BURLINGTON, Mass., Sept. 8, 2014 /PRNewswire/ -- Decision Resources Group finds that two planned mergers between health system in Phoenix and Tucson could lead to greater competition and healthcare delivery networks that cover a broader geographic area within Arizona. Banner Health plans to merge with University of Arizona Health Network, and a joint venture led by Tenet Healthcare plans to take ownership of Carondelet Health Network, which owns three hospitals in southern Arizona. While the biggest changes will occur in the competitive Tucson market, the deals will have major repercussions for Phoenix and the state as a whole.
- The Banner-UAHN merger involves public university assets, multiple health plans, and transformation of Banner's flagship Phoenix hospital into an academic medical center. Crafting a final agreement will be complex, and integration of the two systems could take years.
- Under the joint venture model proposed for Carondelet Health Network, Tenet Healthcare will serve as majority partner with Dignity Health and Ascension Health holding minority stakes. The venture would likely tie Carondelet into the Arizona Care Network, a Phoenix-based accountable care organization (ACO) owned jointly by Tenet and Dignity.
- Uncompensated care costs have plagued both UAHN and Carondelet, leading both systems to consolidate facilities and put off expansion projects. New ownership will likely boost clinic and medical office expansions, improve technology, and speed up moves into accountable care.
Comments from Decision Resources Group Senior Analyst Bill Melville:
- "The Banner-UAHN deal is not simply a case of one health system absorbing another. The deal would establish Phoenix's Banner Good Samaritan Medical Center as an academic hospital, and the combined health system would have statewide reach and transform Arizona's two largest markets."
- "For years, the Tucson ACO market has been the domain of one primary ACO, Arizona Connected Care. The introduction of Banner and Tenet would alter that dynamic considerably. Physicians not yet affiliated with an ACO could potentially join one by partnering with Banner Health Network and the Arizona Care Network."
- Bill Melville has written a blog on the subject, which can be found here.
- Decision Resources Group's Tucson ACO Spotlight Series report has also been updated to reflect ACO developments described above.
About Decision Resources Group
Decision Resources Group offers best-in-class, high-value information and insights on critical issues within the healthcare industry. Clients rely on this analysis and data to make informed decisions. Find out more at www.DecisionResourcesGroup.com.
All company, brand, or product names contained in this document may be trademarks or
registered trademarks of their respective holders.
For more information, contact:
Decision Resources Group
SOURCE Decision Resources Group