Dive Brief:
- Phoenix-based Banner Health reported an operating surplus of $228.8 million for the nine months ended Sept. 30, up from the $196.1-million operating surplus it posted for the same period in 2013, as the organization said in a memo that its $1-billion acquisition of the University of Arizona Health Network, Tucson, is expected to close on Jan. 31.
- Under initial terms of the acquisition deal, expected to be finalized in early 2015, according to a memo written by Banner President and CEO Peter Fine, Banner will acquire the University of Arizona Medical Center and its south campus, UAHN's faculty practice, University Physicians Healthcare and UAHN's three health plans.
- The deal will make the University of Arizona and its medical school Banner's exclusive academic partner.
Dive Insight:
As the stride toward population-health management—and the financial pressures that go along with it—continues, Banner's acquisition is a sign of the times. As the industry shifts toward providing value-based care, academic medical centers are feeling the pinch much more than other organizations, so selling out sometimes makes sense.
Other academic centers are taking a different approach to cope with industry changes. Vanderbilt University Medical Center recently announced its decision to restructure its relationship with the school in an effort to give the Medical Center more flexibility to respond to healthcare industry changes. At the same time, a recent study published by the Institute of Medicine suggested that academic medical centers need to build better partnerships inside and outside of academia if they want to continue to be innovative.
