RESIDENTS SPEAK ON MERGER

Some 300 people turned out Tuesday night to hear pros and cons of the proposed merger of Cape Girardeau's two hospitals.

Southeast Missouri Hospital and St. Francis Medical Center held a town hall meeting at the Osage Community Centre to outline plans for the merger under consideration.

For more than two hours, the public aired opinions and asked questions about the merger's impact on health-care costs, competition, quality of care and employment.

Hospital officials say the merger is necessary to maintain the scope and quality of health care now available in Cape Girardeau and to maintain local control of the hospitals while containing health-care costs.

The merger would save a projected $44.4 million over five years. Hospital officials have agreed to enter into a consent decree with the Missouri attorney general's office to guarantee those savings. A price freeze would also be guaranteed for two years, to be followed by three years in which price increases would be tied to the Consumer Price Index.

The hospitals have not reached any agreement with the state on the merger, nor has either hospital's board voted to approve merging, hospital officials pointed out Tuesday night.

James Wente, administrator of Southeast Missouri Hospital, said the two hospitals can't continue to support duplication of services.

"If the hospitals can't afford continued duplication, that means you can't afford it, because you have been financing it, and we want to stop that," Wente said.

Wente said he has often heard consumers ask why the community needs two heart programs, two helicopters and other competing services. The merger, he said, would end that duplication.

"We want to work together. Some of the things we have to do to work together, we can't do without coming together," Wente said.

Eliminating duplication of services would not mean eliminating the services themselves, he said. Under a "Centers of Excellence" model now in the merger plan, tertiary care programs would be divided between the two hospital campuses.

The two hospitals can't divide those services up -- with one taking, for example, cardiology and heart surgery and the other taking neurosurgery and orthopedics -- without merging, Wente said, because that would be a violation of anti-trust laws.

Bob Drury of Drury Southwest said he opposes the merger because it would eliminate competition and lead to price increases.

"If this thing materializes, we're going to see an uncontrollable price situation rather than cost control," Drury said.

He said he also worries that the merger would be "the beginning of a setup for a for-profit system to come in here and take over the whole setup."

He also asked whether the hospitals' boards had had the two hospital properties appraised, saying there is a "big inequity" in the value of the two campuses.

Jerry Zimmer, who serves on Southeast's board, said the two hospitals' profit, admissions and debt are comparable.

"The hospitals are community assets. We want these assets in our community forever," Zimmer said.

Charlotte Craig, director of the Cape Girardeau County Health Department, said she favors the merger.

The proposed community health foundation could help remove a "blatant, blatant barrier to health care for the medically indigent, poor people and people on Medicare and Medicaid," Craig said.

The foundation could address a variety of community health concerns, including increased primary care and prevention of chronic disease, she said.

"If you don't think that could make our community a healthier place to be, you've got another think coming," Craig said.

Health-care cost was a major concern at the meeting.

Jacob Urhahn wanted to know what the price freeze would mean in "before and after figures for patients, like room costs per day, as opposed to what it will be in the future." He said, "These large figures that you're advertising don't really have any meaning to the consumer."

The hospitals can't compare individual charges until the decision to go forward with the merger is made, said James Sexton, president and CEO of St. Francis.

"If you freeze prices, then the room rate as it is now remains the same," he said.

Some employers in the area -- notably Procter & Gamble -- have complained in meetings with hospital officials that they receive greater managed care discounts from St. Louis hospitals than they can get locally.

George Leonard, one of the anti-trust lawyers handling the merger for the hospitals, said hospital officials continue to meet with local employers to work out those concerns and have had "some very positive discussions" regarding the merger proposal.

But, Leonard added, the merger team can't get the price comparison data to back up employers' claims of lower rates in St. Louis.

"We still are unable to find any actual price data for St. Louis," said Leonard. "We continue to hear that somebody else has it. The anti-trust laws are, frankly, sometimes a barrier to exchange price information, and they should be."

Leonard said Cape Girardeau's hospitals "don't know what the other charges, much less what the hospitals in St. Louis are charging."

He did point out that data from the state show the local hospitals' Medicare charges are below the median for the state.

Harry Rediger, chairman of St. Francis' board, said employers "want deeper cuts. We're listening, and we're looking at it. But we have costs. We have fixed costs."

Rediger said the Joint Study Committee, made up of representatives of both hospitals, have made site visits to three hospitals that have undergone mergers and learned those systems experienced greater savings than they had projected.

Rediger expects the same if Cape Girardeau's merger goes through.

Patient care under the merged entity was also a concern Tuesday night.

C.J. Niswonger, a nurse, questioned how complications would be handled under the Centers of Excellence if, for example, a patient having heart surgery at one hospital developed problems requiring neurological services at the other hospital.

Sexton said, "The answer is, the patient would be stabilized and then moved to the hospital that had the needed services." That is the approach taken at other hospitals with the Centers of Excellence model, he said.

Niswonger expressed concerns about patients being "shipped across town."

Dr. Michael Korda, who runs Southeast's emergency department, said the transportation could be a concern. But, he added, "I think that's better than stabilizing them and transferring them to St. Louis."

Korda said he has a "very real concern that in the future that if we don't affiliate, we may have to stabilize a patient here and then air-evac them to Memphis or St. Louis, and to me, that's worse."

Korda said the merger would mean the medical staffs working together "rather than working on beating each other's brains out. I feel that this affiliation is the best way to do that for this particular community."

Marilyn Mayfield, who works at P&G, said continued competition between the two hospitals will ensure greater quality of care.

"I think that if you have competition, you have better service," Mayfield said.

Tom Campbell, another attorney handling the merger for the hospitals, said the community has to consider competition in a larger scope, not just in Cape Girardeau County.

"It's clear that when these two hospitals merge, the competition between them will stop, but you have to evaluate it across the whole market," he said.

More than 55 percent of the patients admitted to the two Cape Girardeau hospitals come from nine surrounding counties in Southeast Missouri and Southern Illinois, Campbell said.

Those patients could go to St. Louis or stay in their home counties for medical care, he said.

And those St. Louis hospitals and the other hospitals in Southeast Missouri and Southern Illinois are the competition Southeast and St. Francis face, Campbell said.

Raising prices after the merger, rather than freezing them as promised, could scare off that 55 percent of patients, he said.

"It would take no more than two patients a day to defeat a price increase," Campbell said.

The hospital industry is plagued with overcapacity of facilities and patient beds and decreased reimbursement through Medicare and Medicaid and managed care contracts, Campbell said.

At the same time, he said, medical advances mean patients have to spend less time in the hospital, but when they do require inpatient care, they need more support because they are more seriously ill.

"Hospitals are in a squeeze," Campbell said, and mergers are happening nationally as hospitals look for ways to stay competitive.

Others voiced concerns that the merged hospitals wouldn't have any incentive to court managed care contracts.

That isn't the case, Wente said. "The hospitals, independent or together, need to be proactive in these contracts," he said, adding that Southeast now contracts with 16 or 17 managed care plans and is negotiating for more.

Dr. Gordon Eller, a Cape Girardeau physician, said that while he favors cooperation between the hospitals, and most physicians favor the merger, he is concerned the merger would mean doctors would have no input into the merged entity's operation.

He also said he worries that the merger might "create a monopolistic situation" for one segment of the community or another in hospital governance.

Employees from both hospitals questioned whether, under the Centers of Excellence model, they might work at one campus one day and the other the next.

Wente and Sexton said it is possible that employees might be sent from campus to campus, but management will work to limit that kind of scheduling.