Provident Hospital, one of a handful of black hospitals left in the country, is fighting for its life.

Hospital officials and community leaders say the institution, which has courted financial disaster for years and just ended a bitter, nine-month battle between trustees and doctors, is more than just a remnant of the city's segregated past.

They have agreed that the hospital still serves a vital need in the city and say they are willing to work to revive it.

"I would sit down and cry if I thought Provident would not survive," said Shirley Pulliam, a nurse at nearby Lutheran Hospital active in health-care issues around the city. Provident "can deal with issues that other hospitals may not have the same sensitivity toward," said Pulliam. She cited as an example Provident's psychiatric department, which offers programs dealing with unemployment, drug abuse and other problems that are endemic to that black neighborhood.

However, the 271-bed hospital, with an annual budget of $41 million, is competing with several others for patients in a city that has a significant surplus of beds.

During the worst of the recent crisis the patient load dropped to 29 percent of capacity. Now, as the hospital rebuilds, it joins about a dozen other black hospitals in the nation that are limping along but seeking to redefine their mission and employ new marketing techniques to stave off extinction.

"There will be no closure of Provident -- certainly not before the '86 elections," said Del. Larry Young (D-Baltimore), chairman of one of the legislature's health committees.

Young noted that besides treating an almost exclusively black clientele, in good times the hospital employs more than 1,000 persons, mostly blacks.

"Integration made it difficult for black hospitals to survive," said Haynes Rice, director of Howard University Hospital in the District of Columbia. Rice noted that when given the option, many patients and doctors began going to white hospitals, which often were better equipped. This left the poorest patients -- who often had no money or were subject to increasingly tight-fisted government health programs -- at black community hospitals. Many black hospitals were forced to close because of lack of income.

According to a 1984 report by Nathaniel Wesley Jr. of Howard University, the number of black-owned hospitals has dropped from about 200 in the 1950s to 13 now.

In areas where other hospitals are accessible, Wesley said, he is "not convinced that black hospitals are serving a critical need any longer."

But Wesley, who worked on a staff development project at Provident last year, conceded that Provident's closing would be a particular loss to "many of the older folks who felt more comfortable there."

Rice said he believes that black hospitals can serve as role models for health programs elsewhere geared to problems prevalent among blacks, such as hypertension, sickle cell anemia and some types of cancer.

Black leaders here said they want Provident -- located in the western part of the city, in a neat, working-class neighborhood -- to prosper if for no other reason than to preserve history. "Baltimore's hospitals are like Baltimore's neighborhoods -- they have their own identities," Young said.

The hospital's board of trustees reads like a "Who's Who" of Baltimore's politicians, lawyers, doctors and clergy. The current chairman is William H. Murphy Sr., a former circuit court judge and a member of the family that owns the Baltimore Afro-American newspaper. Former board members include Judge Robert M. Bell of the Maryland Court of Special Appeals and Baltimore's chief prosecutor Kurt Schmoke.

Provident Hospital and Free Dispensary opened its doors in 1894 in fulfillment of a dream by a handful of black doctors who pooled their money and founded a place of their own to treat black patients. At the time, black patients were not allowed in the city's white hospitals.

During the late 1920s and early 1930s, Provident also was used as an examination facility for draftees and became a training ground for graduates of Meharry and Tuskegee, two prestigious, southern black medical schools.

The community hospital borrowed heavily from the state in 1968 to construct its present building. That heavy loan obligation, plus cash flow problems, caused the state to place the hospital in receivership in 1973. The hospital recovered, but never achieved a margin of financial safety.

The latest drama began last fall with a power struggle between chief executive officer Howard Jessamy and Dr. Oakley H. Saunders, then the vice president for medical affairs. Jessamy, who was supported by most of the hospital's doctors, asked the board of trustees to fire Saunders, but the trustees, some of whom were civil rights colleagues of Saunders, refused.

The doctors who admit patients to Provident had lodged numerous complaints against Saunders, who they contended was unresponsive. Even Saunders supporters described him as brilliant but abrasive.

Many of the doctors were outraged by the board's refusal to fire Saunders. In October, some physicians, led by surgeon Ernest O. Brown and rheumatologist Margaret Fountain, began sending their patients to other area hospitals. The board responded by firing Jessamy in December and making Saunders the chief executive.

The boycott, which grew to include 60 doctors, took its toll.

"It was devastating, I can tell you that," board chairman Murphy said of the boycott. At least 120 employes were laid off during the boycott and patient load dropped to a low of 29 percent of capacity.

City officials kept their distance from the feud. "It's sad to see two groups, neither one getting anything, and the only one getting hurt is the hospital," Baltimore Mayor William Donald Schaefer said recently.

In March, the hospital was forced to file for protection from its creditors in federal bankruptcy court. Last week bankruptcy court Judge James F. Schneider issued a "memorandum of suggested compromise" telling the board to remove Saunders, urging the doctors to end their boycott and instructing the board to find a new executive and to suspend plans to lay off an additional 138 employes.

The judge's suggestion was "an iron fist in a velvet glove," chairman Murphy said.

In order to avoid having the hospital again placed in receivership, the board reluctantly agreed Thursday night to remove Saunders as chief executive, but decided to keep him on as a paid consultant until a new executive is hired.

Saunders could not be reached for comment last week.

With the boycott now over, doctors are circulating a petition asking that Howard Jessamy be reappointed. Jessamy, who is working as a health-care consultant in the area, said he had doubts that the board that fired him would rehire him, but he said he would consider returning to the $75,000-a-year job if "the authority of the position is abundantly clear."

Provident now must mend fences and cure its monetary ills, community leaders agree. Fountain warns that the hospital will die if it is managed with the "exclusion of the medical staff." She said the board will have to work out grievances with the doctors so they will want to bring their paying patients there.

George Jude, a retired accountant who lives near the hospital, said he would like to see the surrounding community join in a massive fund-raising drive to instill new pride in the hospital and to bring in desperately needed funds and perhaps get some money from the state.

Health care experts have suggested that Provident, like other black hospitals, needs to boost its image by bringing in quality programs and people to appeal to a more diverse group of patients, especially those who can pay for services.

The bottom line, said Rice of Howard University, is that "patients vote with their feet -- they go where they are welcomed."