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1 The Economic Contribution of Hospitals May 2004 Vol. 6, No. 1.

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Presentation on theme: "1 The Economic Contribution of Hospitals May 2004 Vol. 6, No. 1."— Presentation transcript:

1 1 The Economic Contribution of Hospitals May 2004 Vol. 6, No. 1

2 2 …but fewer are aware of the important role of hospitals in the U.S. economy. In 2002: –Hospitals cared for 34 million admitted patients –Hospitals treated 556 million ambulatory patients –Provided emergency care to 110 million patients –Performed 28 million surgeries –Delivered 4 million babies The role hospitals play in providing health care is widely understood…

3 3 Number of Full Time and Part Time Hospital Employees Source: AHA Hospital Statistics, 1992 – In Millions Nationwide, hospitals employ over 4.8 million people.

4 4 Source: Department of Labor, Bureau of Labor Statistics, Current Employment Statistics Survey – custom data request Hospital Employment vs. Employment in Other Industries (in thousands) ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Full-service restaurants General medical & surgical hospitals Limited- service eating places Employment services Grocery stores Offices of physicians Building equipment contractors Department stores In Thousands Hospitals rank second as a source of private sector jobs.

5 5 Percent Change in Quarterly Employment: Hospitals vs. All Industries* Source: Department of Labor, Bureau of Labor Statistics; Recession period defined by National Bureau of Economic Research *Does not include farm employment. Quarterly (3-Month) Percent Change 0.6% 0.5% 0.6% 0.4% 0.3% 0.4% 0.5% 0.4% 0.1% -0.1% -0.3% -0.4% 0.0% -0.2% 0.0% 0.1% -0.6% -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 0.8% Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4 HospitalsAll Industries (Total non-farm) Recession of 2001* Hospitals offer a consistent source of job growth even during recessions.

6 6 Percent of Hospital Expenditures* by Type 4Q03 SOURCE: Centers for Medicare and Medicaid Services, 2003 Professional Fees - 5.4% Utilities – 1.3% All Other: Non-Labor Intensive – 4.2% All Other: Labor Intensive – 5.5% Postage – 0.8% Telephone – 0.3% Professional Liability Insurance – 0.8% Other Products (e.g., Food, Medical Instruments) Other Services Prescription Drugs 12.2% 6.2% 18.4% Wages & Benefits 63.3% *Does not include capital. Along with jobs, hospital dollars support purchases from other businesses.

7 7 Hospital jobs and purchases also support other sectors of the economy. The direct effects of hospitalshospital jobs and purchasesare only part of the story. Hospital activities create ripple effects throughout the economy. –Hospitals purchase goods and services drugs, information technology, food, linens, bricks and mortarfrom other businesses. –Hospital employees spend their paychecks on the goods and servicesgroceries, cars, appliances, clothingproduced by other businesses. –Wages and salaries paid by hospitals are subject to federal, state, and local taxes.

8 8 With ripple effects included, hospitals support more than 15 million jobs. Total Impact of Community Hospitals on U.S. Jobs (in millions) 2002 Direct Jobs Other Jobs Supported by Hospitals (Ripple Effect) Total Jobs Supported Source: The Lewin Group using BEA RIMS-II multipliers applied to 2002 AHA Annual Survey Data Hospitals support one of every nine jobs nationwide

9 9 Hospitals generate substantial business activity. SOURCE: The Lewin Group using BEA RIMS-II multipliers applied to 2002 AHA Annual Survey Data Total Impact of Community Hospitals on U.S. Economy (in $ billions) 2002 Direct EffectRipple Effect Total Contribution Impact on Wages & Salaries Impact on Economy $635 $1,318 $419 $889 $216 $429

10 10 Hospitals support 4 to 13% of state jobs. RI – 8.9% DE – 9.2% DC – 6.1% SOURCE: The Lewin Group using BEA RIMS-II multipliers applied to 2002 AHA Annual Survey Data and BLS total non-farm employment data by state. Less than 5.0% 5.0% - 7.9% 8.0% - 9.9% 10.0% and above Percent of Total Non-farm Employment Supported By Hospital Employment By State 2002

11 11 Hospitals support their communities in many additional ways. Special programs to meet broader health and social needs Charity care programs for patients with limited financial means Medicaid services to other needy patientsnot fully reimbursed Percentage of Community Hospitals Offering Selected Community Outreach Services 2002 Source: Lewin Analysis of AHA Annual Survey data

12 12 Conclusion Hospitals are major contributors to the U.S. economy. Hospitals create a steady source of employment even in economic downturns. Hospitaland hospital employeepurchases of goods and services support other businesses. With ripple effects included: –Hospitals support one of every nine jobs in the U.S. –Hospitals support over $1.3 trillion of economic activity. Hospitals support their communities in many additional ways.


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