Phoenix-headquartered Banner Health has reached an agreement with the University of Arizona Health Network (UAHN) and the University of Arizona (UA) to create a statewide health care organization and a comprehensive model for academic medicine.
The agreement would have Banner Health acquire two hospitals in Tucson — the UA Medical Center-University Campus at 1501 N. Campbell Ave., and UA Medical Center-South at 2800 E. Ajo Way, and also make a commitment of $500 million toward capital projects at those hospitals.
Banner Health is the largest health system in the state and operates 16 hospitals in Arizona, with its closest to Tucson being Banner Casa Grande Medical Center, which Banner Health took over in June.
As part of the 30-year agreement and in support of the UA College of Medicine in Phoenix, Banner Health also would turn Banner Good Samaritan Medical Center in Phoenix into a faculty-based medical center. In addition it would provide “substantial” financial support for the UA College of Medicine.
Banner Health said it anticipates generating approximately $1 billion in new capital, academic investments, and other consideration to the University and the Tucson area.
The agreement came after votes by the UAHN and Banner boards of directors in support of proceeding with negotiations, and a vote by the Arizona Board of Regents (ABOR) to authorize UA to also move forward with UAHN and Banner. A Banner statement noted the parties will work together toward final definitive agreements, which are anticipated to be completed and signed in September. The definitive agreements also must be approved by ABOR and the boards of directors of UAHN and Banner.
ABOR chair Rick Myers said, “We are impressed by the thoughtfulness and thoroughness that has driven the UAHN board process in determining how best to meet the future needs of those they serve. In addition, this agreement strengthens and can accelerate the discovery efforts of our Colleges of Medicine in Tucson and Phoenix, leading to medical advances.”
Steve Lynn, chairman of the UAHN board, noted, “When these respected organizations unite, the potential for delivering top-tier academic medicine throughout the state, recognized nationally, becomes a reality,”
Michael Waldrum, MD, UAHN president and chief executive officer, said, “I’m especially pleased that this proposed transition will infuse stability and energy into our organization. This will benefit our patients, faculty, staff and students as we pursue excellence.”
The addition of 6,300 employees working at UAHN’s two hospitals, health plan and medical group into Banner Health will create Arizona’s largest private employer with more than 37,000 employees.
As to the effect Banner Health’s purchase of UAHN’s hospitals and facilities might have on other local hospitals, Kimberly Chimene, director of system marketing for Northwest Medical Center and Oro Valley Hospital, said because she was unaware of Banner’s specific plans, she couldn’t speculate on what effect the merger might have on patient care.
“Northwest Medical Center and Oro Valley Hospital are focused on providing quality, safe care to our patients,” Chimene said. “We will continue to consistently evaluate what we do and look for ways to improve the care and service we provide to patients, and make our hospitals a place employees are proud to be a part of and where physicians want to practice.”
Northwest Medical Center is a 300-bed facility with comprehensive inpatient and outpatient services, including emergency care, heart and stroke care, weight-loss surgery, and spine and joint programs, among the 35-plus specialties it offers. Oro Valley Hospital is a 144-bed facility with inpatient and outpatient care, diagnostic imaging and emergency, medical and surgical care.
“Both of our hospitals continue to garner national accreditations for services we offer and the care we provide,” Chimene pointed out. “Whatever happens with heath care in Tucson, that will continue to be our focus; doing the right things for our patients and our employees.”
Chimene noted that Northwest Healthcare is opening a new urgent care center next week and has several new physician clinics planned to open this year in various areas of Tucson and in surroundings areas.
Julia Strange, vice president of community benefit for Tucson Medical Center (TMC), said of the Banner Health-UAHN alliance, “It is impossible to know the implications with the information that is available. Tucson Medical Center has experienced seven years of positive financial performance and we continue to invest in our business and in the community. TMC is a nonprofit hospital governed by a local board of community volunteers.”
TMC is licensed at 607 beds and has been a locally governed nonprofit regional hospital for 70 years. It provides emergency care, pediatric care and intensive care units for adults, children and newborns. Other specialty areas include women’s, maternity, cardiovascular, orthopaedic, neuroscience, hospice, imaging and senior services.
Banner Health said it anticipates expanding UAHN’s capabilities for complex academic/clinical programs such as transplantations, neurosciences, genomics-driven precision health, geriatrics, and pediatrics, while eliminating UAHN’s debt burden, currently projected to be $146 million.
The agreement also provides resources for improved hospital infrastructure, including a $21 million purchase of land currently leased to UAMC and $500 million within five years to expand and renovate the medical center, and build new facilities, such as a major, multi-specialty outpatient center to be constructed in Tucson.
Also, the agreement would create a $300 million endowment to provide a $20 million a year revenue stream to advance the UA’s clinical and translational research mission.
Banner Health envisions improved operational efficiencies in several areas, notably through training more physician specialists and allied health professionals, including pharmacists and advanced practice nurses for Arizona; providing a comprehensive platform for the development of physician-scientists working in basic science studies, patient-oriented clinical research, health services research and population health; elevating academic medical excellence across Arizona to national leadership levels; and securing an operational foundation for the Colleges of Medicine in Tucson and Phoenix that will maximize annual state funding received through legislative appropriations.
“With health care here in Arizona and across the nation facing new challenges and opportunities every day, this agreement will allow the Arizona Health Sciences Center and the entire UA to advance our mission to provide education, conduct research and enhance patient care that will transform health care at the state and national level,” said Ann Weaver Hart, UA president. “Combining the world-class care at UAHN and Banner will better meet the needs of patients in Arizona and throughout the region, while also providing tremendous learning experiences for students at the University of Arizona.”
The University of Arizona Colleges of Medicine and Banner Health have a long history of successful affiliation through the Graduate Medical Education program at Banner Good Samaritan Medical Center in Phoenix. Each year, Banner and the UA Colleges of Medicine collaborate in the training of nearly 260 physicians in five residency programs and in numerous fellowships.
Peter S. Fine, Banner’s president and chief executive officer, said, “Banner’s vision is to sustain a position of national leadership. This opportunity to join with a premier academic organization significantly advances Banner toward this vision. In addition, we’re especially mindful of UAHN’s legacy of excellence in Tucson and throughout the state, which must be maintained, nourished and strengthened.”’
Besides the two hospitals, UAMC includes Diamond Children’s, the UA Cancer Center-North Campus and Orange Grove Campus, dozens of clinics, the University of Arizona Health Plans and the University of Arizona Physicians, the practice plan for faculty physicians of the UA College of Medicine. UAMC-University Campus also is Southern Arizona’s only Level 1 Trauma Center.
As a public research university, UA conducts more than $625 million of research annually. A member of the Arizona Space Grant Consortium and home to two allopathic medical schools in Tucson and Phoenix, the UA Tech Park, and The University of Arizona Health Network, the UA creates an $8.3 billion economic impact for Arizona.
Banner Health, one of the largest, nonprofit health care systems in the country, manages 25 acute-care hospitals, the Banner Health Network and Banner Medical Group, long-term care centers, outpatient surgery centers and an array of other services including family clinics, home care and hospice services.