Maniototo Health Services Ltd, which runs the area's 15-bed hospital, and the Chalet Community Trust, which runs the neighbouring 16-bed home for the aged, have joined forces in the hope it will provide efficiencies and help save money.
Integration project manager and Maniototo Health Services trust chairman Errol Millar said the hospital, built in 1929, was "proving to be an expensive wee beast to maintain and heat.
"This will probably bring a sigh of relief to everybody".
The trusts of the two services reached a formal agreement about 18 months ago and since then have been sharing the likes of administration work, though that will become official on October 1.
"This is an integration, not a takeover . . . it is administrative convenience," Mr Millar told a recent Maniototo Community Board meeting.
Though it is a merger, it will be known as Maniototo Health Services Ltd instead of by a new name which was also a cost-saving exercise.
He said the chalet's rest-home licence was transferred to the new entity and the about 60, mostly part-time, staff would be "re-offered" their jobs on the same terms and including all outstanding sick leave and holiday hours.
The only jobs that would change, and then only slightly, would be of the chalet manager and registered nurse and of the hospital manager and nurse manager.
While no decision has been made about where the merged trust will go from there, options included rebuilding the entire complex or closing the hospital and building wings on to the chalet complex, which is on land owned by the health services trust.
Though the Southern District Health Board was supportive of the project, it had indicated it would not fund any rebuilding, Mr Millar said.
"There are pie-in-the-sky figures floating around . . . around $3 million.
"I predict a massive funding campaign."
That campaign could include new shares in the complex, as was done initially with the health services trust - people and organisations brought $1 shares for $10, with $9 going into trust.
With 10,000 shares, the Central Otago District Council is the largest shareholder.
The Maniototo Community Board welcomed the news last week, with chairman Barry Becker saying it had "taken a long time to get around to this and [they] probably should have done it a long time ago".
"It can only improve the service to the whole community."
