The hospital is still well away from reaching the national target of 95% of patients spending no longer than six hours in its emergency department.
Its poor performance in meeting the target was one of the ongoing concerns of the National Health Board, which recently brought in a special team to assess hospital systems.
Its report is being compiled and the first draft is expected to be completed by the middle of the month.
A report on the health targets before today's committee meeting shows that in the 11 months to the end of May, the hospital has been around the 70% mark, with April the best month, when 78.13% of patients were dealt with in the required time.
Southland Hospital, which began the year on 83.63%, was close to the target by the end of May on 92%.
An observation unit, sometimes called a short-stay unit, would mean patients with conditions which needed monitoring over some hours, before being discharged or admitted to a ward, could be treated in a suitable setting.
Department staff have expressed concern about the number of often elderly patients waiting on beds in corridors and have been adamant target staying times will not be achieved without a short-stay unit.
In its closed session, the committee is also considering a strategy for "Putting the Patient First", a culmination of the work which has been done through the "6 Hours - It Matters!" project taking an organisation-wide approach to lessen the time spent in ED and improve patient care throughout the hospital.
One of the leaders of the project, chief operating officer (Otago) Vivian Blake, said a draft quality improvement programme would be considered along with a report on the findings from another project which showed how orthopaedic patients moved through the hospital.
Mrs Blake said yesterday she hoped those documents would be made available once the committee and the full board had considered them.
Clinical leader of the "6 Hours - It Matters!" project Mike Hunter has also reported on what can be learned from other hospitals.
His report emphasises the need for a clear statement from the top of the organisation, identifying what is required and what is needed to reach that vision and a clear process to achieve it.
