The Southern District Health Board is proposing to reorganise hospital and community services in Queenstown.
The DHB has released details of a plan to co-locate the services in an Integrated Family Health Centre.
It says there is an urgent need to address the financial unsustainability of the 10-bed Lakes District Hospital at Frankton which has an annual occupancy of just 50%.
The DHB says it is convinced that having community and hospital services working closely together is the answer.
It says it could take two years and options could include redeveloping the hospital, and a public-private partnership for a new health centre at the Remarkables Park.
Hospital staff and union representatives have until 18 March to respond.
