Transcript Economic Impact of Knox County Hospital

Economic Impact of
Clark County Hospital
Prepared by:
KY Rural Health Works Program
Eric A. Scorsone, Ph.D.
UK College of Agriculture
Department of Agricultural Economics
Victoria Burke, MS
UK College of Agriculture
Department of Agricultural Economics
Bethany Adams, BSMT
UK Center for Rural Health
KY Rural Hospital Flexibility Program
Introduction:
Health Care & the KY Economy
Health care services: “engine” of growth in rural KY
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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
Clark County Economy
Diversified group of industries
 Manufacturing – 156 million dollars
 Transportation – 55 million dollars
 Retail – 50 million dollars
 Service sector – 100 million dollars
 Clark County Health Care – nearly 36%
of the service sector (36 million)
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
4 major roles for health care in
community economic
development
1. Economic base industry attracting
external dollars
2. Hospitals and health care employees are
purchasers of local goods and services
3. Identifying & addressing supply-demand
gaps
4. A factor to recruit businesses and
workers
Economic prosperity is based
on export or basic industries
Export or basic industry: sell to customers or
businesses from outside the community
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External dollars allow a community to purchase a
wider variety of goods & services
A community must attract & retain export or basic
industries to prosper
Social Security & Medicare dollars are part of the
economic base of the community
Medicare and Medicaid Payments to
Clark County Residents (1969 –
2001)
Economic Impact:
A Basic Introduction
Inflows: 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
 Examples: 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
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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

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Input-output model used to examine
economic impact
Bureau Of Economic Analysis Data used to
examine Clark County industry sectors
Data was Obtained from IMPLAN model
(2000) & Bureau Of Economic Analysis Data
(BEA 2000)
Employment & Income
Multipliers
Employment multipliers:
 For each job in health care, an additional job (s)
is created in other industries
 Clark County employment multiplier is (1.4)
Income multipliers:
 For each dollar of income in health care, an
additional dollar (s) of income is created in other
industries
 Clark County income multiplier is (1.3)
Results:
Employment Impact Multipliers
Employment multiplier effect for Clark County
Health Care industry
 1,200 (approx) jobs in health care
 509 additional jobs are created due to
employment in health care industry
 Total – 1,709 jobs in Clark County are
directly or indirectly tied to Clark County
Health Care system
Results:
Income Impact Multipliers
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Clark County Health Care income is
estimated to be $42 million
Spillover of Health Care income on other
local industries is estimated to be nearly
$13 million
Total income impact is estimated at $55
million
Summary
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Clark County Health Care creates 1,709
local jobs,
Local private economy – Clark County
Health Care represents nearly 12.5% of
income
Compares favorably with Manufacturing
Construction, Wholesale & Retail local
services
This economic impact is likely to grow larger
over the coming decade
Next Steps…
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Undertake a Business Retention and
Expansion Program (BRE) to assess needs
and challenges for health care providers in
Clark County
Form a Leadership Task Force under Chamber
of Commerce
Volunteer Visitors would interview 30 health
care businesses in Clark County
Promote enhanced economic development
role for health care