Banner looking forward with new Tucson hospital, clinic

The “hardest year” now in its past, Phoenix-based Banner Health is moving forward by investing $500 million into a new hospital and clinic in Tucson.

The nonprofit company, which is the largest private employer in Arizona, on Monday celebrated its one-year anniversary in the Tucson market.

Banner Health CEO Peter S. Fine talked to employees at a town hall Monday morning, giving them kudos for getting through the transition of having new ownership.

“Change is always disruptive,” Fine said. “Health care is a disruptive industry right now. ... This is just part of a process of an industry in change, and we together are part of a very bold experiment, one that we may not know for a decade how successful we are.”

As Fine spoke to employees, construction crews worked on prepping land for a new 670,000 square-foot nine-story hospital tower to be built west of the existing Banner-University Medical Center Tucson. The hospital is Southern Arizona’s only academic medical center.

Banner became the surviving entity last year when it merged with the $1.2 billion University of Arizona Health Network, acquiring, among other things, two local hospitals — Banner-University Medical Center Tucson, 1501 N. Campbell Ave. and Banner-University Medical Center South, 2800 E. Ajo Way.

The new $400 million hospital is being referred to as a replacement for the existing main Campbell Avenue hospital. Diamond Children’s and a recent expansion project that included a new emergency department will be incorporated into the new facility. The replacement hospital is expected to open in the second quarter of 2019.

Besides being the area’s only academic medical center, Banner-University Medical Center Tucson is Southern Arizona’s only top-level trauma center.

Once the construction project is complete, the new hospital entrance will be on the north side of the campus and will no longer face Campbell Avenue

The new vehicle entrance will be via an enhanced and larger intersection at North Campbell Avenue and East Elm Street.

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Banner is also planning to build a new 200,000 square-foot outpatient clinic alongside the University of Arizona Cancer Center’s North Campus just north of Prince Road at North Campbell Avenue and East Allen Road.

The new clinic will be a multispecialty center where health-care providers will take a team approach to treating patients. That clinic is expected to open in early 2018, Banner officials said Monday.

The expansion anticipates a future when more health care will be done on an outpatient basis and only the sickest patients will be hospitalized. For that reason, outpatient surgery will be part of the clinic.

“The hardest year is behind us,” Kathy Bollinger, senior vice president of Banner-University Medicine, said in an interview. “We spent a lot of time getting to know one another. ... 2016 is a year to be much more strategic.”

Banner’s entry into the Tucson market was somewhat unique because it was a private company acquiring an academic medical center that employs doctors from a public university. The company has about 6,300 employees in Tucson.

The deal included a 30-year academic affiliation agreement that transitioned Banner Good Samaritan Medical Center in Phoenix into a faculty-based academic medical center to support the UA College of Medicine in Phoenix.

The academic agreement also calls for Banner to provide financial support to the UA College of Medicine in Tucson and to the UA College of Medicine in Phoenix.

And the deal was expensive, with Banner taking a financial hit in the first year.

“We’re not doing anything here that you can go and pull off the shelf. We’re inventing something here,” Fine told employees. “We’re inventing the ability to create a sustainable academic enterprise for the long term.”