Banner Health income plummets 44% in first 9 months of 2018
- Phoenix-based Banner Health reported an increase in revenue during the first nine months of the year compared with the prior nine months. Revenue hit about $6.3 billion for the nonprofit health system, up from $5.8 billion a year earlier.
- Operating income fell 37% to $122 million compared to the previous nine months of 2017. Net income attributable to Banner plummeted 44% to $278 million.
- Expenses increased by 9%, according to unaudited financial statements from the 28-hospital system.
Despite a stable outlook for 2019, the nonprofit hospital sector will continue to face headwinds in 2019, according to Fitch Ratings. "Pricing and profit margins will be under pressure," Fitch analysts said in a recent report.
"Most disruptive threats to healthcare business models boil down to an attack on pricing power, including outside industry competitive upstarts, government price setting and consumer and employer efforts to force lower pricing," Megan Neuburger, managing director, said in the report.
Other major health systems have recently reported mixed results.
Ascension, one of the nation's largest nonprofit chains, reported a greater shift toward outpatient but also a dip in inpatient admissions during its first quarter of 2019, ended Sept. 30.
For-profit Tenet, reported weak volume during the third quarter and executives said the hospitals did not meet expectations.
Franklin, Tennessee-based CHS experienced similar woes with declining volumes.
All this comes as major mergers have threatened to further disrupt the traditional healthcare sector. CVS and Aetna have completed their merger and have said they intend to shake up the industry by making it easier for patients to seek low-cost care.