The article on price increases after hospital mergers ("Going Up," May 3, p. 2)-and the study it describes-may be misleading.
Glenn Melnick, a finance professor at the University of Southern California, Los Angeles, who led the research for this Rand Corp. study, was espousing the same theory in 1991-1993, when he was the Federal Trade Commission's expert witness against Ukiah (Calif.) Adventist Hospital's purchase of the assets of Ukiah General Hospital. The theory seemed to be rejected by that agency when it dismissed the case against our facility.
The article indicates that price increases occurred in all cases in which mergers took place. Is that a surprise? The suppliers for Ukiah Adventist Hospital did not modify their practice of increasing supply costs, nor were employees' expectations for wage adjustments reduced just because we merged operations. However, operational efficiencies from the consolidation did allow us to have the lowest charge per patient discharge when compared with similar facilities in our region. What should be looked at is how increases compare with those of other hospitals in the geographic region or in comparable nonmerged markets.
Does this study really validate what is going on in the marketplace, or is it just an attempt to validate long-held ideas and theories?
President, chief executive officer
Ukiah Valley Medical Center