MORE VIEWS ON MERGER PRESENTED; ATTORNEY GENERAL'S OFFICE HOLDS HEARING ON HOSPITALS

Representatives from the Missouri attorney general's office listened at a public hearing Monday night to opinions and concerns of those who favor and oppose the proposed merger of Cape Girardeau's two hospitals.

Nearly 300 people crowded into a cramped meeting room at the Osage Centre to explain to James Layton and Forest Hanna III, both of the attorney general's office, why they support or don't support the proposed merger of Southeast Missouri Hospital and St. Francis Medical Center.

The two hospitals have been in talks since late last year about the possibility of merging.

Layton, the chief deputy attorney general, told the crowd that his office was charged by both federal and state antitrust law to preserve competition in the marketplace. Monday's public hearing, he said, was to elicit opinion from the community about the proposed merger of the two hospitals and the effect a merger would have on competition.

The opinions Layton heard varied from those who oppose the merger because it would diminish competition within the city to those who favor the plan because it would allow the merged hospitals to better compete with hospitals outside Cape Girardeau, especially those in St. Louis, Memphis and Southern Illinois.

Cape Girardeau Mayor Al Spradling III, who spoke in favor of the merger, said failure to approve the plan would probably lead to escalating costs because of the unnecessary duplication of services, equipment and facilities.

He also said that without the merger one or both of the hospitals could be purchased by a hospital conglomerate from St. Louis or another city. Many of the services now provided in Cape Girardeau might then be moved out of the city to other areas, he said.

If the services are lost in the city, physicians, their staffs and their patients would no longer come to Cape Girardeau, said the mayor. The end result, Spradling said, would be the loss of sales tax revenue and the subsequent need to cut services in the community.

Others said the merger would mean the diminishing of competition and the possibility of decreased medical services.

Kathy Brown, who spoke on behalf of Procter & Gamble Co., opposed the merger on the basis that it would eliminate competition.

"Competition can make a difference in Cape Girardeau. With the merger, local competition by definition will go away," she said. "Allowing Cape Girardeau to become a one-hospital community is not in the best interest of the community."

John Joyce, who spoke on behalf of the two hospitals, said the question of competition can't be limited to speaking about hospitals within Cape Girardeau.

Joyce, who worked for 20 years in the antitrust division of the Department of Justice, said the question was "who is competing?"

"If you are living in Cape Girardeau with two hospitals in the middle of town, then why would you ever permit them to merge?" Joyce asked.

"But if you live outside of Cape Girardeau, things look differently," he said.

He presented figures that showed nearly 90 percent of all Cape Girardeau County residents who enter a hospital go to one of the two Cape Girardeau facilities.

But in the surrounding counties that the hospitals count as a part of their market, only 40 percent use the Cape Girardeau hospitals -- 22 percent use Southeast Missouri Hospital and 18 percent St. Francis Medical Center. The other 60 percent go to other hospitals.

The competition the hospitals face are not simply with each other, Joyce said, but with hospitals in cities such as St. Louis and Memphis.

Layton told the crowd that the attorney general's office was in Cape Girardeau to gather information about the proposed merger and the effect a merger would have on the community.

"But we're not voting here," Layton said. "It's not about occupying time or who can speak the loudest."