Phoenix-based Banner Health saw operating income increase 12.3% year over year in the first half of 2024.
The system reported an operating income of $182.7 million (2.4% margin) for the first six months of 2024 ended June 30, compared to a $162.7 million operating gain (2.3% margin) during the same period in 2023. Banner Health Executive Vice President and CFO Staci Dickerson told Becker's that the system remains focused on growth and sustainable operations "to provide better care in a more efficient way."
"Banner has prioritized key service line growth, resulting in stronger volumes," she said. "This is coupled with efforts to improve access and decrease length of stay, creating capacity and driving increased revenues."
Ms. Dickerson said Banner has been successfully growing premium revenue as a percentage of total revenue over the past several years. 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."
Ms. Dickerson said workforce stabilization continues to be one of Banner's top priorities, with recruitment engagement and retention of core staff being a primary focus.
"We know that building our employed workforce and making this a great place to work improves customer experience, which in turn supports our financial performance," she said.
She said reducing reliance on external contract workers has been critical to addressing labor costs that have challenged health 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 also administers a K-12 health careers program and roughly 80% of all Arizona nursing students complete their clinical rotations at a Banner hospital. Banner partners with these colleges to place nurses in core positions within the system upon graduation.
"We are equally invested in physician education and training through our partnership with University of Arizona colleges of medicine in Phoenix and Tucson," she said. "Our joint academic medicine division, Banner – University Medicine, trains more than 1,100 physicians annually with more residency slots being added each year."
Rising supply costs has been another challenge plaguing health systems. She said Banner has taken a proactive approach in controlling these costs through "standardization and industry-leading supply operations that have helped curb the impact of inflation."
"This includes the establishment of our own regional GPO called Supply Chain Value Network in 2018 to further expand contract coverage and reduce cost," she said. "This service is used by Banner and its affiliates. The supply chain department at Banner has received numerous awards for its innovative approach to supply chain management. Banner’s supply chain department has been in the Gartner Healthcare Supply Chain Top 25 rankings for 10 consecutive years."