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Banner to Buy UA Medical Center, Invest $500M in Capital Improvements

By Eric Jay Toll for Arizona Builder’s Exchange

The University of Arizona Medical Center University Campus is the flagship hospital of the $1B-plus University of Arizona Health Network, which may be acquired by Banner Health in a pact that will combine the Tucson network with Arizona’s largest healthcare network. Photo credit: University of Arizona Health Net.

The University of Arizona Medical Center University Campus is the flagship hospital of the $1B-plus University of Arizona Health Network, which may be acquired by Banner Health in a pact that will combine the Tucson network with Arizona’s largest healthcare network. Photo credit: University of Arizona Health Net.

With a commitment to spend $500M on capital projects over within the next five years, Banner Health is expanding its footprint with the acquisition of the University of Arizona Medical Center’s two hospitals and affiliated clinics, services and health networks.

The capital projects include the expansion and renovation of the University Medical Center and construction of a new multi-specialty outpatient clinic and ambulatory surgery center.

Under the deal, Banner will pay Arizona Board of Regents $21M for land at University Medical Center with all of the proceeds dedicated to capital spending at the Colleges of Medicine in Phoenix and Tucson. The nonprofit has the option to acquire the remaining land and buildings at a later date.

Banner is also committing $300 million to be used for an academic enhancement fund. The academic enhancement fund will receive $20M a year after its initial funding

The move brings Banner’s health care hub-and-spoke network into Tucson in a big way. It includes the nonprofit hospital network’s second major cancer center at University Medical Center in Tucson. Banner also runs the Banner M.D. Anderson Cancer Center, which is part of the University of Texas network.

The move does not affect the currently under construction University of Arizona-Dignity Health St. Joseph Medical Center in downtown Phoenix.

The deal also requires Banner to co-brand its Good Samaritan Medical Center with the UA and co-brand all of the university facilities acquired with both Banner and UA. The system must remain nonprofit for ten years following acquisition, and all the school’s employees will be absorbed at current salaries and seniority into the Banner system for at least six months. Banner is also required to maintain participation in Medicare and Medicaid programs.

Note: The executive meeting was still in progress at AZBEX production time; Officials say the Arizona Board of Regents is expected to approve the recommendation, although it may be continued to another meeting.