If events unfold as planned, Banner Health will take over the University of Arizona Health Network by the end of the year. The change has a definite upside for Tucson and Southern Arizona, but it could shift focus northward to the population-dense Phoenix area.
The deal would partner Banner with the UA College of Medicine for 30 years and put the private, independent UA Health Network into the Banner system. The UA Health Network includes the University of Arizona Medical Center hospitals on Campbell Avenue and the campus on Ajo Way.
The arrangement has been approved by the Arizona Board of Regents, which oversees the state’s public university system, and UA Health Network board.
Banner will spend $500 million within five years to improve facilities at the aging hospitals and clinical facilities in Tucson, and spend about $146 million to pay down debt from the UA Health Network and subsidiaries.
The upgrades are urgently needed, according to UA Health Network Chief Executive Officer Michael Waldrum. He said that, for example, the operating rooms at UAMC are the same configuration as they were when they were built in 1971. Such outdated facilities keep the UA from attracting top medical faculty and physician scientists. “The industry is undergoing rapid change,” he said.
Waldrum said the Banner acquisition is the only way for the network to remain economically viable. The deal will “create a premier medical institution” that doesn’t describe what the UA has today, he said.
Banner is a massive nonprofit health-care corporation that operates in multiple states. The deal will transition Banner Good Samaritan Medical Center in Phoenix into a teaching hospital to work with UA med students.
This alliance is an excellent opportunity for UA med students who attend the school’s Phoenix campus, and for Tucson students to gain experience in a large metropolitan hospital.
The arrangement promises that the 6,300 UA Health Network employees can keep their current jobs and pay for six months after the deal is signed.
After that, it’s likely that some positions will be cut as they join a massive network of 16 Arizona medical centers and 12 in other states. Because of Banner’s size, however, there will be more opportunities to transfer throughout the system, said the company’s president and chief executive officer, Peter S. Fine.
The deal will make Banner the state’s largest private employer, larger than Walmart.
The deal does have some potential negatives for Tucson. Hospital officials point to Tucson’s size — about 1 million people — as one reason the hospitals and health network have been financially struggling.
We simply don’t have the population base to support the high-level academic medical center that many Tucsonans thought UA Medical Center to be, said Waldrum.
Joining with Banner creates a statewide system that can allow transfers between hospitals. For example, a cardiac transplant unit could be based at one hospital but take patients from others.
The question, then, is if such highly advanced and specialty care will eventually gravitate toward Phoenix. Ensuring that Tucson keeps its top-level trauma center will be crucial, as will preventing Tucson from becoming secondary to Phoenix’s UA med school.
Efficiencies and cost savings will likely come from this UA Health Network and UA deal with Banner, and that should translate into better care for Tucson patients. But we must be vigilant to ensure that our community remains a central and viable part of the new system.