NY governor: Save urgent care at St Vincent's Hospital

NEW YORK, April 9 (Reuters) - New York City's historic St Vincent's Hospital, which is days away from closing under a crushing burden of debt, would get a second chance as a place to treat walk-in patients needing "urgent care" under Governor David Paterson's latest proposal.

Two months ago, Paterson offered a temporary loan to the cash-strapped hospital that was founded in 1849 in the West Village to serve the poor.

But various initiatives to save one of the city's major hospitals renowned for its charity care have foundered despite the governor's efforts. On Friday, a St Vincent's spokesman said the 400-bed in-patient part of the hospital was being closed and ambulances sent to competitors except for individuals who need urgent care for mental health problems.

"We are not turning away people, but this is the beginning of the orderly wind-down of the facility," the spokesman said by telephone, adding that this process will take weeks.

Back onto center stage comes the state's Democratic governor, who unveiled his proposal in a Request for Grant Applications, released on Thursday afternoon.

Paterson said the downsized St Vincent's would offer "comprehensive ambulatory care, including basic medical imaging, laboratory services, use of electronic medical records, and accessibility to and the ability to provide rapid transit to full-service emergency room available for life-threatening conditions."

Community advocates say St. Vincent's closure of in-patient services could endanger people who need emergency care by forcing them to travel to hospitals that are further uptown or on the East Side.

"I am confident that the other providers in the area will come forward with resourceful proposals to ensure that St. Vincent's patients continue to receive timely and high-quality care," Paterson said in a statement.

The grant process will be run by the state Department of Health and the Dormitory Authority; applications are due on April 16, Paterson said.

Another issue clouded by St. Vincent's financial problems is New York City developer Bill Rudin's agreement to build a new facility for the hospital across the street and put a residential office tower on the original site.

The hospital has about $700 million of debt, including bonds, loans and pension and medical malpractice liabilities, some of which is so-called "legacy" debt taken on when it divested some hospitals several years ago, the spokesman said.

Two of the bigger creditors are General Electric and TD (Toronto Dominion Bank) (TD.TO)(TD.N). In February, a GE spokesman in February said the two firms provided a credit facility of about $300 million. (Reporting by Joan Gralla; Editing by Jan Paschal)