Transcript Medical Development as a Catalyst for Economic Development

Medical Development as a Catalyst for Economic Development
Keith Dines, Executive Vice President, Strategic Development
Health care is a major contributor to the U.S. economy…
National Expenditures on Health Services and Supplies as a Percentage of Gross Domestic Product
2004
U.S. GDP
2004
$1.8 Trillion
Hospital Care – 33%
Other Sectors
85.1%
Health
Services and
Supplies
14.9%
Physician Services – 23%
Nursing Home Care – 7%
Prescription Drugs – 11%
Other – 27%
Source: American Hospital Association TrendWatch, May 2004, Vol.6, No. 1
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…fueled by a growing, changing population.
Growth By Age Cohort
% Growth
Over the next 25 years, the population
will grow at an accelerated rate in the
age groups with the highest utilization
of medical services
Under
National Age Distribution
2000-2030
National Population
800,000
5-17
18-24
25-44
45-64
65+
18
Wave of Aging
Baby-Boomers
900,000
Trend Increasing
over long term
300.0
250.0
200.0
150.0
100.0
50.0
0.0
Age Groups
10-yr growth
20-yr growth
700,000
600,000
500,000
400,000
300,000
200,000
100,000
85+
80 - 84
75 - 79
70 - 74
65 - 69
60 - 64
55 - 59
50 - 54
45 - 49
40 - 44
35 - 39
30 - 34
25 - 29
20 - 24
15 - 19
5-9
10 - 14
0-4
-
Age Groups
2000
2010
2020
2030
Source: US Census Bureau; Sun Health Strategic Planning Department; Healthcare Advisory Board,2006
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Healthcare is the largest private-sector employer ...
Medical Employment vs. Employment in Other Industries
2005(1)
4,500
4,000
3,500
Thousands
3,000
2,500
2,000
1,500
1,000
500
0
Full-service
restaurants
General
medical &
surgical
hospitals
Employment
services
Limitedservice
eating places
Grocery
stores
Offices of
physicians
Building
Department
equipment
stores
contractors
Source: Department of Labor, Bureau of Labor Statistics, Current Employment Statistics Survey, custom data request
(1)
Data are as of September 2005
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…supporting a range of workers with varying skill levels…
Healthcare Employment by Occupation Type
2004
2,686.5
Healthcare Practitioner and Technical
793.0
Office and Administrative Support
685.8
Healthcare Support
262.2
Other Occupations
Building and Grounds
Cleaning and Maintenance
194.6
Management
180.6
153.3
Food Preparation and Serving
125.4
Community and Social Services
84.3
Business and Financial Operations
54.8
Installation, Maintenance, and Repair
0
500
1,000
1,500
2,000
2,500
3,000
Number of Employees (Thousands)
Source: Department of Labor, Bureau of Labor Statistics, 2004 National Industry-Specific Occupational Employment and Wage Estimates
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… with jobs that offer higher pay than other industries…
Average Weekly Earnings of Workers, Health Care(1) vs. All Service-providing Industries
1990 - 2004
$800
$700
Health Care
$600
$500
$400
All Service-providing
Industries
$300
$200
$100
$0
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
Source: Department of Labor, Bureau of Labor Statistics, Current Employment Statistics Survey
(1)
Includes physicians employed by hospitals.
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… and provide job stability, even during uncertain times.
Percent Change in Employment, Seasonally-Adjusted: Health Care vs. All Industries1
2002 – 2005
1.0%
In the United States, one out of
every nine jobs is supported by the
health care industry, offering stable
employment even in times of
economic strain.
Recession of 2001*
Quarterly (3-Month) Percent Change
0.8%
0.6%
0.4%
0.2%
0.0%
-0.2%
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4
2002
2003
2004
2005
-0.4%
Hospitals
All Industries (Total nonfarm)
Source: Department of Labor, Bureau of Labor Statistics; Recession period defined by National Bureau of Economic Research
1 – Non-farm
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Health Care entities purchase a variety of services…
Percent of Health Care Costs(1) by Type of Expense
2Q05
Prescription
Drugs
Other Products
(e.g., Food, Medical
Instruments)
19.3%
Professional Fees - 5.7%
6.5%
Utilities – 1.7%
Wages &
Benefits
54.7%
19.5%
Other
Services
Professional Liability
Insurance – 5.7%
All Other: Labor
Intensive – 2.7%
All Other: Non-labor
Intensive – 3.6%(2)
Source: Centers for Medicare and Medicaid Services, September 2005, using base year 2002 weights
(1)
Does not include capital
(2)
Includes postage and telephone expenses
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… and fuel sectors of the economy outside healthcare…
Health Care Services Impact on Sectors of the U.S. Economy (in $ billions)
2004
Industry
Health Care and Social Assistance
Manufacturing
Real Estate and Rental & Leasing
Finance and Insurance
Professional, Scientific, and Technical Services
Retail Trade
Wholesale Trade
Information
Administrative and Waste Management Services
Transportation and Warehousing
Accommodation and Food Services
Other Services
Management of Companies and Enterprises
Utilities
Agriculture, Forestry, Fishing, and Hunting
Educational Services
Arts, Entertainment, and Recreation
Mining
Construction
Total
Economic Impact
$570.6
240.0
151.5
102.0
66.8
65.0
52.3
52.2
49.9
49.9
40.9
40.0
32.3
28.4
23.5
12.8
11.4
10.1
8.0
$1,607.6
Source: The Lewin Group analysis of American Hospital Association 2004 Annual Survey data using BEA industry multipliers for the hospital sector
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… while supporting businesses and jobs across the country...
Impact of Health Care on U.S. Economy (in $ billions)
2004
$495
Impact on
$1,113
Economy
$1,608
$249
Impact on
$343
Wages &
Salaries
$591
Direct Effect
Ripple Effect
Total Contribution
Source: The Lewin Group, using BEA RIMS-II multipliers applied to 2004 American Hospital Association Annual Survey data
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… generating more jobs throughout the entire economy...
Impact of Health Care on U.S. Jobs (in millions)
2004
Direct Jobs
Ripple Effect
4.9
8.0
Total Jobs
Source: The Lewin Group, using BEA RIMS-II multipliers applied to 2004 American Hospital Association Annual Survey data
12.9
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The Arizona health sector holds a quarter-million jobs…
Arizona Industry Employment Projections
2006
Retail Trade
295,662
Health Care & Social Assistance
258,162
Educational Servicces
235,642
Admin/Support/Waste Mgmt & Remediation Svcs
227,263
Public Administration (Government
220,792
Accommodation & Food Services
214,835
Construction
193,656
Total Self-Employed & Unpaid Family Workers
179,691
Manufacturing
176,469
Finance & Insurance
121,709
Professional, Scientific, & Technical Services
110,393
Wholesale Trade
100,921
Other Services (Except Government)
92,407
Transportation & Warehousing
69,342
Information
50,848
Real Estate & Rental & leasing
45,532
Arte, Entertainment, & Recreation
31,159
Agriculture, Forestry, Fishing & Hunting
Management of Companies & Enterprises
Utilities
Mining
28,000
21,816
12,097
7,963
Source: Arizona Dept of Economic Security; US Dept of Labor, Bureau of Labor Statistics
note – Includes non-hospital based healthcare employees
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…with robust job growth projected to continue.
Health Sector1 Leads State-wide in New Job Growth Through 2013
Health Care & Social Assistance
114,332
Admin/Support/Waste Mgmt & Remediation Svcs
105,544
Retail Trade
68,508
Construction
57,032
Educational Servicces
45,820
Accommodation & Food Services
41,754
Public Administration (Government
39,673
Wholesale Trade
26,077
Professional, Scientific, & Technical Services
22,687
Finance & Insurance
18,644
Transportation & Warehousing
14,251
Other Services (Except Government)
14,154
Manufacturing
8,055
Real Estate & Rental & leasing
6,976
Arte, Entertainment, & Recreation
6,403
Information
4,915
Agriculture, Forestry, Fishing & Hunting
3,966
Total Self-Employed & Unpaid Family Workers
3,629
Management of Companies & Enterprises
3,342
Utilities
2,486
Mining
51% 10-year
growth rate
403
Source: Arizona Dept of Economic Security; US Dept of Labor, Bureau of Labor Statistics
(1) – Includes non-hospital based employees
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…boosting overall economic and social well-being.
Across the country healthcare providers make significant
contributions to the economy, providing large numbers of
high-paying, stable jobs to healthcare workers.
At a local level, healthcare providers can fuel economic
development both through the direct impact of their payroll
dollars, as well as through the purchasing of other goods and
services that support the provision of care.
Further, the presence of healthcare providers boosts the
region’s attractiveness to new residential and commercial
interests through a variety of services that maintain the
optimum health status of the community.
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