Banner, other AZ hospitals brace for state cuts

Banner Health said state cuts to the Medicaid program for the poor will prompt it to eliminate pay raises next year for more than 28,000 Banner employees in Arizona, the latest evidence that the state Legislature's budget cuts are hurting the state's health-care industry.

Banner Health, Arizona's largest hospital system and second-largest private employer behind Walmart, said scheduled cuts in Medicaid reimbursements for treatment will cost the hospital system more than $100 million next year.

Since 2008, Arizona hospitals have absorbed about $500 million in cuts and payment freezes from the Arizona Health Care Cost Containment System, the state's Medicaid program.