HOSPITALS SAY STUDY TO WIND UP NEXT MONTH

A study to determine cost savings through a permanent affiliation between Cape Girardeau's two hospitals will be finished by the end of March.

A study committee made up of representatives from the two hospitals -- Southeast Missouri Hospital and St. Francis Medical Center -- has hired the Arthur Andersen consulting firm to carry out the efficiencies study.

The study will identify two key objectives, said James Sexton, president and chief executive officer of St. Francis.

"One will be the extent of the cost savings under the assumption that there is an affiliation, and that will be used by the study committee and the respective boards as they review the efficacy of doing this deal," Sexton said.

It will also give an independent, non-biased review that the hospitals will provide to the federal government should they decide to pursue affiliation, he said.

James Wente, administrator of Southeast, said the study will "look at the operations of the two hospitals, draw comparisons between those two operations and help us identify where the savings are." He said it will determine how savings could be achieved through affiliation.

Wente said the study will look at what savings might be achieved through different types of affiliations.

The study will focus on staffing and possible savings from combining medical, support and technological services and facilities, Wente and Sexton said.

The joint study committee will review the efficiencies study, and then the study will be reviewed by the boards of both hospitals.

The boards will then decide whether and how the affiliation should take place.

Wente and Sexton said the local process should be completed by the end of July.

If the hospitals agree to some type of affiliation, federal anti-trust agencies -- the Federal Trade Commission and Department of Justice -- will be notified of the decision and may decide to investigate for anti-trust violations.

"The time frame is pretty much out of our control," said Sexton. "The things we need to do we can get done by July."

The process is "pretty well on that timetable," Wente said. "The question is going to be how complete the efficiencies study is and then how the federal government will react to what the hospital boards decide they would like to do."

Sexton said the study committee expects the federal government to investigate, which could add several months to the process.

A question many ask is what form the affiliation will take. That is still under study, Wente and Sexton said. "That's something that we're working on regularly through our joint study committee," Wente said.

The decision will be made by the time the federal government is notified of the hospitals' decision.

Sexton said in December when the hospitals announced their intent to work toward affiliation that neither hospital building would be closed.

The affiliation could take the form of combining administrative functions, support services or medical services such as cardiology, neurology or radiology, and testing services.

Wente and Sexton plan visits to hospitals in Clinton, Iowa, and Owensboro, Ky., where secular and Catholic hospitals have undergone successful mergers. The trips have been scheduled in the past but haven't been made because of inclement weather, Wente said.