Thursday | May 25, 2017
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Nonprofit Banner sets its sights on Hawaii

HILO — Banner Health, a Phoenix-based nonprofit operating 23 owned and leased hospitals in seven states, has set its sights on Hawaii.

The company, with assets of $6.3 billion, liabilities of $3.6 billion and $4.7 billion in revenues, is in discussions with the state-run Hawaii Health Services Corp. to take over operations of eight Hawaii Island and Maui district hospitals. That includes Kona Community Hospital, Hilo Medical Center, Kohala Hospital, Ka‘u Hospital and Hoola Hamakua on Hawaii Island and Maui Memorial Medical Center, Lanai Community Hospital and Kula Hospital in the Maui HHSC region.

The company is on solid financial footing, with an AA- rating from bond rating agencies Standard & Poor’s and Fitch Ratings. It’s also been honored as one of the top 15 health care systems by Thomson Reuters, according to corporate information.

Banner Health’s mission statement is “Make a difference in people’s lives through excellent patient care,” and it functions as a charitable hospital governed by community boards in the communities it serves, a corporate structure similar to HHSC.

“As a nonprofit entity, Banner Health exists to provide health care services to the communities we serve, not to generate profits,” the company states in IRS filings. “To that end, every dollar earned is reinvested … For every $1 received in payment for providing care, we spend, on average, 95 cents to pay our expenses.”

Banner Health reported $286.6 million in net charity care and community benefit expenses, 7.3 percent of its total expenses, in 2011. The national average is 11.3 percent of total expenses, according to a February, 2012, American Hospital Association report.

The company lists four employees earning more than $1 million. President and CEO Peter Fine received more than $2.9 million in salary, bonuses and benefits in 2011, according to Banner Health’s 2011 IRS 990 filing. Executive Vice President Ronald Bunnell reported $1.7 million, Dr. Ricky Latham, a Fairbanks, Alaska, cardiologist, earned $1.1 million in salary and benefits, as did Jim Ferando, president of Banner Health Western Division.

Another 32 officers, directors or employees were reported as earning more than $350,000 in salary and benefits. The company has 31,000 full-time-equivalent employees.

Banner Health provided more than $1.1 million in grants in 2011 to groups such as the American Cancer Society, March of Dimes, Phoenix Economic Council and Weld County School District. It also reported numerous community activities, events and services, from health fairs to speakers bureaus to safety educational events.

Government and nonprofit representatives in several states contacted by West Hawaii Today were generally positive about Banner Health.

The company has hospitals in Arizona, Nevada, Colorado, Alaska, California, Nebraska and Wyoming.

“They do a lot of community outreach. They’re very ingrained in the community,” said Linda Hirsch, a caseworker at the nonprofit House of Neighborly Service in Loveland, Colo. “I would not hesitate at all to say they would provide a very positive influence in the community.”

Health fairs, a thrift store and reduced and free health care for the poor are among community programs offered by the Banner Health hospital in Loveland, she said. Hospital personnel are involved in the community as well, said Loveland Mayor Cecil Gutierrez. The hospital administrator, for example, is president of the local chamber of commerce.

“Banner Health has done a very good job of integrating into the community,” Gutierrez said. “I’m a very upfront person. If they weren’t doing a good job, I’d tell you that, too.”