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New Lease on Life

Board of Supervisors renews hospital contract with Banner, Regents

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The Pima County Board of Supervisors voted to extend and amend the contract with Banner Health and the Arizona Board of Regents to operate the former Kino Community Hospital June 6 in a 4-1 vote.

The extension, which lasts through June 30, 2019, is for $30 million towards operating costs over the next two years.

"We are so honored to partner with Pima County in serving Southern Arizona's health-care needs," said Tom Dickson, the hospital's CEO.

District 1 Supervisor Ally Miller was the dissenting vote. Miller declined to respond to multiple requests for comment on her vote.

Miller's fellow Republican on the board, Supervisor Steve Christy, justified his support for the extension due in part to his relatively short tenure, as he just took office in January.

"I'm just not confident enough only six months in to vote against supporting Banner," he said. "Especially with the psychiatric services they provide and the community they serve."

District 2 Supervisor Ramón Valadez insisted the deal is a boon for the county, not just his district where the hospital is located.

"It's not just for the immediate community," he said. "It's for all of Pima County. This is the only hospital south of Speedway down to the border."

From County to UMC to Banner

Now known as Banner-University Medical Center South Campus, the facility at 2800 E. Ajo Way was opened in 1977 and operated by the county. Opened as a replacement to the old Pima County Hospital, the county turned over operational control in 2004.

A 2016 Pima County memorandum from Pima County Administrator Chuck Huckelberry provides some insight into the county's decision making at the time.

"The last year the county operated Kino Community Hospital in 2004, the operating deficit was approximately $34 million," Huckelberry wrote.

University Physicians Inc. was eventually tapped to operate the hospital. UPI, which would transform into University of Arizona Health Network and eventually Banner Health, has run the facility ever since.

Former U.S. Surgeon General Richard Carmona, who also served as the CEO of the former Kino Community Hospital in the late '90s, said the facility faced multiple problems under county rule, including financial challenges.

"You can't make money if your mission is to care for the poor," Carmona said.

Since turning over control of the hospital in 2004, the county has saved approximately $135 million dollars.

"Had the county continued to support the hospital at a cost to taxpayers of approximately $30 million per year, the total cost for the period would be $360 million," Huckelberry said.

On top of saving the county money, the partnership between the county, the University and Banner qualified the facility for a myriad of federal funds.

Because the hospital serves so many indigent patients, the county is eligible to have every dollar paid into the Arizona Health Cost Containment System qualify to be matched federally at a 2 to 1 ratio.

Those same dollars also qualify to be matched dollar-for-dollar through the hospital's membership in the Centers for Medicare and Medicaid. "Essentially, you're looking at a 3-to-1 match coming back in federal dollars," Valadez said.

On top of the federally matched AHCCS funds, BUMC-South also serves as a Graduate Medical Education site for the University's medical students. Being a GME site enables the hospital to receive another stream of federal funds.

Those funds offset the cost "of the clinical education and expenses incurred by hospitals in the training and oversight of key residency programs," and are matched at a 2 to 1 ratio as well, the 2016 memo said.

All told, Pima County has raked in $425 million in federal funds since entering the partnership, according to the 2016 memo.

Upgrade in Care, Coverage

Saving money hasn't been the only benefit for Pima county. Patients have also seen an upgrade in the quality and variety of care provided.

Under Pima County, the hospital struggled to provide quality care and deal with the ever-changing bureaucracy of commercial insurance. Before the UA took over in 2004, the hospital was only able to staff one medical specialty: psychiatry.

Valadez, who has represented District 2 since 2003, remembers those times. "The top two floors were the only thing open, and it was for only psych patients," he said.

BUMC-South is now home to a new gastroenterology unit and diabetes center.

"This is now a full-service hospital, it's not even close to what it used to be," Valadez said.

Added infrastructure has also helped. BUMC-South updated its emergency room in 2012, and added a helipad the year before.

"Banner-South is a Level 2 trauma center," Valadez explained. "Just recently, it was awarded the Banner 'Best of the Best' distinction for midsize hospitals."

Those honors and needed infrastructure have added up to a better patient experience and better health-care outcomes, said Valadez.

"The level of care is really a testament to the health-care and medical professionals and the work they do for the community," he said.

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