MERGERS: DOUBTS SURFACE ABOUT UC- STANFORD HOSPITAL DEAL

      Less than four days before they are scheduled to consider a
 proposed merger between University of California San Francisco
 (UCSF) Hospital and Stanford University Hospital, regents from
 the University of California (UC) system "are raising serious
 questions" about whether the deal makes fiscal sense, SAN
 FRANCISCO CHRONICLE reports.  The deal would group Stanford
 Hospital and Packard Children's Hospital with UCSF and Mount Zion
 Medical Centers.  
      NO DEAL:  In a memo obtained by the CHRONICLE, Regent Frank
 Clark told UC President Richard Atkinson that the merger has
 become "increasingly questionable," in light of financial figures
 showing that Stanford Hospital has a "history of extremely large
 operating losses."  Clark said that the merger is "inexplicable,"
 considering Stanford Hospital's losses and UCSF Hospital's gains. 
 He noted that UCSF had an operating profit of $15.4 million for
 FY '95, up from a predicted $7.1 million.  Regent Clair Burgener
 backed Clark and called on the other regents to "proceed with
 caution."
      HEED THE WARNING:  However, administrators at UC and
 Stanford contend that the merger would help both sides survive
 the "fierce cost-cutting" demands of the private sector and
 expected cuts in Medicare and Medicaid.  Regent Ward Connerly
 warned, "The health care industry's changing.  For us to ignore
 this deal and not to consider it very, very seriously is putting
 UCSF at risk."  
      GAME ON:  Stanford Hospital President Peter Van Etten said
 that his hospital only incurred an operating loss in 1994, but
 that it has "substantially improved" its financial performance
 since.  He said that the "best measure of the hospital's
 financial health is its A-plus bond rating."  Stanford would
 bring $400 million in assets to the deal and $200 million in cash
 and securities, according to Van Etten.  "We think there is
 strong support for this merger, but we'll have to see what the
 regents do next week," he said (Russell/Burdman, 7/13).