ADMINISTRATOR ENCOURAGES PERRY HOSPITAL CHANGES

PERRYVILLE -- Perry County Memorial Hospital administrator Patrick Bira spent two hours trying to persuade 100 people gathered in the American Legion Hall Thursday night that it is in their best interest to allow the hospital's elected board of trustees to turn its operations over to a private not-for-profit corporation. At least some in the crowd left feeling skeptical.

"Their own agenda wasn't clear to me," said a woman who would only identify herself as a Perryville resident. "They told us how strong they are. If they have such strength, why do they want to change?"

Bira and the hospital board called the public meeting to explain the proposal and get public input. Bira said repeatedly that he was presenting a proposal that was not in final form.

The proposal calls for creating a not-for-profit corporation that would run both the hospital and the Perry County Nursing Home. The board would consist of either seven or nine members, with representation from the existing hospital board and the existing nursing home board.

A similar board has run the nursing home since 1969.

Bira outlined the changes necessary to deal with changes in the health-care industry. He said that 66 percent of the money the hospital receives for patient care comes from Medicare. Since Medicare is headed for bankruptcy without changes, he expects that the federal government will cut its payments to hospitals for Medicare patients. Perry County Hospital already spends $2.4 million more on Medicare patients than it receives from the government, Bira said.

Bira said the hospital faces similar problems from insurance companies. As insurance companies merge and take over managed care providers, they will exert more control over how much money hospitals take in for their patients.

If the largest employer in Perry County contracted with one large insurance company to provide its medical plan through a health maintenance organization, Perry County Hospital couldn't afford not to affiliate with it, Bira said.

In addition, private hospitals are beginning to compete for patients in Perry County. Bira showed a slide of an ad for Southeast Missouri Hospital's clinic in Frohna.

"Cape Girardeau is coming into Perry County to do what they can to pull admissions and health-care services out of Perry County," Bira said.

Bira said that by privatizing the hospital's operations, it would be better able to compete with health-care giants and to deal with hospitals. By merging operations with the nursing home, it would be better able to take advantage of economies of scale.

And it would be in a stronger position should it decide to affiliate with another health-care company.

Charles Myer, a Kansas City attorney acting as a consultant to the hospital, said the merged entity with a private board would be able to borrow money more easily. Under Missouri law, a public hospital can't get a line of credit from a bank, while a not-for-profit can.

He said a private corporation could enter into a joint financial venture to, for example, build a medical office building. It would have more flexibility in making contracts with physicians and could recruit and retain them more easily.

After the presentation, members of the audience asked repeatedly about how the new board would be chosen.

Former state senator Leo Rozier was one of them. He said that the board of the nursing home is self-perpetuating, and the public has no input into it.

Bira said the board could be some sort of hybrid, with members appointed by public officials so there would be public input.