Phoenix-based Banner Health posted an operating income of $198.5 million (1.8% operating margin) through the first three quarters of 2024, up from an operating income of $149.4 million (1.4% margin) over the same period last year, according to its Nov. 21 financial report.
The system posted revenues of $11.3 billion for the nine months ended Sept. 30, a 9.5% increase year over year. Net patient service revenues increased 9.7% year over year to $7.7 billion. Medical insurance premium revenues increased 11.1% to $3 billion.
Banner Health CFO Staci Dickerson told Becker's in October that the system has been successfully growing premium service revenue as a percentage of total revenue over the past several years. She said the system's strategic plan establishes goals and initiatives to continue revenue growth.
"I am most excited about this as premium reimbursement allows us to invest in keeping our members healthy rather than being solely focused on caring for patients when they are sick," she said. "Investing in the health of our communities and keeping people well will allow us to make healthcare more affordable and improve the quality of life for those we serve."
Banner's operating expenses are up 9.2% year over year to $11.1 billion. Labor costs rose 4.5% to $4.7 billion. Supply costs rose 12% to $1.9 billion. Banner said the supply cost increase was driven by increased volume, particularly in complex surgeries and chemotherapy/infusion drug treatments.
The system said in its report that contract labor cost decreased by 31.8% through a combination of reduced rate and lower utilization. Ms. Dickerson told Becker's in April that reducing reliance on external contract workers has been critical to addressing labor costs that have challenged systems across the country. That work has included making tuition assistance available to full and part-time employees who have worked at the health system for at least six months.
Banner posted a net income of $887.8 million through the third quarter of 2024, up from a net income of $325.3 million over the same period last year.