New Milford and Danbury hospitals have begun talks that could lead to an affiliation between the two institutions.

At a Tuesday press conference at the Union Savings Bank office, officials from both hospitals stressed it is far too early in the process to know what a formal agreement between the two institutions would look like.

"We have had discussions to establish a level of trust,'' said Dr. Joseph Frolkis, the president and CEO of New Milford Hospital. "Now we want to finalize these discussions.''

That process could take several months with an announcement of formal ties in 2010.

Dr. Frolkis and Frank Kelly, the president and CEO of Danbury Hospital, agreed Tuesday that, given the changes health care is undergoing, joining forces makes medical and financial sense for both institutions.

"Both have strengths that will complement each other,'' Mr. Kelly said.

He said officials from the two hospitals began preliminary talks several months ago to see if the hospitals and their staffs could work together.

"Do we share a common vision?'' he said. "It's clear we do.''

Frolkis said leaders from the two hospitals plan to soon begin a more intense discussion. While that happens, the hospitals will proceed on their parallel tracks.

James Preston, the chairman of the New Milford Hospital board of directors, said New Milford will suspend its search for a new president and CEO to replace Dr. Frolkis, who will leave the hospital this fall. Instead, Richard Henley, who was named interim president and CEO last week, will continue in that position.

The hospitals compete for patients with highway billboards touting their services.

Danbury Hospital is by far the larger institution with more than four times the number of beds as New Milford.

It is also more financially stable. In the 2008 fiscal year, it had a $14.7 million surplus, while New Milford Hospital had a $1.5 million deficit, forcing it to cut its staff by 25 workers.

The recession and the demand for more efficient ways to deliver health care have altered that competitive climate. The health care systems promoted by President Barack Obama have stressed an even greater need to deliver care as cost-effectively as possible.

As a result, hospitals nationwide have begun to discuss ways to share and merge their services.

Both hospitals have already established affiliations with different partners -- New Milford with the New York-Presbyterian Healthcare System in New York City, and Danbury with Yale University School of Medicine, New York Medical College, the University of Connecticut School of Medicine and Columbia University Medical Center.

Dr. Frolkis said, rather than objecting, New York-Presbyterian brought New Milford and Danbury together to start talking.

The two hospitals hope to find ways to integrate their services, while preserving what they do best.

For New Milford Hospital, Dr. Frolkis said, that means maintaining its reputation as an excellent, community hospital with close ties to the community.

At the same time, Dr. Frolkis said, to strengthen what New Milford does well, it also has to make it clear there are some things it cannot do. For example, the hospital had to drop its emergency angioplasty program this year when it could not serve enough patients to make the program viable.

"But the need still exists,'' Mr. Preston said. "So for New Milford, does it make sense to send its patients to New York or New Haven or Hartford? Or to the hospital with the best cardiology department in the state of Connecticut, that's only 25 miles away.''

For Danbury Hospital, an affiliation could mean more New Milford patients availing themselves of the hospital's staff of specialists. It could also mean a greater collaboration between the physicians from both hospitals and a strengthening of the health-care system throughout western Connecticut.

Mr. Kelly said both hospitals are involved in PlaneTree the nonprofit institution which helps hospitals create patient-centered medical care.

"We have skills and resources that can complement each other and create a common experience,'' he said.