If Capitol Hill Hospital could admit at least three new patients daily, cut costs and increase the number of paying patients, it could become financially viable, according to a report released yesterday by a coalition trying to save the hospital.

"This report simply shows that Capitol Hill Hospital can be maintained as an acute-care hospital, and it can be profitable," said Harold Brazil, D.C. Council member-elect (D-Ward 6) and chairman of the coalition.

But a spokesman for Medlantic Corp., which owns the hospital and wants to make it a facility for long-term care, said its problems are rooted in its declining admissions.

"Capitol Hill Hospital has too few patients to support the services that the hospital is trying to provide the community," spokesman Philip Schneider said. "That is a trend that began significantly three years ago and continues."

In its six-page report on the hospital's financial condition, the Baltimore accounting firm of KPMG Peat Marwick relied on accounting records and interviews with Medlantic representatives and doctors at the hospital.

The report said Capitol Hill Hospital had net operating revenue of $11.9 million from 1,708 admissions from July to October. That resulted in an average revenue of $6,979 per admission, the report said.

Expenses during that period were $14.3 million, the report said. If those expenses are divided by the revenue per admission of $6,979, the number of patients needed by the hospital to break even would be 2,055.

That is an increase of 347 admissions, or about three a day, the report said.

The report recommended that the hospital "undertake strong cost control measures" and specifically urged a review of the $300,000 in monthly payments the hospital makes to Medlantic for management information services, employee health benefits and various Medlantic overhead charges.

The report said the operating loss at the hospital declined 43.7 percent from September to October, a period when doctors were trying to increase patient admissions.

And, according to the report, admissions did rise in October.

But Medlantic's Schneider said the effort by hospital physicians to increase admissions fell short of its target. The hospital admitted 125 privately insured patients from Oct. 22 to Nov. 21, rather than the target number of 178, he said.

Schneider said there were 176 Medicare admissions -- which hospitals say can cost them money because the government does not pay enough -- during that period despite the effort to hold them to 155 or fewer.

The hospital, at 700 Constitution Ave. NE, has 133 acute-care beds and 30 skilled-nursing beds, making it one of the city's smallest. But its location near low-income neighborhoods and several major drug markets makes it an important part of the city's health care system.

The hospital's emergency room annually provides care for an estimated 27,000 people, many of whom depend on the hospital for primary health care.

But in early October, Medlantic officials said they might be forced to close the 102-year-old facility because of continuing losses, mainly from uncompensated patient care.

John L. Green, an executive vice president at Medlantic, said the hospital lost $5.1 million in fiscal 1990 and could lose as much as $7.4 million by the end of this fiscal year.

The coalition working to save the hospital includes many of the estimated 700 hospital employees as well as local residents. They have staged demonstrations, filed a lawsuit and negotiated privately with Medlantic.

Yesterday, leaders of Medlantic and the coalition said those talks are still underway.

But both sides expect the matter to be resolved in the next few weeks. Medlantic has said that layoffs of hospital workers could begin as early as Dec. 19.