Banner Health's Financial Performance in Perspective
Banner Health is a nonprofit health system that exists to "make a difference in people's lives through excellent patient care." As a nonprofit organization, we exist to support our charitable mission of providing excellent health care services to the communities we serve, rather than to generate income for investors or stockholders.
Banner Health leaders embrace stewardship as a guiding philosophy of their respective management roles and understand it is necessary -- especially during economically challenging periods -- to generate “income’’ (shown on our financial statements as “Excess of Revenue over Expenses’’) as an essential ingredient to our continued ability to provide excellent patient care.
In fact, Banner can only obtain the capital needed to maintain and improve our existing equipment and facilities to meet the growing needs of the communities we serve through three channels:
- By generating income
- By borrowing funds
- Philanthropic donations
Both options require that Banner operate with positive net income. A third option available to most businesses — finding stockholders willing to invest — is not available because, as a nonprofit, Banner has no stockholders or investor owners.
Under normal circumstances, the primary need for new capital in a health care organization like Banner is the improvement and maintenance of existing facilities and equipment. At Banner, we are pushing the envelope beyond maintenance and investing in emerging technology and innovation to give our caregivers the best tools available to provide excellent patient care. Examples of these investments are:
- Our Care Transformation initiative, a multi-year project totaling more than $100 million unites best practices in clinical care with leading edge clinical technology such as electronic medical records, automated alerts and computerized physician order entry systems to provide better, safer and more reliable care to patients.
- Banner Health’s 21 Stage 7 hospitals are among an elite group of hospitals in the nation at this top level of electronic medical record use. Banner is also recognized by Truven Health Analytics as a Top Five Large Health System in the nation and as a Top Leadership Team/Large System by HealthLeaders magazine
- Banner iCare™ remote monitoring solution pairs remote audiovisual and information technologies with intensivists (medical doctors who specialize in intensive care medicine) to continuously monitor patients remotely. Banner is using this for all intensive care unit beds across the seven states it serves. It is also piloting an innovative Banner iCare™ program for medical/surgical patients at Banner Gateway Medical Center.
- Our Intelligent OB system uses technology to ensure women in labor have a safer delivery. PeriBirth is a clinical documentation and labor tracking system that significantly improves the safety of the labor and delivery process by improving documentation and sending alerts when there are contraindications in care.
- Through our surgical robotics initiative, we have surgical robots in our major medical centers. Robotic technology complements the expertise of our surgeons and offers a less-invasive option to traditional surgery for patients, resulting in quicker recovery.
- We offer one of the country's largest Simulation Education centers at Banner Corporate Center-Mesa. Through its existing simulation-education programs, Banner Health has trained thousands of health care professionals.
- Banner Health has embarked on an exciting partnership with one of the country's pre-eminent cancer centers, MD Anderson Cancer Center, for a comprehensive cancer center to fill a critical need for all residents of the Phoenix metropolitan area.
- We are also building for the future. In 2010, we opened Banner Ironwood Medical Center and in 2013 we acquired Banner Goldfield Medical Center. We also expanded our facilities at Banner Baywood Medical Center, Banner Del E. Webb Medical Center, Banner Desert Medical Center, Banner Thunderbird Medical Center, Cardon Children's Medical Center and McKee Medical Center.
- Banner Health is bring health care directly to the communities we serve. In 2013, we will open several Banner Health Centers througout our communities.
Banner's financial performance continues to be strong and we're confident that we'll be able to continue our ability to serve our communities. Our performance has been improving for several reasons, including:
- Banner is the leading provider of health care services in the communities we serve and more people choose Banner for their care
- Our streamlined management structure allows us to quickly spread innovation and share best practices across our system
- We leverage our size to reduce supply and equipment costs and to operate more efficiently.
We're also aggressively pursuing best practices both inside and outside of Banner for opportunities to reduce waste and inefficiency.
In summary, it is useful to keep the following in mind when reviewing Banner's financial results:
- Banner’s net income is used only for reinvestment in itself, in innovative approaches, new facilities and for improvements in existing facilities. Not a single penny of Banner’s “profit” goes to benefit an investor or stockholder…because we don’t have any investors or stockholders.
- Banner's financial performance is strong and comes from attention to cost savings and efficiency as well as revenue growth.
- Banner's financial performance is a major contributor to our ability to provide excellent patient care … allowing us to hire and retain the best people … and provide them with the best medical equipment and technology … so they can make a difference in the lives of the people we serve.