Health BIZ

By Rudi Keller

Business Today

With a total payroll in excess of $170 million annually, Cape Girardeau's two hospitals spend more money on wages than entire sectors of the economy. Add the $84 million payrolls for doctors' offices and the picture becomes clear: health care is taking care of Cape Girardeau.

If Cape Girardeau had the average medical presence for a community its size, selling the city as a place to do business would be much tougher, said Mitch Robinson, executive director of Cape Girardeau Area MAGNET. The thought is something he doesn't relish.

"The medical community is critical part of the livelihood of this area," Robinson said.

Each hospital employs more than 2,000 people and they leapfrog each other as the county's largest employer. According to the latest figures -- provided by the hospitals -- Southeast Missouri Hospital has the most, with 2,043 employees. Saint Francis Medical Center is right behind at 2,037.

Both figures represent a 25 percent increase in employment in the last four years. Wages paid by the hospitals have grown even faster, up 63 percent since 2003. According to the most recent figures available for Cape Girardeau, the hospitals paid out 25 percent more in wages in 2002 than all retail stores in the city. In fact, at that time, the only whole sector of the economy with more wages paid than the hospitals was manufacturing. Manufacturing employment has remained steady or declined in Cape Girardeau in the years since that measure was taken by the U.S. Census Bureau.

"Obviously that generates spending in the community, which generates tax revenues," Robinson said. "It helps the housing market, and higher quality, higher value homes are going to be sold. On retail items, it means more expensive cars. The higher levels of income help the entire community."

Payroll spending is only a part of the story, because the two hospitals embarked on expensive construction programs in the past decade. Saint Francis began a five-year, $48 million expansion program in 2002 that included the $29.5 million, 145,000 square foot health and wellness center known as Fitness Plus. Not to be outdone, Southeast Missouri Hospital has spent $52.6 million since 2001, which included renovating a 58,000-square-foot former grocery store into HealthPoint Plaza, another health and rehabilitation center.

"I have been here 33 years, and it is not unlike any other business -- if you are going to compete, you have to have the products to compete with," said Jim Wente, administrator of Southeast Missouri Hospital.

In doctors, nurses, dentists and other medical professionals, Cape Girardeau County far exceeds what would be expected based on its population. There are, for example, 4.7 doctors for every 1,000 people, double the national average.

But looking at the figures in that manner can be misleading, said Dr. Eric Morton, an osteopathic doctor specializing in obstetrics and gynecology. Cape Girardeau's medical community draws patients from a huge region with 350,000 to 400,000 people, said Morton, a former president of the Cape Girardeau Medical Society.

"It is an anomaly," he said. "We have 500 active medical beds in Cape Girardeau. For a town of 35,000, that is unheard of. We have four full-time and two part-time cardiothoracic surgeons, which a lot of times you are not going to have in a town 10 times this size. And we have seven neurosurgeons, which often you are not going to have even in a large community."

People don't stop getting sick or injured when other sectors of the economy sag. That shelters the region from downturns that send shock waves through other communities. "For those who reside in this community, this translates into stable employment for more than 2,000 people, recruitment of top specialists and clinical staff who provide nationally recognized, state of the art health care services, and the spinoff support for area retailers, hotels, restaurants, shopping centers and construction firms," said Steven Bjelich, president and CEO of Saint Francis Healthcare System.

The strong medical presence in Cape Girardeau builds the economy in more indirect ways as well, Robinson said.

"The best point is using it as a selling tool," he said. "You can come to the community and we have first-rate emergency medical care, with both ERs rated at very high levels. We have specialty care and a wide variety of specialists. There are all sorts of medical treatment you can get without leaving the community."

The sales job works both on businesses unrelated to medical care as well as on doctors and other medical professionals. The breadth and quality of the medical care available, as well as the characteristics of Cape Girardeau all are attractive, Morton said.

The result is a growing and self-renewing pool of professionals, he said.

"I was a medical student who came through here in 1993 and I loved the area," Morton said. "I fell in love with Cape Girardeau. I liked the doctors, I liked the people and I decided that when I got done with my training if I had the chance to come back here, I was going to."

As he spoke in an interview, Morton ticked off what makes Cape Girardeau attractive. The town is relatively clean, quiet and safe, and the medical community is strong. It is within comfortable driving distance of Memphis, Tenn., or St. Louis. Outdoor opportunities are nearby with open countryside that attracts hunters, anglers, boaters and photographers.

"You have all the benefits of a large community, you have access to extremely large communities and you have the benefits of being in a rural area and that is why I came here," Morton said.

And the economics of living in Cape Girardeau aren't bad either, he said. "There is a lot of opportunity from a physician's point of view to make a decent living here, as opposed to having to fight, in a large city, 50 other people for a limited amount of practice opportunities."

The ability to attract specialists looking for an escape from the expense and aggravation of big cities feeds competition between the hospitals. According to material prepared by Saint Francis Medical Center, the hospital has recruited 86 physicians to the region since 1999.

Fierce competition between the hospitals manifests itself in numerous ways. Wente acknowledged in an interview that he sees little choice but to match Saint Francis when it adds a new service. And as a result, charges at Cape Girardeau's hospitals are above the regional average but in most cases at or below national averages.

"Competition can be very expensive," Wente said. "Competition in health care in my mind doesn't drive prices down like it does in other kinds of business enterprises."

New technology, additional employees and luring doctors all add to that expense, he said.

"You either compete or you consolidate," Wente said. "The federal government won't let us do both. It is clear we are not going to consolidate, so it is also clear to me that we are going to compete and from my perspective, we want to be the hospital of choice."

With all that competition, the focus has been on providing the facilities and physicians capable of providing specialized care. Cape Girardeau has more than 300 licensed doctors. But it needs more, Morton said, and the area that needs attention is to attract physicians interested in providing basic care.

"Family physicians are the crux and basis of what all medicine revolves around," Morton said. "Those are the ones that take day-to-day care of patients. They see them for things like runny noses and scratchy throats and their hearts and their lungs and all kinds of basic health care."

While the medical community makes selling Cape Girardeau as a place to do business easier, Robinson said MAGNET has begun to view the brainpower associated with the medical community as an asset that can be exploited to attract businesses that supply health care.

"It is something we have looked at," he said. "Once you have a strength, what you look at are the add-ons. And that is something we need to focus on harder."

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Health Care Facts about Southeast Missouri

Selected Licensed Professionals

License Cape Girardeau Perry Scott Butler Stoddard Bollinger

Medical Doctor 273 8 57 115 15 2

Doctor of Osteopathy 38 3 7 15 8 0

Registered Nurse 1,196 160 429 402 235 73

Licensed Practical Nurse 251 65 289 236 173 41

Physical Therapist 72 13 17 21 12 1

Dentist 32 7 16 15 8 1

Source: Missouri Division of Professional Registration

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Hospital Beds and Payrolls (2003)

Hospital Staffed Beds Staff* Payroll(in millions)

Perry County Memorial 25 263 $8.7

Saint Francis Medical Center 243 1,675 $55.6

Southeast Missouri Hosptial 216 1,675 $48.7

Missouri Delta Medical Center 158 720 $26

Poplar Bluff Regional Medical Center 266 1,248 $34.2

John J. Pershing Medical Center 56 371 $43.2

Missouri Southern Health Care 41 210 $5.8

Source: Missouri Department of Health and Senior Services

* Staff includes full-time and part-time employees