Hospital District Board Changes Its Name, Focus : Health care: Newly elected majority stresses preventive care over renovations at South Bay facility.

The campaign last fall for control of the beach cities’ hospital district came down to a single question: Should a public agency spend millions of dollars to modernize the privately run South Bay Hospital?

Three outsiders who opposed that spending won an upset victory and gained control of the South Bay Hospital District, now known as Beach Cities Health District. And sure enough, since Dick Fruin, Gerald L. Looney and Aviva Kamin took their new posts, the five-member governing board has declined the hospital’s request for $15 million to improve its facilities in Redondo Beach.

Now the board is leading an effort to enhance local health care and help the hospital without channeling millions of dollars in district funds to the for-profit hospital’s private operators, American Medical International (AMI).

Put simply, the new leadership of the agency is stressing preventive care over expensive, high-tech equipment and renovations.

“We would like to bring in programs that help everyone concerned,” Looney said. “Not just give money to AMI, but to have something that benefits people in the community.”

The hospital district, which encompasses Redondo Beach, Hermosa Beach and Manhattan Beach, was formed in 1955 to build a community hospital. In 1984, it leased the hospital for 30 years to AMI, an arrangement that allows the district to reap about $3 million a year in rent, the district’s primary source of income.

The district uses interest from its $27-million investment portfolio to help fund health-related programs in the community.

Last year, AMI proposed extending its lease and making improvements at the hospital. In return, it asked for $15 million in district funds over five years to pay for the improvements and for uninsured patients. The improvements were to include purchase of a magnetic resonance imaging machine, known as an MRI, and modernization of the hospital’s emergency room and other parts of the building.

The proposal sparked an unexpectedly lively election contest for three seats on the five-seat board, with most candidates favoring aid to AMI. The three winners in the November balloting, however, all opposed the AMI proposal.

The board apparently declined the plan in a closed-door session in January, attracting little or no public notice. No information is available on how individual board members voted, said Robert Riley, district executive director. Robert Lundy, attorney for the district, said the meeting was private because the board was giving instructions regarding property negotiations.

Last year’s hospital improvement plan was pitched amid signs that the 203-bed South Bay Hospital is struggling financially.

The facility’s bed-occupancy rate was only 29.5% in 1991, far behind its closest competitors--Little Company of Mary Hospital in Torrance and Torrance Memorial Medical Center.

The $15-million spending plan was aimed at making the hospital more competitive. Board member Ken Johnson, who was replaced by Fruin as president, has supported district aid for the hospital in the past.

He said he continues to be concerned about the hospital’s economic health.

While the planned programs may help the facility, “I’m still skeptical if it will be enough, soon enough,” Johnson said.

But with its three new members, and holdover members Johnson and Pat Dreizler, the board appears to be retooling its relationship with the hospital.

One of the first signs that change was under way came this winter, when the board voted to change the agency’s name from the South Bay Hospital District to the Beach Cities Health District, a name that board members said better reflects the district’s purpose.