Alameda Hospital is exploring an affiliation with the Alameda Health System, which operates Highland, Fairmont and the John George Psychiatric hospitals.
The boards of both organizations have signed a letter of intent to pursue a relationship and will have about 90 days to seek public comments and work out the details.
Alameda Hospital could benefit financially because the health system would help pay for new technology and required seismic upgrades, which would protect the hospital against earthquakes.
It would retain its identity and continue to operate its emergency care center.
For the health system, an affiliation would expand its network of institutions and give patients more options as it positions itself to deal with the major changes coming under national health care reforms.
"This is a new day for health care and a partnership with Alameda Hospital will further our goal to create a world-class patient and family-centered system of care for everyone," said Wright Lassiter, CEO of the health system, in a written statement.
The health system also is in discussions to take control of San Leandro Hospital from Sutter Health.
Under the Alameda Hospital proposal, the City of Alameda Health Care District would retain ownership of the hospital's assets, including its parcel tax revenue, which would be used exclusively for its operations and long-term capital investments.
"This affiliation will ensure Alamedans that this hospital will be here whenever we're needed," said hospital CEO Deborah Stebbins. She added that no service reductions or layoffs are planned.
Several public forums are scheduled, including one on June 27 at 6:30 p.m. in the Dal Cielo conference room at the hospital.