Arizona’s New Model for Academic Medicine

UA Health Sciences and Banner Health

Katie Riley

In March, the University of Arizona began a historic multiyear academic affiliation agreement with Banner Health, an Arizona-based nonprofit health care company operating 29 hospitals in seven states. 

This public-private partnership has been hailed as a new model for combining the best of academic innovation with the business know-how and efficiencies of a health-care market leader.

Combining the research capability and innovation of the UA Health Sciences Center with Banner’s extensive reach and clinical expertise presents enormous opportunities to improve health outcomes in our state and nation. 

For UA researchers studying population health, access to the megadata provided by millions of Banner patient encounters opens up new avenues to study the efficacy of medical interventions and treatments.

A 30-Year Partnership

As part of the affiliation agreement, Banner Health acquired two Tucson academic medical centers, clinics, the University Physicians Healthcare (UPH) faculty practice plan and health plans previously operated by the UA Health Network, and assumed the network’s substantial debt load. Significantly, the agreement also established a 30-year Academic Affiliation Agreement with the UA Colleges of Medicine in Tucson and Phoenix.

The newly formed Banner – University Medicine includes three renamed academic medical centers (Banner – University Medical Center Tucson, South, and Phoenix), affiliated ambulatory care sites and the Banner – University Medical Group, comprised of physicians and other providers who are faculty members of the UA Colleges of Medicine. Banner now is the primary clinical partner for the two UA medical schools. Although the hospitals are owned and operated by Banner Health, the UA Colleges of

Medicine in Tucson and Phoenix remain an important part of the University of Arizona.

Banner Health’s $1.2 billion investment in the partnership with the UA includes:

  • $261 million toward a $300 million Academic Enhancement Fund for academic enhancements, faculty recruitment, and program development at the two colleges of medicine. 
  • $20 million annually to fund the clinical academic enterprise in Phoenix and Tucson.
  • $500 million for new hospital and clinic facilities in Tucson. 
  • Equal, shared governance of the six-member Academic Management Council that oversees the operations and activities of Banner – University Medicine.

“This momentous partnership with Banner leverages the state’s investment in our two colleges of medicine and enhances health for all Arizonans,” UA President Ann Weaver Hart said at the signing of the historic affiliation agreement.

Supporters believe it’s a win for Arizona patients, a win for the UA, and a win for Banner Health, which becomes the largest private employer in Arizona with more than 45,000 employees. But growth wasn’t the primary motive for Banner Health. Having a primary relationship with the two UA medical schools to help mold the future physician workforce was an important attraction, says Banner CEO Peter Fine.

“Banner looked at this transaction from the perspective of community need,” he says. “Banner sees itself as part of the community at large. In this case we looked at the needs of the University and its two medical schools and the distressed situation of the UA Health Network. As a major nonprofit organization in Arizona, we felt a responsibility to do what’s best for our community.”

For the UA, the agreement secures and sustains the operational foundation of its two colleges of medicine for a generation, while expanding the research portfolio of the entire University of Arizona Health Sciences Center.  

“It’s a game changer for us,” says Joe G.N. “Skip” Garcia, M.D., UA senior vice president for health sciences. “Now we can strategically invest in the four areas we have targeted as areas of biomedical research excellence: population health and health outcomes, health disparities, precision health, and neuroscience.”

Already, the UA Health Sciences Center is recruiting nationally for a director for its new Center for Elimination of Border Health Disparities and for its Center for Innovation in Brain Science. “Our ability to attract national thought-leaders to head our new centers would be extremely difficult without the Banner agreement,” Garcia says. “We are looking to bring not just one or two top scientists to Arizona, but entire teams.”

For UA researchers already eyeing Banner’s million-plus covered lives, the possibilities are boundless.

“If we can deploy a new intervention or treatment through Banner, which reaches about 80 percent of Arizona’s residents, that’s huge,” says Elizabeth Calhoun, associate vice president for population health sciences and director of the UA Health Sciences Center’s new Center for Population Health Science and Discovery. “The opportunities to connect the University’s research expertise with Banner’s efficiencies to improve health outcomes are very exciting.”

For patients, the most obvious benefit of the merger will be increased access to nationally noted academic physicians and vastly improved medical facilities. 

Already, the Academic Management Council has agreed to fund more than 120 new faculty-physician positions in Tucson and Phoenix, from primary care physicians to highly specialized transplant surgeons, among others. Many physicians already have been recruited and are seeing patients.

“We intend to return this organization to its former best self and then some,” says Kathy Bollinger, executive vice president of the new Banner – University Medicine Division within Banner Health, acknowledging the physician attrition and financial constraints the former UA Health Network experienced. 

11-Story Replacement Hospital 

Perhaps the most visible fruit of the UA-Banner partnership will be an 11-story replacement hospital that Banner plans to build immediately north of the former University of Arizona Medical Center in Tucson. 

This $400 million, state-of-the-art tower will replace the 40-year-old sections of the original hospital. All patient rooms will be private, and the new surgical suites will be roughly twice their current size. Architects Shepley Bullfinch of Phoenix and GLHN Architects and Engineers Inc. of Tucson and Tucson-based Sundt Construction and partner DPR Construction were selected for the massive construction project, which is scheduled to break ground in early 2016. The new hospital should be open at the end of 2019. 

Before that happens, however, Banner Health plans to construct and open a 200,000-square-foot outpatient health center at Campbell Avenue and Allen Road in Tucson, adjacent to the UA Cancer Center. This health center will serve the thousands of outpatients who currently see their physicians in clinics within Banner – University Medical Center Tucson. Hospital administrators believe better parking, a more central location, and a facility designed specifically for outpatients will better serve patients, physicians, and staff. 

The University of Arizona and Banner Health also are collaborating on the master campus plan for the vacant land remaining on the Phoenix Biomedical Campus. During the next several months they will take a closer look at the academic and research needs of the UA College of Medicine – Phoenix along with the health needs of central Phoenix residents. Of interest to Banner is the construction of an academic Banner Health Center to serve as both a state-of-the-art outpatient setting for medical students and residents to learn and an efficient place for downtown residents and employees to receive care.  

“What we are doing is melding the best of Banner and the UA,” says Fine.  “We are taking the best of both so that one and one becomes three.”

Garcia adds, “We have entered a new era, with a strong clinical delivery system partner that values and respects our academic mission. This is indeed an exciting time for the UA Health Sciences.”