An independent review of maternity services at South Tipperary General Hospital in Clonmel and Cavan General Hospital has found they cannot sustain services as currently arranged.
The reports for the HSE said smaller hospitals cannot operate in isolation as stand-alone entities, either clinically or financially.
The reports said smaller hospitals like South Tipperary and Cavan need to have formal links with bigger, stronger more specialist units. Also, sharing of staff and facilities between maternity units would enable funds to go further.
The reports were produced by former NHS executive David Flory.
In relation to Cavan General Hospital, the report said that four baby deaths in 30 months has impacted on mood and morale at the hospital and is affecting clinical risk assessment and decisions.
It said that the infrastructure at Cavan General Hospital is generally fit for purpose but the management structure is very light.
In relation to South Tipperary General Hospital, the report said some parts of the hospital building are not fit for the purpose of delivering high quality and safe care.
Measured by the number of births it is also the smallest unit in Ireland.
The reports said there is a negative environment in maternity services, with speculation and suspicion about what may happen, especially to smaller units in the future.
Mr Flory also said that Irish pay levels are not competitive in an international labour market for general managers or healthcare professionals.