STAT+: Hospitals have been financially propping up medical schools, but now it’s squeezing their bottom lines

Cash-strapped medical schools have long relied on money from hospitals, but the transfers are getting more attention as hospital executives look to shore up their own finances.

Before Banner Health agreed to shore up a pair of financially struggling medical schools, leaders framed such partnerships as a “must” for Arizona.

It’s come with a hefty price tag. Financial statements show the Phoenix-based health system has dedicated roughly $2 billion to the schools and a faculty medical group it bought as part of the deal, which closed in 2015. Meanwhile, Banner’s operating margin has slipped from 5% before the deal to 1%.

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