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A look at the financials behind the Banner UMC merger

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Brandi Walker | The Daily Wildcat

A view of Banner University Medical Center on Dec. 20, 2015 in Tucson. Banner is hosting several events that are free for the public during the month of July including a diabetes and wellness fair and a presentation about cancer clinical trials. 

As part of the Banner – Health University Medical Center and University of Arizona Health Network merger, Banner made a commitment to pump a minimum of $500 million into funding for clinical services in the Tucson area.

The center of that deal is a $400-million hospital tower, currently under construction on the university campus. Slated to open in the first quarter of 2019, the tower will offer patients private bedrooms as opposed to the double bedrooms currently found in Banner's Tucson center.

"We'll be essentially closing down the old part of the hospital, the original, 40-year old hospital where we have double beds," said Katie Riley, director of media communications for Banner – Health University Medical Center Tucson. "At the end of the day, we'll actually be about the same size hospital. We'll have the same number of beds ... so it's not like it's going to be an enormous addition. We're really calling it a replacement tower."

The other $100 million of the $500-million deal will be put into a three-story outpatient health center that is soon to begin construction at the Tucson center.

"It will open in 2018 and house a number of adult specialty medical clinics," Riley said.

Since acquiring a financially troubled UA Health Network in early 2015, Banner has seen a drop in its operating surplus, according to Modern Healthcare. Banner's operating surplus posted in 2015 was less than half of that posted in 2014.

Despite this financial hit, Banner is seeing its promised investments through. It is also in the process of building a new outpatient tower at Banner – Health University Medical Center Phoenix.

In total, Banner plans to invest $1 billion in construction for its acquired medical centers in Tucson and Phoenix. The company also plans to save money by cutting $100 million in overhead costs from its academic centers through operational efficiencies.


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