Prince George's County and the nonprofit corporation that runs the county's public hospital system have negotiated a major restructuring of the terms of the corporation's lease, County Executive Parris Glendening announced this week.

The new lease would reduce the annual payments of Dimensions Health Corp., formerly Community Hospital and Health Care Systems Inc., which manages Prince George's Hospital Center and three other local health care facilities. The lease would be reduced to $783,000 annually and extended to 35 years.

Under the original lease, approved in July 1983, the corporation was scheduled to pay $2.5 million annually to the county over a 10-year period to repay old hospital debts.

When Dimensions assumed management of the hospital system, it had severe cash flow problems that led to layoffs, low staff morale, complaints about care and the threat of the loss of accreditation. In 1985, the hospital lost $6.5 million. But officials hired Hospital Corporation of America to run the system, and last year officials reported a profit of $900,000.

Yet the system is still millions of dollars shy of what is necessary to operate a successful health care system, said Winfield Kelly, the former county executive who is chairman of Dimensions.

"It would take about $5 million to $10 million in profit each year for each of the next five years to bring the hospital system up to a first-class system," Kelly said. He added that the primary needs of the hospital system -- which comprises Prince George's Hospital Center, Greater Laurel-Beltsville Hospital, the Bowie Health Center and the Gladys Noon Spellman Nursing Center -- are covering the costs of indigent care and acquiring more modern and technologically advanced equipment.

Indigent care costs have long been a controversial issue for the system, which records one of the heaviest charity case loads in the state. In 1986, Dimension's indigent care cost was $14.5 million or 13.6 percent of total revenue. The total cost of running the county hospital system is about $125 million annually, according to Glendening.

Hospitals in the region and around the country have treated increasing numbers of patients in recent years without reimbursement as a result of federal and private-sector cutbacks in health care funding. As many as 35 million people nationwide are estimated to lack public or private health insurance, and the cost of their care has been borne increasingly by public and community hospitals.

County, state and Dimension officials said the local hospital system has made significant financial strides in the past year, but, Glendening said, the renegotiation of the lease should ease the financial strain without forcing the county to increase citizens' taxes or draw funds away from other public programs.

The lease plan will receive a public hearing before the county council on July 21.