South Staffordshire health authority is to launch a formal consultation on proposals to merge mental health and community trusts.
The move follows the end of the first stage of a strategic services review begun in June 1999, driven by the need to overcome a funding shortfall and raise the quality of community services.
In a report, Response to the Case for Change, the HA sets out options, including a move from three trusts to a single mental health and community services trust.
Reconfiguration of services at south Staffordshire's six community hospitals is also proposed.
Chief executive Brian Aird said: 'The review is not solely about saving money, but because of the complexities of the local health economy we cannot ignore the fact that local health services need to be efficient.'
Formal consultation is set to begin in June.