The Prince William Health System, which just a year ago was for sale as a survival move, said Monday that it is ahead of schedule on key improvements and in better financial shape than it anticipated when the board of trustees voted to remain independent about three months ago.

"It will be a long time before we realize if it was the right decision or not," said John Atkinson, trustees chairman. But, he said, the board is happy with the progress that has been made.

In March, the health system said it wanted to cut costs, increase prices to a competitive rate, expand Prince William Hospital's trauma capability, evaluate the future of Annaburg Manor nursing home and its replacement and evaluate the addition of cardiac catheterization, radiation therapy services and an ambulatory surgery center.

There has been progress toward most of those goals, board members said.

On the financial side, the health system already has exceeded earnings expectations for the year, Atkinson said.

For the first nine months of fiscal 1999, the hospital made $2.6 million. That is more than the $2.5 million the hospital planned to earn by year's end.

The increase is because of more patients than anticipated, Atkinson said.

Since its decision to remain independent, the health system implemented a 10 percent price increase July 1 for services to bring prices up to the level of other area hospitals, said Kenneth Swenson, president of Prince William Hospital.

The board also decided to replace Annaburg Manor and is filing the certificate of public need with the Virginia Department of Health at the end of July for the $15 million project.

The new nursing home is scheduled for completion in 2001. It will have a 240-bed capacity and be about 100,000 square feet.

The board is continuing to look at possible uses for the current facility, though the building is said to have structural defects, according to Robert Regan, president and chief executive of Prince William Health System. A study is being conducted now to decide whether it is worth renovating.

Another major project is the $4.5 million Birthing Center expansion and renovation. It will include 23 private rooms with baths. Construction is slated to begin in October and be completed in fall 2000.

Cost reductions are being incorporated into the fiscal 2000 budget, which begins Oct. 1. The board plans to reduce costs by saving on supplies and getting managed care companies to cut their costs to the hospital.

"We're not planning to reduce services," Swenson said. "We're doing them in a cost-effective way."

The cost reductions also will not effect personnel. "We are not expecting job cuts," Regan said.

The hospital is also working on gaining new services, including a free-standing ambulatory surgery center, cardiac catheterization service and radiation therapy service. Those services will not be decided on or applied for until the end of fall, at the earliest.

Sixty-two percent of area residents are being treated at Prince William Health System facilities, Swenson said. The health system is hoping to increase its market share.

The board is looking at ways to enhance Prince William Hospital's ability to reach out to the public, which so far has included billboard advertising, direct mailings, community polls and even movie screen advertising.

In the meantime, the hospital is undergoing a $1.2 million renovation, which includes new wallpaper, carpeting and other interior renovations.