Transcript Slide 1

Economic Impact of
Marshall County Hospital
Economic Impact of
Marshall County Hospital
KY Rural Health Works Program
Eric A. Scorsone, Ph.D.
UK Department of Agricultural Economics
UK Cooperative Extension Service
Victoria Burke, MS
UK Department of Agricultural Economics
Bethany Adams, MHA
UK Center for Rural Health
KY State Office of Rural Health
Introduction:
Health Care & the KY Economy
Health care services: “engine” of growth in rural KY
 1980’s – health care industry earnings represented
6.7% of all industry earnings
 1990’s – health care industry earning increased to
12.3% in KY
 Health care is 3nd largest industry category in KY
trailing only manufacturing and state/local
government
 Medical transfer payments represent ~10% of KY’s
personal income
Health Care in National Economy
Why are health care services
growing so quickly?
Response to increasing levels of retirement &
medical transfer payments (Demographics)
 Retirement-based personal income is fastest
source of income growth in rural areas
• 1990 – represented 4.1%
• 1999 – represented 6.2%
 Non-Wage income growing at twice the rate
of wage based income
Marshall County Economy
Diversified group of industries in Marshall County
•
•
•
•
Manufacturing – 192 million dollars
Service Sector – 68 million dollars
Government – 53 million dollars
Retail – 41 million dollars
• Marshall County Health Care System
– Represents nearly 22.4% of the service sector
– Health Care industry - 15 million dollars
– However, this does not include the full economic
impact of the health care sector…
Economic Prosperity is Based on
Two Factors
• Export industry: sell to customers or
businesses from outside the community
– External dollars allow a community to purchase a
wider variety of goods & services
– A community must attract & retain export
industries
– Social Security & Medicare dollars are part of
export industry
• Retain Local Income
– Provide goods and services locally for consumers
and businesses
4 Major Roles for Health Care in
Community Economic Development
1. Economic base industry attracts external dollars
•
Health care attracts external dollars into the community
from outside the local area
2. The Hospital and health care employees are
purchasers of local goods and services
•
keeps local dollars at home
3. Identifies & addresses supply-demand gaps
•
4.
Are there health services that can be provided locally
where people are currently leaving the community?
A factor to business recruitment & retention
•
•
attracts & retains local industries & companies
promotes a healthy and productive workforce
Medicare and Medicaid Payments to
Marshall County Residents (Thousands)
60000
50000
40000
30000
20000
Years
2001
1999
1997
1995
1993
1991
S1
1989
1987
1985
1983
1981
1979
1977
1975
1973
0
1971
10000
1969
$
Economic Impact:
A Basic Introduction
Inflows: export (external) dollars coming into a
community
 Expands size & strength of local economy
 Examples: federal and state expenditures,
tourism
Outflows: Leakages out from the local economy
 Does not create local jobs or local income
 Example: non-local purchases of good &
services such as receiving medical care in
another county or urban area.
Economic Impact of Health Care is
Dependent on Several Factors
• Local & non-local purchases
• Health care professionals are local
•
•
consumers
Hospital expenditures & hospital
employee expenditures are called
multiplier effects
Multiplier represents recycling of local
dollars & income
Methodology & Data
• Input-output model used to examine economic
impact
• Bureau of Economic Analysis Data used to
examine Marshall County industry sectors
• Hospital financial data
• Data was obtained from IMPLAN model
(2000) & Bureau Of Economic Analysis Data
(BEA 2000)
Multipliers
Multiplier
Type
Direct
Indirect
Induced
Employment
Health care
jobs
Health care
supplier jobs
Local retail and service
jobs related to health care
employee spending
Income
Health care
employee
income
Health care supplier
employee income
Local retail and service
income related to health
care employee spending
Sales or
Output
Health care
revenue
Health care supplier
revenue
Local retail and service
revenue related to health
care employee spending
Hospital supplier
returns to labor,
management and
ownership
Local retail and service
returns to labor,
management and
ownership
Hospital returns
to labor,
Value Added
management
and ownership
Multiplier Results:
Marshall County Health Sector Impact
on Marshall County Output (Sales)
Direct
Indirect
Induced
Output
Total
Impact
Impact
Impact
Multiplier
Impact
of the
of the
of the
of the
Health Sector Health Sector Health Sector
Health Sector
Output
Output
Output
Output
$22,213,680
$2,915,827
$3,552,992
1.30
$28,682,500
Multiplier Results:
Marshall County Hospital Impact on
Marshall County Output (Sales)
Direct
Impact
of the
Hospital
Output
Indirect
Impact
of the
Hospital
Output
Induced
Impact
of the
Hospital
Output
Output
(Sales)
Multiplier
Total
Impact
of the
Hospital
Output
(Sales)
$13,182,659
$1,720,515
$2,571,433
1.33
$17,474,608
Multiplier Results:
Marshall County Health Sector Impact
on Marshall County Employment
Direct
Indirect
Total
Induced
Impact
Impact
Impact
Impact
of the
of the
Employment
of the
of the
Health
Health
Multiplier
Health
Health Sector
Sector
Sector
Sector
Employment
Employment Employment
Employment
472 Jobs
37 Jobs
66.2 Jobs
1.23
575.3 Jobs
Multiplier Results:
Marshall County Hospital Impact on
Marshall County Employment
Direct
Impact
of the
Hospital
Employment
Indirect
Impact
of the
Hospital
Employment
259 Jobs
17.8 Jobs
Induced
Total
Impact
Impact
Employment
of the
of the
Multiplier
Hospital
Hospital
Employment
Employment
42.2 Jobs
1.23
319 Jobs
Multiplier Results:
Marshall County Health Sector Impact
on Marshall County Labor Income
Direct
Impact
of the
Health Sector
Income
Indirect
Impact
of the
Health
Sector
Income
Induced
Impact
of the
Health
Sector
Income
Income
Multiplier
Total
Impact
of the
Health
Sector
Income
$13,446,837
$1,023,981
$1,234,797
1.17
$15,705,615
Multiplier Results:
Marshall County Hospital Impact on
Marshall County Labor Income
Direct
Impact
of the
Hospital
Income
Indirect
Impact
of the
Hospital
Income
Induced
Impact
of the
Hospital
Income
Income
Multiplier
Total
Impact
of the
Hospital
Income
$7,831,878
$600,877
$818,236
1.18
$9,250,992
Multiplier Results:
Marshall County Hospital Impact on
Marshall County Value Added
Direct
Indirect
Induced
Total
Impact
Impact
Impact
Impact
Value Added
of the
of the
of the
of the
Multiplier
Hospital
Hospital
Hospital
Hospital
Value Added Value Added Value Added
Value Added
$8,790,580
$998,229
$1,645,540
1.30
$11,434,348
Summary:
Marshall County Health Care Sector
• The local health care sector represents 5% of
jobs and nearly 3% of personal income in
Marshall County
• Compares favorably with Manufacturing
Construction, Wholesale & Retail
• This economic impact is likely to grow larger
over the coming decade
Summary:
Marshall County Hospital
• Economic activities of Marshall County
hospital & its employees created:
– 319 local jobs,
– 17.4 million in local revenues,
– 9.2 million dollars in labor income,
– 11 million in valued added in Marshall County
• ~ 4.3 percent of the local jobs in Marshall
County are dependent upon Marshall County
Hospital
Next Steps….
Promote enhanced economic
development role for health care
Connect Health Care Professionals with Economic
Development & Chamber of Commerce Officials
by:
• Forming a Leadership Task Force under Chamber of
•
Commerce
Undertaking a Business Retention and Expansion
Program (BRE) to assess needs and challenges for
health care providers in Marshall County
– Volunteer Visitors would interview 30 health care
businesses in Marshall County
For More Information Contact
Eric A. Scorsone, Ph.D.
(859) 257-7257
Email: [email protected]
Victoria Burke, MS
(859) 257-7272 x 246
Email: [email protected]
Bethany Adams, MHA
(859) 257-7272 x 246
Email: [email protected]
Larry Allen, MA
Director,
KY State Office of Rural Health
1-800-851-7512
Email: [email protected]
For More Information
Kentucky Rural Health Works
www.ca.uky.edu/KRHW
UK Community & Economic Development
www.ca.uky.edu/CED/index.html
UK Center For Rural Health
www.mc.uky.edu/ruralhealth
Kentucky State Office of Rural Health
www.mc.uky.edu/ruralhealth/SORH/default.htm