MLCs discussed the Commission on Delivery of Health Services in Tasmania report, and what it meant for the future of the health system, at a Legislative Council session on Tuesday.

Ms Armitage said yesterday that the problems outlined in the report - such as duplication of services across regions and a lack of statewide collaboration - could be solved within the three- THO structure.

Hobart MLC Robert Valentine and Murchison MLC Ruth Forrest disagreed, saying the report made a case for reform.

There is speculation that the commission's report, combined with impending federal budget cuts and an Integrity Commission report alleging nepotism by senior health figures, could prompt the state government to consider changes to the THO structure.

But Ms Armitage said the Launceston General Hospital was operating within its budget and meeting many performance indicators, and she feared it would decline under a single THO.

She said history indicated that when services were combined, resources went where the problems were.

Mr Valentine said on Tuesday that he understood that Ms Armitage felt protective of THO North and its good performance.

But he said a statewide system could work.

"With technology the way we've got it today, we've got to be able to do it more efficiently," he said.

"Part of that change is ridding ourselves of parochialism and seeing the regions work as one."

Ms Forrest said that while the LGH appeared to be operating within its budget, there were still many areas of service delivery that needed improvement across all health sites.

She said Tasmania needed one THO and one board with representation from the three regions, informed by local, consumer and clinical input.