Bay Area Hospital is close to purchasing a nearby radiology office in an effort to restructure its main campus and turn around its financial statements.

CEO Dan Smith said the hospital is in negotiations to buy South Coast Radiologists, which is located on the other side of Thompson Road from the hospital.

Its acquisition would allow the hospital to move some outpatient services off the existing campus and replace them with hospital beds.

Bay Area currently has about 125 beds, though it is licensed to have as many as 172.

There also might be some financial benefit to the move, said Chief Financial Officer Tim Salisbury. The hospital would stand to gain a more lucrative slice of the radiology market.

South Coast Radiologists is owned by Enhanced Medical Imaging of Milwaukee, Wis. The company’s Web site said EMI was founded in 2003. It has offices in California, Illinois, Ohio and Wisconsin. EMI’s only office in Oregon is in Coos Bay.

Company officials declined to comment for this article, but Salisbury said the deal is almost done.

Part of the reason for exploring the purchase is because of an anticipated increase in the demand for bed space at the hospital.

There is a growing retiree population in the area, Smith said, which could lead to more operations that require overnight stays.

Bay Area Hospital had 172 beds when it opened a new wing in 1979, but that number declined as bedrooms were converted to spaces for outpatient services such as physical therapy and diagnostic procedures.

By acquiring South Coast Radiologists, Smith said the hospital could add another eight to 10 beds.

“We are thinking ahead,” he said.

Salisbury noted that the hospital and the business have duplicate services. Some equipment, like those used for MRIs and CT scans, would need to remain at the hospital because some inpatients need those services. Others, such as mammography equipment, don’t necessarily need to remain at the hospital because only outpatients use them. That potentially could be one service offered exclusively at the radiology office.

The hospital also is looking for ways to improve its bottom line.

Last year, the hospital lost $500,000 Salisbury said, due to several factors including a slight dip in patients, government-mandated hirings and a poor payer mix. That doesn’t mean Bay Area’s finances are in bad shape, he said. It just means there is room for improvement. He noted the hospital has a little more than $1 million in long-term debt, a small amount for a hospital its size.

Buying South Coast Radiologists could address the hospital’s payer mix, Salisbury said, by reducing the competition for radiology services. The hospital often treats the neediest patients, while South Coast Radiologists gets can turn down someone who doesn’t have insurance. By acquiring the office from EMI, Bay Area could find itself serving more patients with commercial insurance �” and the larger reimbursements that go with it.

Salisbury said a decision hasn’t been made yet as to how the hospital would pay for the business. The hospital could pay out of its depreciation account or seek a 15-year mortgage.