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UCHC Expansion Pathways: Economic Impacts Peter Gunther Sr. Research Fellow CCEA REMI Spring Conference Amherst MA April 23, 2009.

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Presentation on theme: "UCHC Expansion Pathways: Economic Impacts Peter Gunther Sr. Research Fellow CCEA REMI Spring Conference Amherst MA April 23, 2009."— Presentation transcript:

1 UCHC Expansion Pathways: Economic Impacts Peter Gunther Sr. Research Fellow CCEA REMI Spring Conference Amherst MA April 23, 2009

2 Objectives Enhance the Supply of Doctors and Dentists to Offset Abnormal Retirement Rates Midst Aging Population Improve the Quality of Training – Increase Offerings – Attract HQPs Augment Operating Revenues – More Paying Beds – Capacity to Lead Clinical Trials – Augment R&D Funding – Medical Tourism – Attract More Students Assess Economic and Health Impacts of Alternative Pathways for UCHC Expansion

3 Additional Background Medical Training Hospitals Differ from Strictly Patient Care Ones for Pedagogical Reasons & R&D Including More Precise Instrumentation The Main UCHC Campus Is the John Dempsey Hospital (JDH) JDH is Inadequate: – Has Only 224 Beds – HVAC System is Overloaded – Built as Circle with Irregularly Shaped ORs – Makes it Difficult to Attract and Retain Staff – Inadequate Capacity to Lead Clinical Trials

4 Alternative Additive Pathways Expansion of JDH and Enrolments Collaboration and Phase 2 and 3 Clinical Trials Attraction of Gurus and Medical Tourism Expanded Clinical Trials

5 Methodology Define Incremental Economic Stimuli for each Pathway 2010 to 2040 – Construction – Operations Estimate Key Economic Impacts Using REMI Estimate Amenity Benefits Outside of REMI If You Invest, It Must Earn Revenue or Model Will Treat It As a Bad Investment

6

7 Key Economic Indicators Employment Incomes Taxes and Disposable Income Demographics and Labor Force Fiscal Impacts Amenity Benefits

8 Expansion of JDH and Enrolments: Stimuli $475 Million Construction 2010-2015 Defined by Activity Increase in Staffed Beds from 224 to 250 Clinical employment Increases at Current JDH Averages per Bed and carry-out R&D at present average levels Faculty increase over ten years Support Staff Increase Commensurate with Statewide Averages to Physician and Surgeons Enrolments in Medicine and Dentistry Increase at 20/yr 2016-2019 Prior to graduations, medical students are not paid by the University Medical Faculty Increase at Current Faculty/Student Ratio Commensurate Increase in Support Staff Dentists Commence Practicing after Graduation Medical Internships and Residencies Last 2.9 Yrs. (Current Average) State continues to benefit for surplus of Federal subsidies over payments 52% of Graduates Remain in Connecticut to Practice with Average Staff Complements Annual Attrition is 1.5%

9 Expansion of JDH and Enrolments: Employment

10 Expansion of JDH and Enrolments: Income

11 Expansion of JDH and Enrolments: Personal Disposable Income

12 Expansion of JDH and Enrolments: Population and Labor Force

13 Expansion of JDH and Enrolments: NPV Fiscal Impacts (Millions 2008$) JurisdictionRevenuesExpendituresNet Connecticut708.8264.2444.6

14 Expansion of JDH and Enrolments: Amenity Benefits (VOSL) Author Million $ a Year per Patient GDP Deflator Rate of Increase Millions 2008 $ per Patient per Year Day(1996)5.161.377.07 Millar (1998)41.325.29 Bureau of Labour Upper (1998) 41.325.29 Bureau of Labour Lower (1998) 21.322.64 Takeuchi (1998).6161.320.81 Attributing 12 Lives Saved a Year to Improved Faculties at JDH or Additional Expertise at the School of Medicine Yields Amenity Benefits Equal to its Operating Stimulus

15 Plus Collaboration and Clinical: Additional Stimuli Activity/ ExpendituresValues Additional Capital costs Annually Additional Physicians and Surgeons #82 Complementary Staff #167.51 Total Staff Dedicated to Clinical Trials #249.51 Bonus for Expertise (20%)20.00 Wages and Salaries (Millions 2008 $)20.68 Security (Millions 2008$)5.00 Associated Operating Expenditures (Millions 2008$)54.95 Annual Costs (Millions 2008$)80.63 Anticipated Annual Revenues at full capacity (Million 2008 $) (Brings Average Research Grant per Faculty up U of Virginia) 125 Ramp-up (Years after completion of JDS) 10

16 Plus Collaboration and Clinical: Employment

17 Plus Collaboration and Clinical Trials: Income

18 Plus Collaboration and Clinical Trials: Personal Disposable Income

19 Plus Collaboration and Clinical Trials: Population and Labor Force

20 Plus Collaboration and Clinical Trials: NPV of Fiscal Benefits JurisdictionRevenuesExpendituresNet Connecticut1,095.8477.4618.4

21 Collaboration and Clinical Trials: Amenity Benefits The Expected Value from Phase 3 Clinical Trials of 3,000 Persons for a Drug that Is Designed to Extend Life By Two Years Ranges from $643 million to $778 million Per Trial The advantages of reducing AMEs & accelerating patient recovery accrue to: – Patients in terms of quality of life – less chronic pain waiting for care, less time in chronic pain post surgery, and a more rapid return to their jobs and incomes; – Patients families in that burdens on family caregivers become less onerous; – Social workers called upon to share the homecare load; – Where patients are insured, the insurance companies; and, – In cases of the underserved, Medicare. – No account taken of increased efficiencies for Social workers from Improved IT System

22 Plus Partnership and Medical Tourism: Additional Medically Related Stimuli Activity/ExpansionIncrement Communications Unification Designs (Millions 2008 $)30 W&S to Attract Sr. Faculty (Per attracted per year) 500,000 Ramp-up start 2015 Ramp-up end 2024 Incremental W&S Allocated Annually to Attract & Retain Sr. Staff (millions 2008$) 1 Incremental Support staff for Each 2 R&D grants (per additional Sr. Faculty Member Million 2008$ Over and Above Those They May Replace) 0.25 Medical Tourism (# Additional Staffed Beds each Sucsessive Yr.) 10 Associated Construciton Cost (Millions per Staffed Bed 0.1 Hospital Bed Occupancy Rate (%) 80 Const. Hartford Hospital Tower Etc. 2010-2014 (Millions 2008 $) 407

23 Plus Partnership and Medical Tourism: Medical Tourism Stimuli Activity/ExpansionIncrement Accompanying Family per patient 0.5 Accommodations/night 100 Food Services/day 60

24 Plus Partnership and Medical Tourism: Employment

25 Plus Partnership and Medical Tourism: Income

26 Plus Partnership and Medical Tourism: Personal Disposable Income & Taxes

27 Plus Partnership and Medical Tourism: Population and Labor Force

28 Plus Partnership and Medical Tourism: NPV of Fiscal Impacts JurisdictionRevenuesExpendituresNet Connecticut1,719.8893.9825.9

29 Partnership and Medical Tourism: Amenity Benefits Improved Interactive and Shared IT Systems Will Avoid Adverse Drug interactions Improved Quality of Staff and Faculty/Student Ratios will Enhance Reputation and Attract Medical Tourists. Holds Promise of Specialized Teams - Shown to Save Hospital Time and Accelerate Recovery – Less Time Lost from Work – Reduce Homecare – Save Social Worker Costs

30 Expanded Clinical Trials: Amenity Benefits Adds $45 million for funds generated by the R&D staff so average grants per faculty member are at University of Iowa Levels Increases the number of Physicians and Surgeons by 37 each with the New Average Revenue Generation

31 Employment Impacts by Pathway

32 Labor Force Impacts by Pathway

33 Population Impacts by Pathway

34 Personal Disposable Income Impacts by Pathway (Millions Nominal $)

35 CRGDP Impacts by Pathway (Millions 2000 $)

36 Additional Fiscal Impacts by Pathway


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