Missouri's attorney general has opened fire early on the proposed merger of the only two hospitals in Cape Girardeau, setting the stage for yet another antitrust battle in the state.
Echoing his stance on another Missouri hospital merger, in Poplar Bluff, state Attorney General Jay Nixon said late last week that the union of 243-bed Southeast Missouri Hospital and 264-bed Saint Francis Medical Center would cripple competition in the Cape Girardeau market.
"There is not sufficient protection of choice for consumers, employers and physicians in the proposed plan," Nixon said in a statement. "The community commitment in this proposal is inadequate, and the one entity to emerge from this merger would not provide the competition for prices and services that two active hospitals can provide."
Thomas Campbell, an antitrust attorney representing the two hospitals, said Nixon's words are premature.
"We have not completed everything yet," said Campbell, of Gardner, Carton & Douglas in Chicago. "We are surprised that he saw fit to jump the gun on this."
The hospitals have not filed notice of their merger with federal antitrust authorities, Campbell said. The hospitals' boards have yet to approve a final deal.
"We have had some opposition from doctors and a small group of employers," Campbell said. "We want to address those concerns. Many of the questions the attorney general is asking are ones that we are trying to answer."
The Cape Girardeau hospitals announced their intent to merge last fall (Oct. 5, 1998, p. 22). Since then, the hospitals have circulated a draft "community commitment" throughout their service areas. They continue to solicit comments on the document, which promises certain antitrust safeguards and guarantees cost savings of $44 million.
In April 1998, Nixon's office sided with the Federal Trade Commission, which sued to block the marriage of the only two acute-care hospitals in Poplar Bluff (April 20, 1998, p. 2).
The state and federal governments won their case in U.S. District Court in Cape Girardeau, but an appeal is pending.