MERGER SEEMS GOOD MEDICINE IN ST. LOUIS

Merger appears to be good medicine in St. Louis.

Barnes and Jewish hospitals, along with Christian Health Services, which has hospitals in the St. Louis suburbs, merged in 1993 to form BJC Health System.

The group recently added Missouri Baptist and St. Louis Children's Hospital to the system.

Barnes and Jewish hospitals sit on adjacent blocks. Although affiliated with Washington University's School of Medicine, both not-for-profit hospitals competed head-on for years. Each had less than 70 percent of its beds filled.

Barnes, Jewish and Christian hospitals all were strong financially at the time of the merger, with combined annual revenue of more than $1 billion.

With the merger, the hospitals were able to combine their debt and save $17 million in interest expenses.

Some 500 jobs out of a combined work force of 15,000 have been eliminated.

The psychiatric departments of Barnes and Jewish hospital recently were combined and other department consolidations are being considered, officials say.

The new hospital group controls 26 percent of the St. Louis marketplace, giving it increased purchasing power and more influence with managed-care groups, according to Financial World magazine.

Those who favor a merger of Cape Girardeau's two hospitals say it is hospital groups like the one in St. Louis with which St. Francis Medical Center and Southeast Missouri Hospital must compete.

Charles Hutson, president of the Board of Trustees of Southeast Hospital, favors a merger.

Without it and the operational efficiencies it could bring, said Hutson, Cape's two hospitals are in danger of losing more patients to hospitals in St. Louis and Memphis, Tenn.