A Century of Care

From cottages to world-class facilities, Arizona’s health care industry has flourished

In the nearly 100 years since Arizona became a state, the health care sector has become a powerful economic force.

According to a study by Arizona State University’s L. William Seidman Research Institute, Arizona’s hospital community alone employs more than 80,000 people and contributes $11.5 billion to the gross state product. Indirectly, hospitals create about 120,000 additional jobs, more than the combined populations of Coconino, Graham and Santa Cruz counties.

Sisters of Mercy

It all started some 17 years before statehood in January 1895, when the Sisters of Mercy had collected enough money to rent a six-bedroom cottage at Fourth and Polk streets in Downtown Phoenix. Each room was equipped with two beds for TB patients, and thus was born St. Joseph’s Sanitarium, predecessor of St. Joseph’s Hospital and Medical Center and the first hospital in Phoenix.

In the mid-1940s, the nuns purchased 10 acres at Third Avenue and Thomas Road, which was part of an old dairy farm. Today, St. Joseph’s is a 670-bed, not-for-profit hospital that is one of the cornerstones of the state’s health care industry.

A second giant in health care, Good Samaritan Hospital of Phoenix, launched its first facility in an apartment building at Third Street near Van Buren in 1911. Initially incorporated as the Arizona Deaconess Hospital and Home, it opened with 15 beds.

One-hundred years later, Banner Good Samaritan Medical Center in Downtown Phoenix is the flagship of Banner Health, with more than 662 licensed patient care beds. Banner Good Samaritan employs more than 4,200 health care professionals and support staff. Nearly 1,700 physicians representing more than 50 specialties work with Banner Good Samaritan staff to care for more than 43,000 inpatients a year.

Another early entry in the health care scene was the State Asylum for the Insane, which was rebuilt after a fire in 1911. In 1924, the asylum was informally renamed Arizona State Hospital.

Established in 1943 as a community hospital, Tucson Medical Center is among the 300 largest hospitals in the country. It is licensed for 650 adult and skilled nursing beds, and serves more than 30,000 inpatients and 122,000 outpatients a year.

In 1971, University Medical Center — a private, nonprofit hospital located at the Arizona Health Sciences Center adjacent to the University of Arizona in Tucson — was established. UMC is Arizona’s only academic medical center, and earlier this year it became an international focal point for neurosurgery and trauma care after a gunman shot and wounded U.S. Rep. Gabrielle Giffords (D-Ariz.) and killed six people.

In Northern Arizona, the Flagstaff Medical Center, a not-for-profit hospital, was founded in 1936. A part of the Northern Arizona Healthcare family, it has some 270 beds and its medical staff includes about 200 physicians. Among its specialties are cancer, heart and sports medicine.

Health care continues to be a concern on Indian reservations throughout Arizona, particularly in some of the remote regions. A relatively new program, the American Indian Research Center for Health is designed to improve the health status of Native Americans and increase the number of Native American scientists and health professionals engaged in research. Classes for the student-training component of the program are held at the University of Arizona.

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Innovative care

Arizona’s days of being know as a place that provides allergy and lung cures are long gone — cars and construction have produced an abundance of carbon monoxide and dust. Today, however, Arizona is seen as a leader in innovative care.

In 1971, the Arizona Heart Institute (AHI) was founded, quickly becoming one of country’s first freestanding outpatient clinics solely dedicated to the prevention, diagnosis and treatment of heart and blood vessel disease. Last year, AHI went into bankruptcy and was purchased by Abrazo Health Care, whose flagship hospital in the Valley is Phoenix Baptist Hospital.

Mayo Clinic, which opened its Scottsdale facility in 1987, serves more than 90,000 patients each year, focusing on adult specialty and surgical care in more than 65 medical and surgical areas. On a 210-acre site in Northeast Phoenix, Mayo Clinic Hospital, completed in 1998, is the first hospital planned, designed and built by Mayo Clinic.

In Downtown Phoenix, the Translational Genomics Research Institute (TGen), a nonprofit genomics research facility, was established in 2002. Public and private sources raised $90 million to build the institute, which houses the International Genomics Consortium (IGC) headquarters and TGen.

TGen’s focus is on assembling its own genomics research platforms, leading to tests and innovative therapies in the battle against cancer and other life-threatening and debilitating diseases.

Cancer research

Even before the emergence of TGen, the state was a nexus for cancer research and care.

Since 1976, the Arizona Cancer Center at the University of Arizona Health Sciences Center in Tucson has been a pioneer in the fight against cancer. The facility, along with the Mayo Clinic Cancer Center in Scottsdale, is designated by the National Cancer Institute (NCI) as one of just two Comprehensive Cancer Centers in Arizona.

Scottsdale Healthcare also offers cancer patients cutting edge clinical trials by being a clinical research site for TGen. Meanwhile, the Virginia G. Piper Cancer Center, housed at Scottsdale Healthcare Shea Medical Center, has a program that is open to all cancer patients, regardless of where they’re receiving treatment.

Two relative newcomers on the cancer treatment scene in the Valley are the Cancer Treatment Centers of America at Western Regional Medical Center in Goodyear and the MD Anderson Banner Cancer Center on the campus of Banner Gateway Medical Center in the East Valley.

Cancer Treatment Centers of America opened in December 2009. Scheduled to open later this year, the MD Anderson Banner Cancer Center will have 76 patient beds on two floors in Banner Gateway.

Population growth

John Rivers, who retired in 2010 after 25 years as CEO of the Arizona Hospital and Healthcare Association (AzHHA), says Arizona’s health care industry has been driven by the state’s population explosion.

“We had to build more hospitals and we had to significantly expand and modernize hospitals already here,” Rivers says.
Since 1990, Arizona hospital employment growth has significantly outpaced the annual employment growth of hospitals nationally. During that time, Arizona hospital employment soared 46 percent, while nationwide, hospital employment increased 24 percent. Between 2007 and 2011, hospital construction in Arizona will have created thousands of jobs each year and infused billions into the state’s economy, according to AzHHA.

Public health care

Arizona’s version of Medicaid, the Arizona Health Care Cost Containment System (AHCCCS), was started in October 1982 as a demonstration project. Until 1988, AHCCCS covered only short-term acute care, generally associated with care provided in an emergency department, ambulatory care clinic, or other short-term stay facility. It also provided limited post-hospital and skilled nursing facility coverage and had some 200,000 enrollees.

By 2010, impacted by the state’s weak economy, AHCCCS’ population, including children and the mentally ill, was 1.356 million. The worse the economy gets, the more enrollees flock to AHCCCS, adding to Arizona’s current massive budget problems.

In a cruel twist, those massive budget problems are in turn leading the state to cut AHCCCS care. In January, Gov. Jan Brewer asked the federal government for a waiver from the maintenance of effort requirement of the Patient Protection and Affordable Care Act. The waiver would result in about 280,000 Arizonans losing their AHCCCS eligibility. In a letter, Brewer said $1 billion of the state’s $1.2 billion FY 2012 deficit is attributable to AHCCCS. The waiver would save the state about $540 million.

Coverage would be eliminated to 250,000 childless adults and would be reduced for approximately 30,000 parents effective Oct. 1.

Arizona Business Magazine Mar/Apr 2011