BE OUR GUEST: HOSPITAL MERGER IDEA NEEDS MORE DELIBERATION

The recent articles concerning the pros and cons of merging the two Cape Girardeau hospitals should be of interest to all citizens in the surrounding area.

I know and respect the heads of both hospitals and their boards of directors. I have no reason to doubt the sincerity or integrity of any of the spokesmen for the hospitals.

But when you consider the importance of health care locally -- plus the national health care discussions, it would appear there may be adequate reasons to take a second look.

Most of us examine a situation from our personal background experience and/or expertise. I personally know nothing about running a hospital.

My business involvement was wholesale hardware, hardware manufacturing and running five lumber and hardware home centers for 14 years.

I do know that we had one credit department, one commodity purchasing department, one advertising department, one accounting department, one personnel department, one price book manager, one drafting department, one president -- the list goes on and on.

All of these department managers served all five locations. When we had overstocks in one locations, we transferred them to another location.

One person took care of our insurance needs, pension decisions and working with our accountants.

If we had a truck or forklift break down at one yard, we transferred one from another location.

We had one location for our bulk commodities with weekly deliveries. By buying together in larger quantities we felt we received better prices. Our inventory turns were better than the national average. Our interest expense on excess inventory was reduced. Our total personnel needs were lower, because each yard didn't need someone to do many jobs that could be done once for all locations.

What I am saying is that duplication of people, facilities, inventory, equipment, etc. can be reduced with multiple locations. Are hospitals different?

Locally, Lee-Rowan Co. of Jackson has been taken over by Newell Co.. Newell has a process called "Newellization." They reduce duplication of personnel, functions, locations, etc. and improve the efficiency and profitability of the combined operations. It is in the works now.

It was mentioned that the possible hospital merger talks of 7 or 8 years ago were called off because of a possible antitrust violation. The climate in Washington is different now. Other hospital mergers are taking place.

When you look at the average underutilization of hospital beds -- 40 percent at St. Francis Medical Center and 47 percent at Southeast Missouri Hospital -- the total shows there are 215 beds on average not being used daily. The total investment in this underutilization would probably be in the millions.

It would be interesting to know the occupancy rate at the two large emergency departments.

Also, how many helicopters and crews are on standby at both hospitals? The possibilities of duplication of services, facilities, equipment and personnel seem endless.

Taking a hypothetical situation: Let's say each hospital did 250 heart operations a year. The state could come up with 350 a year to qualify to continue a heart operation unit. Neither hospital qualifies, so we could conceivably lose both units, doctors and all.

If the units were merged, the 500 operation total would easily qualify as an approved unit. This is normally how the state controls underperforming units, as I understand it. The doubling of operations at a single location would obviously lend itself to improved efficiency. Increased volume and improved efficiencies lend themselves to cost controls.

If each hospital wasn't forced to try and outdo the other on fringes and services, there could very possibly be other savings. Delta Airlines recently switched from hard plastic cups to foam cups in economy class. The savings: $1.2 million per year. Obviously, Delta is larger, but the principle is still there.

As I stated before, I know nothing about running a hospital, but from a businessperson's viewpoint, it would appear there are enough potential savings to explore the idea of merging the hospitals.

It has been mentioned that one hospital has more debt than the other. Any contemplated merge would naturally take negotiation. That's how any merger takes place.

There has been talk about increased collaboration. Could the difference in merging and collaborating be summarized as the degree of collaboration? Total collaboration would be merging.

Obstacles can really be stepping stones to achievement. If it were easy there would be no challenge, no real sense of achievement.

The worst thing could be not to try. The rewards could be great, and the real credit would to those who had the most to overcome.

One of the most difficult things to face is people. If a merger were to develop, it could take a long time, possibly years. Attrition by retirements, reduction in hiring, transfers, etc. would greatly reduce and probably eliminate the need to actually lay off personnel.

The advantage and efficiencies of faxs, computers and modern-day methods of doing business would obviously lend themselves to a multi-location operation.

I respect and appreciate the position of not wanting to tangle with the government about the antitrust hurdle to a merger. But politicians and bureaucrats do change. We see it every day in the newspaper.

There are reasons to do something, just as there are reasons not to do something.

Hopefully, those involved will decide to take another look at the pros and cons of a hospital merger for the benefit of all.

Cliff Rudesill retired in 1984 after 14 years a president of Riverside Home Centers in Cape Girardeau, Jackson, Sikeston, Ironton and Ste. Genevieve. He is a past-chairman of the Cape Girardeau Chamber of Commerce.