Leaders at Banner Health, Phoenix, and the University of Arizona Health Network, Tucson, signed a nearly $1 billion agreement Thursday in which Banner will acquire UAHN and its subsidiaries.

The merger last week of the University of Arizona Health Network and Banner Health highlights the stark challenges academic medical centers face in the new economics of healthcare.

Phoenix-based Banner Health reported an operating surplus of $228.8 million for the nine months ended Sept. 30, up from the $196.1-million operating surplus it posted for the same period in 2013 ...