The Mogollon Health Alliance and Banner Health on Friday completed their merger, with enormous implications for health care in Rim Country, the Payson university project and educational and health care charitable initiatives.
Banner paid the newly created MHA Foundation $40 million. The longtime Mogollon Health Alliance will now change its name to the MHA Foundation. Banner will assume control of Payson Regional Medical Center on Aug. 1, renaming it Banner Payson Medical Center.
Todd Werner, president of Banner’s Arizona East Division, said Banner will offer contracts to almost all of the existing medical staff and most administrators who currently work for Community Health Services, a national hospital chain that has operated the hospital for the past 18 years.
However, Banner, after a careful review, has decided to change the group running the emergency room, said Werner.
Banner will continue meeting with employees to sign on as many as possible.
Banner agreed to invest an added $25 million in improvements in the 44-bed medical center over the next seven years. Werner said Banner will consult with medical staff, the MHA Foundation and others to prioritize the necessary investments.
“We want to become a trusted adviser and health steward for the community. That means you have to listen carefully to what people want — and that’s it in a nutshell. That’s something we take very seriously.”
Becky Kuhn, executive vice president for community delivery at Banner Health, said, “We were anxious to see this transaction finalized so that we can concentrate on the transition of clinical services, physician recruitment and connecting with the hospital employees and volunteers. CHS has been a good steward of this hospital and we are excited to build on that legacy.”
The MHA Foundation will retain ownership of its other properties in Payson, together with its enormously increased endowment to support Rim Country educational and medical charities and initiatives.
“This merger signals a planned and well-executed shift from a fixed property asset to more liquid financial instruments,” said MHA Foundation President Kenny Evans. “The MHA Foundation will continue to build on MHA’s decades of prudent financial management and our demonstrated commitment to our mission and vision for health care and education in Rim Country.”
The merger gives MHA Foundation enough money to move the university project forward by concluding the $4.1 million purchase of 253 acres from the U.S. Forest Service. The MHA Foundation will work through the Rim Country Educational Foundation it established to facilitate the project.
But the merger has implications for Rim Country far beyond facilitating the university project.
The merger could have a big impact on the cost of medical care in Rim Country, since under the management of CHS, Payson Regional Medical Center rated as one of the most expensive hospitals in the state. Werner said Banner would study all its existing contracts and cost structures moving forward.
The medical center has also drawn criticism from some patients and families for problems in the emergency room, especially when it came to transfers to Valley hospitals for lack of a full range of services and advanced diagnosis at the medical center. Stories abound of patients forced to undergo costly, frustrating, transfers to Valley facilities for lack of expertise locally.
Banner has hired the popular new director of the medical center Lance Porter to continue running the hospital. However, Werner said Banner has decided to change contractors when it comes to running the emergency room.
“We think we have an opportunity to ensure we have the highest level of service to people of the community who show up in the ER. We’re just very confident in what they do,” he said.
Banner has also said it will work to expand telemedicine services, which allows doctors and patients in small hospitals and rural areas to establish real-time connections with specialists all over the country.
Initially, Banner will connect the Payson intensive care unit to a telemedicine unit at Desert Banner, to provide real-time consultation with a team of specialists. The system has resulted in big improvements in care in other small hospitals Banner operates.
“We have interventions in a central location that can remotely monitor ICU patients across a few dozen hospital — about 450 ICU beds. We’ve seen really good enhancements — lowering morbidity and mortality rates — in concert with people on the front lines.”
Banner operates all of the University of Arizona medical facilities. The U of A is a leader in telemedicine, with a longtime focus on rural medicine. Typically, rural areas have far fewer primary care doctors per 1,000 residents and often very limited access to specialist care.
The release announcing the completion of the merger said “Banner will look to grow or maintain clinical services currently offered at Payson Regional, including the growth of telehealth services. It is Banner’s intent to keep Payson patients in the community for care whenever possible.”
Robust telemedicine services could make that much easier, by giving doctors access to specialist advice and diagnosis for Payson patients.
Truven Health Analytics (formerly Thompson Reuters) has consistently ranked Banner as one of the top-performing health systems in the country based on patient survival rates and complications. Banner ranked in the top five nationally in three of the past five years.
Banner is one of the largest nonprofit health care chains in the country, with 28 acute-care hospitals. The chain operates in seven western states and ranks as the largest health care provider in Arizona. It also operates an array of clinics, long-term care centers, outpatient surgery centers, and provides family clinics, home care and hospice services.
Evans, head of the MHA Foundation as well as mayor of Payson, said the merger will allow the Foundation to dramatically expand its charitable mission in the community, in addition to supporting the university project.
MHA created the Rim Country Educational Foundation to help the Rim Country Educational Alliance bring a university to Payson. The payment from Banner has provided enough money to buy the land and keep the process moving, with a huge endowment for other projects untouched.
The current plan calls for the Rim Country Educational Alliance to return the money for the land purchase and other upfront costs to the Foundation once it accesses a promised line of credit for the project from National Standard, a coalition of investment-minded insurance companies.
The Educational Foundation will then use that money to help the Aspire Foundation find ways to lower the cost of attending the Payson campus for students.
But beyond boosting the university project, the merger gives the MHA Foundation $40 million to operate on a much more ambitious and sustained scale.
In recent years, MHA played a leading role in establishing a dialysis center in Rim Country, providing up-to-date computer technology for the Payson Unified School District, establishing vocational programs for nurses and firefighters at Gila Community College and bringing high-speed Internet to the region.
Evans said the bolstered MHA Foundation will continue to support both medical and educational initiatives in the region.