- Banner Health reported net income of $667 million through the first nine months of the year, a rebound from the same period last year when it reported a loss of $57 million due to shutdowns clipping patient volumes.
- However, like many other hospital operators, expenses, particularly those related to labor, continue to pose challenges. For Banner, expenses grew by 21.2% through the first nine months, slightly faster than revenue growth of about 20.9%.
- Still, Banner was able to post operating income of $164 million, a roughly 6% improvement from the same period last year.
The delta variant continues to pressure hospital operations, including Arizona-based Banner Health.
The highly contagious variant seized a foothold in the U.S. over the summer, resulting in another wave of hospitalizations during the third quarter. For Banner and others, the surge exacerbated existing staffing shortages, forcing health systems to pay a premium price for labor to meet patient demand.
Banner reports the "strained labor market has driven contract labor rates to exorbitant levels," which resulted in "extreme cost pressure" late in the third quarter, financial reports indicate.
However, an infusion of federal relief funds helped alleviate some of these financial challenges. Banner reported receiving $103 million in provider relief funds through the first nine months of the year.
Banner said it expects any additional COVID-19 surges to challenge its operations, including labor demand and costs.
In a bid to avert another winter surge, federal regulators have given the go-ahead on vaccine boosters for all Americans. So far, 37.5 million Americans have received booster doses, about 19% of the population, according to the Centers for Disease Control and Prevention. For context, about 196.2 million Americans, or 59% of the population, are fully vaccinated against the coronavirus.
As Banner Health reported elective volume recovery in its care delivery division, the system, which also operates an insurance division, noted operating income for the insurance unit fell about 20% to $16.3 million from the prior-year period.
The health system reported losses in its Medicare Advantage contracts, though it saw gains in its commercial and Medicaid plans, which experienced increased membership and improved rates.
The nation as a whole has experienced an uptick in Medicaid enrollment as the federal government has barred states from kicking members off Medicaid during the public health emergency.