Banner's loss hits $113M, contract labor up 7%

Phoenix-based Banner Health reported a $26 million operating loss for the third quarter ending Sept. 30, bringing the health system's total loss to $113 million.

The health system blamed the loss on disruptions in the nursing labor market, staffing and capacity limitations, a decline in key volume indicators and inflation. Banner reported a 7 percent increase in external contract labor year over year for the nine-month's end. The contracted pay rates steadily declined in the first half of the year and then increased a bit in the third quarter. Contracted pay rates are still more than double the rates Banner paid before the pandemic.

One contracted laborer costs about three times as much as an employed staff member for the system, and overall labor costs are four times more than before the pandemic.

Banner's insurance division reported a 12.6 percent increase in premium revenue for the first three quarters of the year when compared to the same period in 2021. Insurance premiums represent 24 percent of the health system's operating revenue. Banner | Aetna, the system's joint venture with Aetna, reported $7 million operating gain year to date and its full risk membership increased 12.1 percent.

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