Ever wonder what entices an executive to jump ship and join a new health system? For Amy Perry, Banner Health’s insurance arm caught her eye.
Perry joined the Arizona-based nonprofit health system as president and COO in November 2021 and took the reins as president and CEO in July 2024. Before joining Banner, she was SVP of integrated care delivery and CEO of New Jersey-based Atlantic Health’s hospital division for four years.
Banner is Arizona’s largest health system and consists of 33 hospitals that handle roughly 6.4 million clinic visits per year and have more than 55,000 employees. The system brought in $15.6 billion in revenue in 2024.
Perry told Healthcare Brew the fact that Banner has its own health plan with about 1.2 million members was a big part of the reason she took the job, as she sees provider-sponsored health plans, or PSHPs, as a “really important approach to healthcare.”
What’s that?
PSHPs are health insurance companies that are owned, either partially or fully, by a health system, hospital, or other provider group. The largest example is the Kaiser Foundation Health Plan, which has more than 12.6 million members and is run by Kaiser Permanente, a California-based health system.
As of 2022, 197 health systems in the US (or 31%) have PSHPs, according to healthcare analytics firm Trilliant Health.
PSHPs help health systems move away from a fee-for-service model to a more value-based system, Perry said.
Healthcare’s reliance on sick people to generate revenue is a primary reason costs keep rising, according to Perry.
“When we are able, as health systems, to get premium revenue, we can actually save money when people stay well. It’s almost a completely shifted paradigm,” she said.
About 74% of Banner’s revenue came from the fee-for-service side of the health system and about one-quarter (or about $4 billion) came from premiums in 2024, Perry said.
“I’m just a fervent believer that we’ve got to find a way to migrate, as health systems, toward more of this at-risk, premium-based care,” she said.
It’s not so simple…
However, it’s not easy to be both insurer and provider, according to Katherine Hempstead, a senior policy officer at healthcare research organization Robert Wood Johnson Foundation.
That’s because providers are typically incentivized to do more higher-cost procedures while payers try to keep costs down.
“When you’re trying to do both jobs, it can create a conflict,” Hempstead said.
Some large hospitals, including Northwell Health, the largest health system in New York, have tried and failed to create PSHPs. Northwell blamed high risk adjustment payments for why it shuttered its PSHP, CareConnect Insurance Company, in 2017, Fierce Healthcare reported.
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Perry acknowledged how hard it is to run both a health system and an insurer, saying “it’s very difficult to live in both worlds.”
However, despite the challenges, there are also upsides, she added, such as premium revenue that allows the health system to invest in chronic disease management and other things “you wouldn’t even consider on the fee-for-service side because there’s simply not enough funding.”
Industry challenges
But premium revenue hasn’t shielded Banner from broader industry headwinds like Medicaid funding cuts and tariffs.
President Trump’s One Big Beautiful Bill Act, which was signed into law on July 4, is set to slash Medicaid funding by about $1 trillion over the next 10 years. Perry said Banner is bracing for a reality in which some services may have to be cut.
“We have a significant commitment to Medicaid patients and the service lines, but at the same time, there’s only so much we can do if we are scaled back,” Perry said. “Access will be affected, not only in clinics but in emergency rooms.”
To prepare for the cuts, which will take effect in phases over the coming years, Banner is “battening down the hatches like most health systems and trying to reduce our expenses as much as possible,” she said.
Tariffs on products like aluminum and steel already cost Banner roughly $23 million as of September, according to Banner’s SVP of Finance Adrienne Moore, and the health system expects that figure to be less than $35 million by the end of 2025.
Looking ahead
In addition to navigating Medicaid cuts and tariffs, one of Perry’s top goals as CEO involves a $1 billion investment in technology the health system plans to pay over the course of five years, she said.
As part of that initiative, Banner created its own ChatGPT-like program called BannerWise via a partnership with AI company Anthropic to analyze data from things like physician notes and pathology results, Modern Healthcare reported earlier this month. Perry told Healthcare Brew this will help providers use the health system’s data “in a more strategic and analytical way.”
Beyond investing in technology, Perry said she’s very focused on connecting with the communities the health system serves in the near term.
“If we’re able to do that and we do it successfully over the next five years, I’m going to be one happy CEO,” Perry said.