LETTERS TO THE EDITOR: HOSPITAL MERGER MEANS BETTER HEALTH CARE FOR THE REGION

(This letter was sent to James Layton of the Missouri attorney general's staff following a hearing Sept. 28 on the proposed hospital merger.)

Dear Mr. Layton:

As a presenter at last night's public hearing and also as a listener and observer, as I know you were, it allowed me to crystallize my thoughts about the merger of St. Francis Medical Center and Southeast Missouri Hospital here in cape Girardeau. As a result, I would like to share them with you.

First of all, it was obvious at last night's meeting that the members of the community are united on two very clear points -- that the cost of health care be reduced and that the levels of quality care be maintained or improved.

What really became clear to me last night is that the present model of health care in Cape Girardeau, which has continued for 70 years, is no longer capable of reducing costs due to the inexorably high cost of equipment and services (relative to St. Louis and Memphis) with the smaller customer base in our region. It is obvious that two individual entities the size of Southeast Missouri Hospital and St. Francis Medical Center cannot lower costs and continue to compete on services with the larger metropolitan systems. However, if they are allowed to merge and if the medical staff will work to control their part of the health-care quotient, something that the hospitals are not able to dictate, then lower labor costs will assist in bringing health-care costs close to parity with the major metropolitan areas.

It is my belief that a united health system would contribute greatly to the quality of care. For example, in the rush to develop a competitive program, at times a poor choice has been made on the selection of physicians to operate that program. The extreme competitive pressures that force that decision would not exist if the hospitals were together where a more reasoned approach and assessment of need and quality can be made.

It is also my belief, Mr. Layton, that the issues that require a positive decision on the merger in Cape Girardeau were really caused by the numerous mergers in St. Louis and Memphis and the resultant cost adjustments that developed. To prevent Southeast and St. Francis from competing on a level playing field with these major organizations would doom them to a slow and agonizing death. Hospitals are very complex organizations. When you erode certain services that assist in supporting other components of care, urgent and necessary trauma services would be compromised.

I was especially moved by the comments of Southeast Missouri Hospital's medical director about the "golden hour" of trauma care. We live in a rural area where trauma care is three to four hours away form arrival at a major St. Louis institution. If some of our vital services, such as open heart, neurosurgery, and other similar services were deemed not financially viable in Cape Girardeau, then a significant number of trauma patients would be DOA in St. Louis.

In the immediate region we have observed a number of successful mergers in communities like ours. A number of years ago, St. Joseph, Mo., merged its two institutions successfully, and just recently Owensboro, Ky., did the same. In Tupelo, Miss., there is a successful single-hospital community which provides outstanding care at reasonable costs. Without question, however, the real competitors for health-care dollars in Cape Girardeau are the already merged systems in St. Louis and Memphis. It's my belief that your positive decision to support the merger of our two community hospitals in Cape Girardeau will go a long way in allowing us to compete on pricing and quality.

In reality the business coalition who appeared before the meeting last night are saying that they want the same things. Unfortunately, the only problem is their solution will doom both hospitals to weakened organizations that will become part of the metropolitan system to the great detriment of our community. Those businesses opposed to the merger insist on comparing Cape Girardeau to the already merged organizations in St. Louis and Memphis. Obviously, those merged organizations of several thousand beds are better able to drive cost ratios than smaller unmerged hospitals in Cape Girardeau.

One of those companies, Procter & Gamble, has dramatically expanded its plant a number of times to obtain economies of scale, yet P&G opposes the hospitals here having the opportunity to do the same. We agree that health care needs to achieve lower costs in Cape Girardeau, but we are stunned at the total lack of understanding as to how that can be accomplished in our community without merger.

As I mentioned in my testimony last night, a large city hospital will without question have lower costs when it does several thousand heart procedures as opposed to a few hundred in a rural tertiary facility. Companies also locate here because of the lower costs of labor, land, construction and so forth. Frankly, it is impossible to transport 2 1/2 million people to Cape Girardeau, and that's the primary reason why, along with the merger of facilities, that you will have lower costs in the city. It is my feeling that a merger of the two hospitals we have, with lower labor costs, should allow us to come close to the large economies of scale in the major cities. However, it would be impossible to do so without the merger.

Health care is a local business that should be managed by the people in our community. Please give them the tools that will allow them to do so as they carefully give attention to lowering the cost of health care in Cape Girardeau.

EARL H. NORMAN, Chairman and Chief Executive Officer

Health Services Corporation of America

Cape Girardeau