Strong health systems, strong small businesses

Arizona’s small business owners know that the health of our economy depends on more than hard work — it depends on the strength of the institutions that support our communities. That’s why Banner Health’s continued investment in Arizona’s small business ecosystem deserves recognition, and why it should serve as a model for how anchor institutions and local entrepreneurs can grow together.

As Arizona’s largest private employer and a locally governed nonprofit health system with hospitals and clinics serving urban and rural communities across the state, Banner Health supports billions of dollars in annual economic activity while reinvesting in the people and communities it serves.

Health systems like Banner are often thought of purely in clinical terms — as places we go when we’re sick or when a loved one needs care. But in communities across Arizona, Banner functions as something more. It is the state’s largest private employer, a major purchaser of local goods and services, and a steady source of demand for everything from construction and facilities management to catering, technology, and professional services. When a health system chooses to build local supplier relationships, mentor small vendors, and invest in workforce pipelines, the ripple effects reach far beyond its hospital walls.

This matters because small businesses are the backbone of Arizona’s economy. They make up the vast majority of employers in this state, and they are disproportionately vulnerable to the ups and downs of local demand. A single new contract with an institution the size of Banner can be the difference between a small business surviving its first five years and closing its doors. Multiply that across dozens of vendors, contractors, and service providers, and you start to see how one institution’s purchasing decisions can shape the trajectory of entire local economies — from Phoenix to rural and border communities that don’t always have easy access to large-scale opportunity.

Supporting small business isn’t charity for a health system like Banner — it’s smart economics. Local vendors tend to be more responsive, more invested in the community’s outcomes, and more likely to reinvest their earnings close to home. Every dollar spent with an Arizona small business tends to circulate further within the state than a dollar spent with an out-of-state vendor. That’s the kind of multiplier effect that policymakers spend years trying to engineer through incentive programs. Banner is achieving it simply by choosing to prioritize local partnerships.

We should also recognize what this means for the resilience of our health care infrastructure itself. A hospital system that is embedded in its local business community — one that understands the needs of its small vendors and invests in their success — is a system that is more connected to the economic realities of the people it serves. That connection matters when it comes to workforce recruitment, community trust, and long-term sustainability, especially as Arizona’s population continues to grow and diversify.

None of this means the work is finished. Arizona’s small businesses continue to face real challenges: rising costs, workforce shortages, and uneven access to capital and contracting opportunities, particularly for businesses owned by women, veterans, and entrepreneurs of color. We would encourage Banner, and other large institutions across the state, to continue expanding transparent pathways for small and diverse suppliers to compete for contracts, and to treat local economic development as a core part of their mission rather than a side initiative.

That commitment matters. As a locally governed nonprofit health system, it reinvests in Arizona — supporting local businesses, strengthening communities, and improving the health of the people who live here.

Arizona’s small businesses are ready to be that kind of partner. We hope more of the state’s largest institutions follow Banner’s lead.

Steve Kaiser is CEO of the Arizona Small Business Association, a nonpartisan advocate for small businesses across the state.