Five area hospitals and a number of doctors have formed the region's first physician hospital organization (PHO).

The group hopes to bring better coordinated medical services and more competitive pricing to the region.

MedAmerica HealthNet Inc. links the staffs and services of St. Francis Medical Center and Southeast Missouri Hospital, both in Cape Girardeau; Missouri Delta Medical Center in Sikeston; Perry County Memorial Hospital in Perryville; and Dexter Memorial Hospital in Dexter.

Dr. William Shell of Sikeston, the group's first president, said the not-for-profit group incorporated last month and hopes to be operational by September.

Following the official announcement at a press conference Wednesday, a representative of a business health group and local physicians praised the undertaking.

"We're very supportive of this beginning effort," said Mary Dunn of the Southeast Missouri Business Group on Health. "This is a good-faith effort on the part of the hospitals and physicians to provide quality health care at affordable costs."

Dr. Kent Griffith, president of the Cape Girardeau County Medical Society, called it "a very positive step." He expects physician participation to be very high, with many of the medical society members already lending their endorsement.

Stephen M. Telford, chief operating officer of Internal Medicine Group, also attended the press conference and spoke favorably about the PHO's objectives. "A large number of our physicians are on board already," he said. With 17 doctors, it is one of the largest physician groups in Cape Girardeau.

The announcement was made before a standing-room-only audience of medical personnel and media in the Harrison Room at Southeast Missouri Hospital. Only Shell spoke, but he was flanked by hospital officials and physicians from throughout the region.

Shell said the network was developed in response to both state and national health care reforms.

The organization represents a "commitment to reducing overall costs of health care," he said.

Specific details of the plan have not yet been worked out. But for the organization to be successful, Shell said costs will have to be competitive with plans in St. Louis and Memphis.

He believes the organization should help reduce competition among member hospitals.

If members feel "they won't be overrun by another hospital, they won't have to have the duplication of services.... That's our intent," said Shell.

The issue of potential layoffs was also raised at the press conference. "Managed care, in general, involves job layoffs ... at least through attrition," said Shell.

But he pointed out that an aim of the organization will be to keep more patients at participating hospitals as opposed to seeking treatment in St. Louis or Memphis.

Griffith said later that doctors are referring patients to St. Louis because of better pricing through managed care contracts, not better service. "We can keep the patients here if the prices and products are competitive," he said.

Shell said the organization should help build access in that an atmosphere of more cost effective, quality care should boost physician recruitment.

He hopes the first consumers of MedAmerican HealthNet will be medical workers.

"The two hospitals and all the doctors' offices combined represent some of the largest industries in town -- over 7,000 people. If we can't sell it to them, we can't sell it to the public," he said.

Jim Wente, hospital administrator at Southeast, said the endeavor should not be seen as a merger of area hospitals. Instead, it will coordinate hospital efforts and services.

With health care changes on the horizon both statewide and nationally, Wente said this organization will help keep valuable medical assets in the local community.

"We have a pretty good idea what reforms are coming down the line," he said, adding that the integrated health care delivery system should help prepare providers for these changes.

Wente feels the hospitals are already doing a good job of maintaining costs. As such, participants may see stabilized costs as opposed to lowered costs, he said.

St. Francis Medical Center Administrator John Fidler said that by pooling resources hospitals can expand delivery systems. Costs can be better contained by reducing duplication of testing and procedures, and better coordination of care and pricing, he said.

By using the resources of the entire network, the system can become more cost effective, Fidler said.

"We're not talking about cheap care, we're talking about better care," he said.

Fidler said the services may also become more mobile between the five hospitals.

In addressing the possibility of lost jobs, Fidler said there will always be room for health care professionals who are caring and willing to learn new skills. "Health care is changing, and we have to be willing to change," he said.

A number of businesses, physicians and hospital officials will be involved in crafting specifics of the plan.

Dunn hopes that cost containment, duplication of services, and quality health care will be addressed.

Such a plan, she said, "is more than discounted prices. It's efficiency. They must deliver what the community needs in the most efficient way to give us quality health care at affordable costs."

She feels a key to the plan's success will be a high level of participation by physicians. Griffith feels that will come.

"Hopefully, we will see some participation by all physicians in the area," said the medical society president. "The future of health care is going to require physicians to work in some kind of managed care environment."

He said from the physicians' standpoint, it's very important that the managed care leave the medical decision-making to the doctors and patients. "That's critical," he said.

Telford said in the beginning some physicians may not be willing to accept the fee schedule and won't join.

"But over time patients may be guided away from their practices," he said. "If this plan is successful, non-participating physicians will lose their market share and have to participate. That's what managed care does."

He feels most physicians are very positive about this proposal.

Officers of MedAmerica HealthNet are: Wente as vice chairman; Dr. Mike Brown, a Cape Girardeau radiologist as secretary; and Patrick Bira, administrator of Perry County Memorial Hospital as treasurer. Board members are: Fidler, Charles Ancell, administrator of Missouri Delta Medical Center; Win Coburn, administrator of Dexter Memorial Hospital; Dr. Ronald Hill of Dexter; Dr. Ramiro Icaza of Jackson; Dr. David Kapp of Perryville; and Dr. David Westrich of Cape Girardeau.