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Local doctors, employers meet to discuss acquisition

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by Paul Flemming

SBJ Staff

Physicians and employers met June 2 to discuss the implications of a proposed Cox Health Systems acquisition of Columbia Hospitals in Springfield.

The doctors and some employers will continue to meet to discuss both opposition to the acquisition and alternative ownership of the hospital that holds about 7 percent of the health care market in town. One possibility being explored is a bid to purchase Columbia by a coalition of physicians, employers and employees.

"I don't know the economics behind owning and operating a hospital; we're in the box business" said Kevin Ausburn, chief financial officer of Southern Missouri Container Inc., who attended the meeting. "I would like to think there would be that possibility. It's being done elsewhere in the country. I like the idea behind a physician-owned and -operated facility."

Ausburn said Southern Missouri Containers self-funds its health care plan for employees.

Self-funded plans are common, Ausburn said, and many employers instituted them about 10 years ago when health care insurance premiums were increasing at up to 20 percent a year.

"One of the things that concerns me about a local hospital buying up the only viable alternative to (St. John's and Cox) is that you lose that competition" that acts to keep prices low, Ausburn said.

"The competition is not St. John's, it's the independent physicians," said Dr. Bill Reynolds, an independent physician. "The one thing that can keep prices down is the independent physicians, and Columbia is the place that's been friendly to them."

The June 2 meeting was organized by the Ozarks Area Business Group on Health. Barbara Pruett, co-vice chair of the group, said the meeting was held to allow employers to learn more about the proposal. About 15 attended.

"The meeting created, from the business group perspective, an audience of employers who were interested in health care. At this point we're not taking a position on anything," Pruett said. "We're looking for quality health care at a good price."

She said any further meetings or action by attendees would not be as Ozarks Area Business Group on Health. "As individual employers, if they want to contact (doctors), they can certainly do that."

Reynolds said another meeting is planned with employers representing up to 15,000 employees.

Though management of both Cox and Columbia will not confirm the proposed deal, a spokesman for the Missouri attorney general said that office and the Federal Trade Commission have had the proposal under review since March.

The regulatory review is to determine if the deal would be anticompetitive. The agencies could seek to block all or part of an acquisition if they considered it contrary to federal or state antitrust law, representatives said.

"I'm sure the FTC people and the attorney general are getting most of their information from Cox and Columbia (about) why this is such a good idea. They have to sell it that way," Reynolds said. "Our intent is to let the FTC and attorney general and everybody else who will listen to us know that competition is good for this community."

Reynolds said more than 1,000 letters in opposition to the acquisition have been sent to the regulatory agencies by patients. Other independent doctors have also written letters to the FTC in opposition.

Dr. Charles Mauldin, president of the board of Physician's Choice, said the board voted to voice its opposition.

"We think it's in the best interest of the community (for Columbia) to stay independent," Mauldin said.

He said the growth of Physician's Choice, representing about 100 independent doctors in the area, has been slowed by St. John's and Cox's actions.

Physician's Choice has had "difficulty having the group grow because physicians have been intimidated by" St. John's and Cox, Mauldin said.

The group's letter to the FTC points out that "the two large hospitals are impeding our growth, and without Columbia we will have little if any chance of going forward."

Though Columbia is owned by the largest hospital corporation in the nation, Reynolds said the local hospital's management has been independent-friendly. He said, however, the hospital's history of out-of-town corporate ownership has hurt.

"It's been up for sale (by a succession of corporate owners) since it was built here," Reynolds said. "Enough's enough, I say. If people in Springfield who have a vested interest in the community are in control of this I'm talking about the businesses, the physicians and the employees it's in the best interests of the community."

Reynolds said other buyers have expressed interest in buying the hospital, but those groups are from out of town. "A local hospital controlled and owned by the physicians (would result in) a friendlier, healthier environment."

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