Strong demand drives healthcare market growth

Abrazo, Banner engage in robust facility, service expansion

By Matt Roy
INDEPENDENT NEWSMEDIA

Evidenced by predictions of continued growth as new construction projects rise around the state,
Arizona remains one of the nation’s most robust health care markets.

The Arizona Commerce Authority identifies bioscience and health care as high-growth industries, citing
14,261 medical establishments with an estimated $21.4 billion in annual earnings supporting more than
320,000 jobs with an average annual salary of $66,807 in Arizona, according to 2015 data.

“Arizona’s health care employers are growing faster than their national counterparts and faster than
other types of Arizona businesses. In 2015, health care employers in Arizona added more than 11,000
jobs, a rate of 3.4 percent. That’s faster than either health care employers nationwide (3.2 percent) or
Arizona employers as a whole (2.5 percent),” the authority reports at their
website, www.azcommerce.com.

Commercial real estate industry analyst Cushman & Wakefield Inc. recently identified the Phoenix
market among the top 10 for medical office building real estate activity, with an estimated 900,000
square feet leased in 2018.

Projecting continued demographic growth among Sunbelt states, the real estate services firm
estimates healthcare and social assistance spending in the Phoenix area will increase by 23 percent
through 2025 to rank the market among the fastest growing in the country, according to Cushman &
Wakefield’s 2019 Healthcare Trends report released earlier this month.

The predictions and numbers are borne out in bricks and mortar with major medical construction
projects rising across the state as health care providers continue to expand their services and facilities.
Abrazo Community Health Network officials this week announced they will build a new hospital near
the Loop 303 and Bell Road in Surprise, which is expected to open in spring 2020.

The new 32,500-squarefoot facility will focus on emergency care and medical procedures, with a 13bed
emergency department, an operating room and eight inpatient rooms. Abrazo Surprise Hospital will
create an estimated 50 full-time equivalent clinical and support staff jobs.

The provider’s expansion responds to growing demand for services in the community according to
Abrazo CEO Frank Molinaro.

“With more and more patients choosing Abrazo, it’s important to meet our community’s expectations for
high quality care and an excellent patient experience. Our industry continues to emphasize value-
based care. Communication, quality, safety and patient experience are very important parts of the
culture here at Abrazo,” Mr. Molinaro stated.

The ER will be open 24-7 with a staff of board-certified emergency physicians. The hospital will also
offer minor surgeries, diagnostic imaging, laboratory, pharmacy and outpatient services.
Abrazo will open a similar facility this summer, Abrazo Mesa Hospital, bolstering the company’s service
capacity, which already includes five acute care hospitals in the Phoenix area in addition to medical
practices and freestanding emergency and urgent care centers.

“As the Valley continues to grow, we understand that consumers prefer to receive care closer
to home. Community residents will be able to receive 24/7 emergency care, undergo minor procedures
and have outpatient exams performed at the Surprise hospital,” stated Jeff Patterson, CEO of Abrazo
Arrowhead Campus.

Abrazo is growing its existing facilities and services across the Valley, with ongoing expansions at its
campuses in Phoenix, Scottsdale, Goodyear and Glendale, as well as the launch of its Graduate
Medical Education program, based out of Abrazo Arrowhead Campus.

Internal medicine and general surgery residents will train at the Glendale facility and conduct rotations
in Goodyear as well.

Banner Health continues to expand, too, with the announcement this week of the completion of its new,
nine-story patient tower at the Banner – University Medical Center Tucson.

Completing the four-year, $446 million construction project, Banner will welcome patients to the new
facility starting April 22.

The tower features 228 private rooms, 20 new operating rooms, new diagnostic imaging and cardiac
catheterization labs, and a new cafeteria, according to a company press release. The 670,000-square-
foot expansion increases overall campus capacity from 479 to 649 licensed beds.

Operated in partnership with the University of Arizona, the Banner – University Medical Center Tucson
is a teaching hospital, which aims to meet the growing health care services demand, according to
Irving L. Kron, MD, a cardiothoracic surgeon and interim dean of the UA College of Medicine – Tucson.

“Banner’s beautiful new hospital tower is an incredible gift to and investment in medical education in
Arizona,” stated Dr. Kron. “Our medical students and physician residents will learn the art and science
of medicine in this first-class clinical facility designed around patients’ needs. It’s the teaching hospital
of the future.”

The tower was designed by architects Shepley Bulfinch and engineers AEI and GLHN Architects &
Engineers (Tucson). The lead contractor was Sundt I DPR.