Cheshire Medical Center/Dartmouth-Hitchcock Keene announced Tuesday it has finalized its affiliation agreement with Dartmouth-Hitchcock, according to a joint news release from the organizations.

Under the agreement, Cheshire Medical Center will further align its governance with Dartmouth-Hitchcock, as well as its clinical, financial and administrative activities. The hospital will also take more patients from Dartmouth-Hitchcock Medical Center in Lebanon, freeing up space in that facility for more critical care patients, according to the news release.

The hospitals already have a joint operating agreement dating back to 1998, but decided to explore a deeper affiliation in response to tough financial times, officials said last year.

When the Keene hospital started struggling financially, the board of directors considered a number of options, including the hospital becoming a for-profit entity, or downsizing to become a smaller, critical access hospital.

But the hospital’s board settled on further affiliating with Dartmouth-Hitchcock because of their existing relationship.

In an interview this morning, Cheshire Medical Center CEO Arthur W. Nichols did not go into specifics about how it would affect the hospital financially, but said the affiliation would help Dartmouth-Hitchcock invest in the Keene hospital’s staff and resources.

Although Cheshire Medical Center will retain its status as a separate legal organization with its own board of trustees, management and employees, major decisions such as the hospital budget will have to be approved by Dartmouth-Hitchcock, Nichols said.

The board of trustees’ makeup will also look a little different, Nichols said. Two-thirds of the 18-person board will be made up of local members, and the remaining one-third will be appointed by Dartmouth-Hitchcock officials.

The agreement will also mean Cheshire Medical Center will serve as a place where less complicated and less serious surgical and emergency cases from Dartmouth-Hitchcock Medical Center are sent.

Putting that in practice is still a ways off, according to Nichols.

“There’s a lot of work that remains to be done,” he said.

The agreement will not affect Cheshire Medical Center’s primary care practice, which — like hospitals nationwide — is dealing with a shortage of general practitioners. Hospital officials also said they did not anticipate the move would affect patient wait times.

The hospital in Lebanon is the only Level 1 trauma center in the state, meaning it has the highest emergency capabilities (Cheshire Medical is a Level 3).

In addition to taking serious trauma cases, the Lebanon hospital also has seen an influx of patients from smaller local hospitals in the Upper Valley region that are downsizing, according to officials.

Now that the affiliation has been finalized, Cheshire Medical Center will look at ways to step in and take more surgical and specialty patients. The hospital has extra space; it closed a medical-surgical unit on the second floor a few years ago, Nichols said.

“We would love to be in a situation where we can re-open our second floor,” he said. “That would be a good thing for the organization and a good thing for the hospital because it means we’re accepting more people.”

If the second floor re-opens, hospital officials will explore hiring more staff, Nichols said.

“If we’re successful in being able to attract more patients to Cheshire, then certainly we would need to staff up,” he said.

The agreement was finalized by the Consumer Protection and Antitrust Bureau of the N.H. Attorney General’s Office in recent weeks.

Ella Nilsen can be reached at enilsen@keenesentinel.com or 352-1234, extension 1409. Follow her on Twitter @ENilsenKS.