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After working 20 years for out-of-state investors, physicians at Bywater Hospital intend to recreate the former St. Claude Medical Center as a doctor-owned community infirmary.<P>"People who have a sincere interest in this hospital will have the opportunity to see some of their dreams realized," said Dr. Adrian James, Bywater Hospital's new chief of staff.<P>Dr. John McGee is one of three investors who bought the 130-bed St. Claude Medical Center for $2 million in June from United Medical Corp. of New Orleans and renamed it Bywater Hospital to reflect its community ties. <P>The hospital needs cash for new equipment, beds and fresh paint, McGee said. The chairman of the Bywater Hospital Board of Directors is calling on New Orleans' doctors to make the investment. McGee will invite about 50 physicians to invest in the facility over the next few weeks. He expects as many as 30 doctors will pool as much as $5 million for the hospital turn-around. <P>Longtime St. Claude physicians say they aren't used to having locals control the hospital.<P>"(The previous owners) didn't do much to facilitate good medicine here," James said. United Medical operated St. Claude Medical from afar and rarely reinvested in the hospital, he said, and former hospital executives were "handcuffed" with what they could do financially. <P>David Dizney of Orlando, Fla., president of United Medical, did not return calls for comment.<P> "For that community to have good medical care, local input is important," said Jack Finn, president of the Metropolitan Hospital Council of New Orleans.<P>After the sale, former St. Claude executives lined up to help steer the hospital, including Romona Baudy as chief administrative officer. Baudy served in that position from 1988 until 1995. <P>"Those were good years for the hospital," she said. <P>City Councilwoman Jacquelyn Clarkson represents District C, which includes the hospital at 3419 St. Claude Ave. She said Baudy's return is a good sign.<P>"I'm very excited that she's back. She was the best thing that ever happened to that area," Clarkson said. "She's a phenomenal leader for the hospital and the community."<P>Bywater Hospital offers acute care service, including emergency care and operating rooms. It lacks obstetrics and pediatric departments.<P>The sale doesn't solve the hospital's problems. The new owners must now convince the community, medical vendors and area doctors that Bywater Hospital will discontinue any discredited practices by St. Claude Medical Center.<P>"Some of us have to see it before we believe good things can happen here," said Dr. Farere Dyer, a veteran cardiologist. <P>It's a fiscal challenge, too.<P>"They just weren't paying their bills. We're suffering a lot of consequences for that," McGee said. Hospital purchasing credit was is so bad local blood banks insisted on payment upon delivery, he said. <P>McGee knew firsthand how tarnished the hospital's reputation had become. Last fall, a handful of vendors - including Quality Care Management Inc. led by McGee - filed an involuntary petition for bankruptcy against St. Claude Medical Center. According to the filing, the hospital owed three suppliers a total of $86,345. <P>McGee said he doubted that anything the petition had to do with the owners decision to sell the hospital. Negotiations to buy the facility had been under way for nearly a year by that point.<P>The case was settled out of court in April. <P>To cut more of the St. Claude Medical Center ties, administrators pushed the Joint Commission of Accreditation to re-accredit the new hospital. The process ended two days after the sale, allowing the hospital to apply for new Medicare and Medicaid programs.<P>Bywater Hospital now won't be responsible for any outstanding charges or complaints made against St. Claude Medical Hospital, McGee said.<P>"We've got an image problem to repair," James said. <P>The executives are also asking various managed care companies and insurance providers to include the hospital in their lists of approved providers. McGee hopes to land a contract with Coventry Health Care of Louisiana that would encourage city employees to use Bywater Hospital.<P>To win the employees' approval of the sale, hospital executives promised increased benefits such as 401k retirement funds for all full-time employees - a first for the small hospital."