The merger last week of the University of Arizona Health Network and Banner Health highlights the stark challenges academic medical centers face in the new economics of healthcare.
Under public and private reform initiatives, where the goal is to reduce costs, these sprawling downtown hospitals are fast becoming bloated relics of another era.
The Banner deal sparked speculation that other midsize academic medical centers could follow UAHN's path. Indeed, last month, Emory University disclosed it has entered discussions with WellStar Health System to combine their hospitals in the Atlanta area.
“They are being forced to accept a new reality,” said Norman Tabler, a healthcare attorney at law firm Faegre Baker Daniels, Indianapolis. “It's extremely difficult and extremely painful for them.”