MERGER MEANS ANTITRUST SCARE

Would a merger of Cape Girardeau's two hospitals violate federal antitrust laws? Supporters say it wouldn't, while opponents contend otherwise.

Those who support such a merger here, including officials of Southeast Missouri Hospital, say such mergers have been allowed in other two-hospital cities.

In today's climate of health-care reform, more hospitals are merging nationwide.

Charles Hutson, president of the Southeast Missouri Hospital Board of Trustees, said there has been a "softening in the Justice Department" when it comes to dealing with such mergers.

But officials at St. Francis Medical Center, who the idea, said a merger locally would violate antitrust laws.

John Fidler, president of St. Francis, said that the two Cape hospitals combined provide more than 95 percent of the hospital care in this area.

"Anytime you go over typically about 45 percent, you run into the risk of being in violation of antitrust," said Fidler. "A merger potentially decreases the competitive situation, which could potentially result in price fixing and negative benefit."

Fidler said he has received legal advice that a merger is out of the question.

Mergers have been allowed in two-hospital towns, but generally only because one hospital is in financial trouble and in danger of closing, and it can proven there would be a substantial cost savings, Fidler said.

But in Cape Girardeau, both hospitals are financially strong.

It doesn't make sense, Fidler maintained, to spend millions of dollars on legal fees in an effort to secure such a merger.

The possibility of a merger was raised seven or eight years ago, Hutson said. At that time, a small group of doctors opposed the move and threatened to bring legal action on antitrust grounds. Hospital officials abandoned the merger idea at that time.

But Richard Livengood, president and chief executive of Marion (Ill.) Memorial Hospital, said antitrust laws shouldn't be viewed as an insurmountable stumbling block to a merger. "If you want to do something, you can find a way."

A case in point is Danville, Ill., a city of about 40,000, which had two not-for-profit hospitals, one of which was Catholic-run.

In 1988, the two hospitals, both of which were in poor financial shape, merged.

Livengood previously worked for Lakeview Medical Center and helped direct the merger of the two institutions.

A study in 1987, he said, showed that the charges to consumers in a one-hospital town were lower than in a two-hospital community.

"Competition doesn't normally drive down hospital costs, it results in duplication," Livengood said.

Since the merger in Danville, the number of hospital employees has climbed from 1,100 to 1,300, he added.

The health-care climate today favors mergers, he said. "Collaboration is the word of the '90s. Competition was the word of the '80s."

The 89-bed Marion hospital is exploring joining forces with several other Southern Illinois hospitals, including Carbondale's 150-bed hospital.

The proposed alliance could involve a merger, although such talk is only in initial stages.

The word "merger," however, has a negative connotation for some people. "When you use the M word, the immediate reaction is that they are going to close the hospital at Marion," Livengood said.

But he said there hasn't been any discussion along those lines. "We are a very viable institution."