Failing Academic Healthcare Systems: Are Mergers the Answer?

Challenges at many academic medical centers aren't news.  At a time of declining reimbursement and patient migration to lower cost community alternatives, many academic systems are trying to figure out how to position themselves. In light of these challenges, I read with great interest news of a recent deal between Banner Health (a large and well-run not for profit network in the southwest) and the University of Arizona Health Network (the health delivery arm of Arizona's largest public university).  The proposal, announced a few weeks ago, is ostensibly a merger:  Banner will inject capital into the UAHN system and presumably apply its know-how and discipline to the UAHN operations. The press release notes:

Now, this is an interesting development.  Private operators of academic hospitals are nothing new: since 2002, Tenet has owned Drexel's teaching hospital in Philadelphia and it also owns Detroit Medical Center among others.  

What's interesting here are the players: a public university and a not-for-profit, experienced healthcare operator coming together.

One perspective is that this merger is simply a "get-bigger" type deal where Banner and UAHN come together to dominate the Arizona market and command a payment premium, while also improving the community hospital/ tertiary center referral system in preparation for accountable care. But, I can also see another interesting possibility:  

is this deal an early example of a public university getting out of the hospital and clinical delivery business to focus on research and teaching?

 The advantages to having experienced Banner executives run clinical operations are obvious.

Becker's Hospital Review

 notes that many academic players are scrambling to shed costs.

Many academic organizations lack the operational discipline to make hard decisions and this might be where bringing on a non-academic partner to make the hard calls might be appealing

. The University of Michigan Health System CEO Dr. Pescovitz notes:

An interesting footnote to the Arizona deal is that it was preceded by a

calamitous electronic medical record implementation with large cost overruns on top of a decline in Medicaid reimbursement

. In other words, a high cost, low reimbursement squeeze.   EHR Intelligence blog writes:

It's going to be interesting to see how other struggling (but essential) tertiary centers weather this perfect storm, and if Banner can overcome the academic inertia at the University of Arizona health system.  Is this deal a harbinger of other academic/ not for profit mergers?