by government agency Health Benefits Limited (HBL), set up in 2010 and charged with making savings in DHBs for re-investment in health services.
Health Minister Tony Ryall said on Wednesday the proposal is for a third of hospital meals to be prepared out of hubs in Auckland and Christchurch.
Two-thirds of meals would continue to be sourced and prepared locally in DHB kitchens.
The minister said a final decision on whether to take up the proposal is six months away.
Health Benefits Ltd said on Wednesday it is proposing to close up to 60 hospital kitchen facilities and give the work to Compass, a UK multinational.
Chief executive Nigel Wilkinson told Radio New Zealand's Checkpoint programme it could save $10 million a year over the course of a 15-year contract.
"The reduction in cost will be through efficiencies in terms of production of meals, standardisation and more efficient processes and technology than we have in place today."
Mr Wilkinson said fresh food would also be provided at hospitals, in addition to frozen re-heated meals, and not all hospital kitchens would close.
The Service and Food Workers Union says 200 jobs could go if the plan proceeds, and it would not agree to the scheme if food quality did not remain high for vulnerable patients.
In Parliament on Wednesday, Labour's health spokesperson Annette King said the Government is considering a contract to make TV-style dinners and then transport them to hospitals throughout the country.
Ms King claimed the move would result in the loss of about 1000 jobs and asked Tony Ryall about Compass "which recently fed horsemeat in their dinners. How does he intend to measure the quality of the food provided by them in New Zealand?"
Mr Ryall replied that a business case is being developed, but food quality and the cost will be taken into account before any final decision is made.