Five years after averting financial ruin, the Mendocino Coast District Hospital in Fort Bragg is expanding.

It has just opened a $5 million center or diagnostic imaging that ranges from bone density scans and mammograms to MRIs.

Formerly, the hospital had rented a magnetic resonance imaging device, which was located inside a trailer.

"Things have turned around dramatically in the four and a half years," said hospital director Raymond Hino.

The addition is being funded with a $5 million bond that comes with a $34,000 a month payment, said Bob Anderson, the hospital's chief financial officer.

The hospital saved $485,000 on bond issuance fees as the result of a grant from UnitedHealth Group. The money was made available through the insurance giant's California Health Care Investment Fund. The fund is a 20 year, $200 million commitment to fund organizations that provide services to low income and underinsured communities, officials said.

Federal regulators required the corporation to create the fund in exchange for allowing it to buy PacifiCare Health Systems and its affiliates in 2005, officials said. The Petaluma Health Center also is a beneficiary of the fund, receiving $5.87 million last year.

<NO1><NO>The coast hospital also has added robotic equipment that allows specialists to evaluate patients using video cameras and computers.

None of the improvements seemed likely five years ago, when the hospital was bleeding cash. The 2005-2006 fiscal year ended with a $5 million deficit.

In the first nine months of this fiscal year, the hospital cleared $497,000, Anderson said.

The hospital's operating budget is about $43 million, he said.

Key to the 25-bed acute care hospital's recovery was becoming a critical access rural hospital, which significantly increased its Medicare reimbursements. The hospital now is reimbursed by Medicare at 101 percent of the cost of services.

Hospital officials also reorganized the billing department, which was failing to recover fees.