Two hospitals in Manchester and Nashua announced on Tuesday that they are exploring the formation of a regional health care system, a potential setback to Dartmouth-Hitchcock’s efforts to gain market share in southern New Hampshire.

Officials with Elliot Health System in Manchester and Nashua’s Southern New Hampshire Health System said they had signed a letter of intent to explore creating a new nonprofit organization with an “integrated governance system,” while also allowing each hospital to maintain its name and local governance structure.

“By signing this letter of intent, we affirm our shared commitment to strengthening and expanding our charitable missions to provide the very best healthcare possible to the communities we serve, where and how it is needed most,” Elliot President and CEO Doug Dean and SNHH President and CEO Mike Rose said in a joint statement issued by the hospitals.

“This approach anticipates a solution to address the increasingly complex health care challenges faced by hospitals in New Hampshire and around the country. In a rapidly changing healthcare service environment, our commitment … is to develop a highly coordinated, community-based regional health care network that would enhance access to affordable care while ensuring quality of care delivered throughout southern New Hampshire.”

Elliot Hospital has 296 beds and Southern New Hampshire Medical Center has 188 beds. They serve the two biggest cities in the state.

Officials at Elliot and the Lebanon-based Dartmouth-Hitchcock system had been in affiliation talks, but ended them in February.

D-H is trying to establish more of a presence in southern New Hampshire as it attempts to move away from a fee-for-service compensation system to one where it would receive a set amount of money per patient under its care. Its flagship Dartmouth-Hitchcock Medical Center in Lebanon is the state’s largest hospital, with 396 beds.

Besides being home to a busy trauma center in the state’s largest city, Elliot also runs clinics and health centers from Londonderry to Hooksett.

But officials there have also indicated more than $300 million in capital improvements are needed at the Manchester hospital, including upgrades to its emergency room and its cancer center.

Dr. Gregory Baxter, Elliot’s chief medical officer, said in a news release on Tuesday that forming a health-care system with SNHH would bolster “population health management” for the two hospitals.

“By aligning our technology and care delivery systems to collect and compile data that gives us insight into the needs of our patients and communities, we would be able to collaborate on models of coordinated care delivery and an expanded scope of services for more than half a million residents in our combined service areas,” Baxter said.

The Nashua hospital also has a clinical affiliation with Boston-based Massachusetts General Hospital.

Asked for comment, Dartmouth-Hitchcock spokesman Rick Adams said via email: “Dartmouth-Hitchcock shares a strong commitment to providing the best care to the people of our state and the region. We believe that collaboration among providers, as well as competition, is the most effective way to deliver that care. Collaborations like the one just announced between Elliot Health System and Southern New Hampshire Health reflect the demands of a rapidly changing health care environment.

“As we said earlier this year, Dartmouth-Hitchcock has deep roots and an unwavering commitment to serving the needs of the communities of greater Manchester and southern New Hampshire. We value our relationship with our colleagues at both The Elliot and Southern New Hampshire Health, and as the details of their proposed combination are clarified we will continue to build upon our commitment to transform health care delivery for the patients and families we serve.”

Some physicians in the Dartmouth-Hitchcock system do practice in the Manchester and Nashua hospitals, and the proposed merger is not expected to change that status, officials said.

“All providers on both hospitals’ medical staffs would continue to have privileges — no changes,” said Suzanne Tammaro, a spokeswoman for Southern New Hampshire Health.

News staff writer John Gregg can be reached at jgregg@vnews.com.