the worth of health care by gerald a. doeksen regents professor and director national center for...
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The Worth of Health CareThe Worth of Health Care
ByByGerald A. DoeksenGerald A. Doeksen
Regents Professor and DirectorRegents Professor and DirectorNational Center for Rural Health National Center for Rural Health
WorksWorks
Presentation at Virginia College of Osteopathic Medicineon December 17, 2007
H
W Rural Health WorksR National Center for
I. To measure the feasibility of a medical practice on a rural community
II. To measure the economic contribution of hospital on rural economy
III. To measure the economic impact of medical school on State’s economy
Objectives:
Measuring the feasibility
of a medical practice
Annual Primary Care Physician Office VisitsAnnual Primary Care Physician Office VisitsGenerated in the Example Medical Service AreaGenerated in the Example Medical Service Area
Age 2004 Population Visit Rate Visits 2004 Population Visit Rate Visits Total VisitsUnder 15 882 2.5 2,205 833 2.4 1,999 4,20415-24 782 1.2 938 751 2.2 1,652 2,59125-44 1,270 1.5 1,905 1,203 3.2 3,850 5,75545-64 1,089 3.3 3,594 1,135 4.2 4,767 8,36165-74 310 6 1,860 357 6.4 2,285 4,14575+ 207 7.7 1,594 319 7.1 2,265 3,859Total 4,540 12,096 4,598 16,818 28,914
17,030
PRIMARY MEDICAL SERVICE AREAMale Female
Local Primary Care Physician Office Visits: (58.9%)
Primary Care Physician Office Visits and PhysicianPrimary Care Physician Office Visits and PhysicianShortages for Different Local Usage by ResidentsShortages for Different Local Usage by Residents
in the Example Medical Service Areain the Example Medical Service Area
Usage Level 70% 80% 90% 100%
11,921 13,624 15,327 17,030
2.4 2.8 3.1 3.5
0.4 0.8 1.1 1.5
Primary Care Visits
Number of Primary Care Physicians
Primary Care Physician Shortage
Estimating the economic
impact of a rural physician
on local economy
Physician Office Impacts
Employment 4
Wages, Salaries and Benefits $287,000
Total Clinic Revenue$394,000
Physician Impact on Local Hospital Inpatient & Outpatient Visits,
Employment, and Wages, Salaries & Benefits
No. of Inpatient Visits 134
Inpatient Revenue $457,000
Outpatient Revenue$295,000
Total Hospital Revenue $752,000
Employment 13
Wages, Salaries & Benefits$435,000
EmploymentWages, Salaries,
and Benefits Total Revenue
Clinic 4 $287,000 $394,000Hospital 13 $435,000 $752,000
Total 17 $722,000 $1,146,000
Summary of Physician Impact From Clinic and Hospital
Activities
EstimateSecondary
Impacts
Households
Industry
Basic
ServicesGoods &
$
Inputs
Products
Inputs
$ $
$
$
Services
$ $
Labor
Community Economic System
Total Physician Impact
Employment
Employment Multiplier
Total Impact
Clinic 4 1.38 6 Hospital 13 1.38 17 Total 17 23
Wages, Salaries,
and Benefits Wages, Salaries, & Benefits Multiplier
Total Impact
Clinic $287,000 1.16 $333,000 Hospital $435,000 1.28 $556,000 Total $722,000 $889,000
Revenue Output Multiplier Total Impact
Clinic $394,000 1.37 $540,000 Hospital $752,000 1.32 $993,000 Total $1,146,000 $1,533,000
IN SUMMARYONE RURAL PHYSICIAN
GENERATES: 23 Jobs23 Jobs
$899,000 Wages, Salaries & Benefits$899,000 Wages, Salaries & Benefits
$1,533,000 Total Revenue$1,533,000 Total Revenue
THIS IS A HUGE IMPACT
Estimating the economic
impact health sector
on local economy
Zip Code Area2000
Population 2006 Estimated
PopulationPercent Change
2000 - 2006
Medical Service Area - Population by Zip Code Areas38316 Bradford 2,922 2,806 -4.0%38330 Dyer 4,424 4,450 0.6%38233 Kenton 3,005 3,005 0.0%38369 Rutherford 1,967 1,918 -2.5%38382 Trenton 9,866 9,601 -2.7%38389 Yorkville -0- -0- -1.4%
Total of Zip Code Areas 22,184 21,780 -1.7%
Gibson General Hospital Medical Service Area Population2000 Census Population, 2006 Estimated Population
Health Care EntityNumber of Employees
Income (Wages, Salaries, & Proprietors' Income, & Benefits)
Hospital 83 $4,961,169
Offices of Physicians, Dentists, & Other Health Practitioners 90 $5,634,738
Nursing & Protective Services 224 $5,390,824
Pharmacies 60 $2,703,804
Other Medical & Health Services 400 $5,321,727
TOTALS 857 $24,012,262
Direct Impact of Health Servicesof Gibson General Hospital in Gibson County, TN, 2007
CommunityEconomic
System
Households
Industry
Basic
ServicesGoods &
$
Inputs
Products
Inputs
$ $
$
$
Services
$ $
Labor
Health Care Number of Employment Secondary Total
Entity Employees Multiplier Impact Impact
Hospital 83 1.69 57 140
Offices of Physicians, Dentists, & Other Health Practitioners
90 1.51 46 136
Nursing & Protective Services 224 1.49 110 334
Pharmacies 60 1.59 35 95
Other Medical & Health Services
400 1.81 324 724
Totals 857 572 1,429
Employment Impact of Health Services
in Gibson General Hospital Medical Service Area, Gibson County, TN, 2007
Health Care Income Secondary Total Retail 1% SalesComponent Income Multiplier Impact Impact Sales Tax
Hospital $4,961,169 1.47 $2,331,749 $7,292,918 $1,750,300 $17,503
Offices of Physicians, Dentists, & Other Health Practitioners $5,634,738 1.33 $1,859,464 $7,494,202 $1,798,608 $17,986
Nursing & Protective Services $5,390,824 1.47 $2,533,687 $7,924,511 $1,901,883 $19,019
Pharmacies $2,703,804 1.55 $1,487,092 $4,190,896 $1,005,815 $10,058
Other Medical & Health Services * $5,321,727 1.45 $2,394,777 $7,716,504 $1,851,961 $18,520
Totals $24,012,262 $10,606,769 $34,619,031 $8,308,567 $83,086
Income Impact of Health Servicesin Gibson General Hospital Medical Service Area, Gibson County, TN, 2007
- Use to gain community support
- Use to gain market share
Measuring the economic impact of a medical school on a state’s
economy
Impact consists of:
Operational activities Capital projects Student spending Visitor Spending
Category AmountEmployment Impact
LMU Employment 52Higher Ed. Sector Employment Multiplier
1.61
Secondary Employment Impact 32TOTAL Employment Impact 84
Income ImpactLMU Income $4,850,701 Higher Ed Sector Income Multiplier 1.54Secondary Income Impact $2,619,379
TOTAL Income Impact $7,470,080
Retail Sales and Sales Tax ImpactRetail Sales $2,320,207 State Sales Tax (7%) $162,414
Employment, Income and Retail Sales Impact of LMU-DeBusk College of Osteopathic Medicine on the State of Tennessee
from Operational Activities, FY 2008
Direct Construction Secondary TotalEmployment Employment Employment Employment
Multiplier Impact ImpactFY 2006 12 1.72 9 21FY 2007 182 1.72 131 313FY 2008 68 1.72 49 117
Year
Employment Impact of LMU-DeBusk College of Osteopathic Medicine on the State of Tennessee from Construction Activities, FY 2006-2008
Direct Construction Secondary Total Retail SalesIncome Income Income Income Sales Taxes
Multiplier Impact Impact2006 $470,974 1.7 $329,668 $800,622 $248,673 $17,407 2007 $7,182,425 1.7 $5,027,698 $12,210,123 $3,792,464 $265,473 2008 $2,666,620 1.7 $1,866,634 $4,533,254 $1,408,029 $98,562
Year
Income and Retail Sales Impact of LMU-DeBusk College of Osteopathic Medicine on the State of Tennessee from Construction Spending, FYs 2006-2008
Category AmountEmployment Impact
Jobs from Student Non-university Spending 16Retail Trade and Services Employment Multiplier 1.85Secondary Employment Impact 14
TOTAL Employment Impact 30
Income ImpactIncome from Student Non-university Spending $657,394 Retail Trade and Services Income Multiplier 1.83Secondary Income Impact $545,637
TOTAL Income Impact $1,203,031
Retail Sales and Sales Tax ImpactRetail Sales $373,661 State Sales Tax (7%) $26,156
Employment, Income and Retail Sales Impact of LMU-DeBusk College of Osteopathic Medicine on the State of Tennessee from Student Spending, FY 2008
Category AmountEmployment Impact
Jobs from Visitor Spending 6Retail Trade and Services Employment Multiplier 1.44Secondary Employment Impact 3
TOTAL Employment Impact 9
Income ImpactIncome from Visitor Spending $135,398 Retail Trade and Services Income Multiplier 1.76Secondary Income Impact $102,902
TOTAL Income Impact $238,300
Retail Sales and Sales Tax ImpactRetail Sales $74,016 State Sales Tax (7%) $5,181
Employment, Income and Retail Sales Impact of LMU-DeBusk College of Osteopathic Medicine on the State of Tennessee from Visitor Spending, FY 2008
Sector Direct Multiplier Total ImpactCollege Operations 52 1.61 84Construction 68 1.72 117Student
Spending1 16 1.85 30Visitor Spending 6 1.44 9TOTAL 142 240
Employment
Economic Impact of LMU-DeBusk College of Osteopathic Medicine on the State of Tennessee, FY 2008
Sector Direct Multiplier Total Impact Retail Sales 7 Cent TaxCollege Operations $4,850,701 1.54 $7,470,080 $2,320,207 $162,414 Construction $2,666,620 1.7 $4,533,254 $1,408,029 $98,562
Student Spending1 $657,394 1.83 $1,203,031 $373,661 $26,156 Visitor Spending $135,398 1.76 $238,300 $74,016 $5,181 TOTAL $8,310,113 $13,444,665 $4,175,913 $292,313
Income Sales Tax
Economic Impact of LMU-DeBusk College of Osteopathic Medicine on the State of Tennessee, FY 2008
Measuring the economic impact of a typical medical
class
Employees Wages, Salaries, BenefitsPhysician Practice 4 $287,700 Hospital Activity 13 $435,000 TOTAL 17 $722,000
Employment and Income Generated by Physicians fromPhysician Practice and Hospital Activity
Category AmountEmployment Impact (per graduate)
Jobs from Physician Practice and Hospital 17Physician Sector Employment Multiplier 2.06Secondary Employment Impact 18
TOTAL Employment Impact 35Income Impact (per graduate)
Income from Physician Practice and Hospital $722,000 Physician Sector Income Multiplier 1.51Secondary Income Impact $368,220
TOTAL Income Impact $1,090,220 Retail Sales and Sales Tax Impact
Retail Sales $338,622 Sales Tax (7%) $23,704
Employment, Income and Retail Sales Impact of Typical LMU-DeBusk College of Osteopathic Medicine Graduate on the State of Tennessee
Category AmountEmployment Impact
Total Jobs per Physician Practice 35Estimated Number Practicing in Tennessee x 45
TOTAL Employment Impact 1,575Income Impact
Total Income per Physician Practice $1,090,220 Estimated Number Practicing in Tennessee x 45
TOTAL Income Impact $49,059,900 Retail Sales and Sales Tax Impact
Retail Sales $15,238,004 Sales Tax (7%) $1,066,660
Employment, Income and Retail Sales Impact of Typical
Class on the Rural Tennessee EconomyDeBusk College of Osteopathic Medicine Graduating
Economic Impact Applications
Completed:1. Impact of Health Sector on Local Economy2. Impact of Hospital on Local Economy3. Impact of Hospital on State Economy4. Impact of Medicaid Program on State
Economy5. Impact of Construction of New Hospital on
Economy6. Impact of Clinic on Local Economy7. Impact of Telemedicine on Local Economy8. Impact of Pharmacy on Local Economy9. Impact of Medical School on State Economy
Summary of Economic Impact Applications
Model can measure economic impact at:
Zip Code Level County Level Regional Level State Level National Level
National Rural Health Works Website:
www.ruralhealthworks.org
Oklahoma Rural Health Works Website:
www.okruralhealthworks.org
H
W Rural Health WorksR National Center for