KY Rural Health Works: Connecting Health Care and Economic Development

1. KY Rural Health Works: Connecting Health Care and Economic Development www.ca.uky.edu/krhw

2. Kentucky Rural Health Works Partners UK Center for Rural Health KY State Office of Rural Health UK Cooperative Extension Service UK Dept. of Agricultural Economics

3. Mission Statement • Increasing Awareness about the Role of Health Care in Economic Development • Providing Tools for communities to invest in health care as an engine of economic growth • Conducting applied research to create a solid foundation for policy analysis and educational programming

4. Awareness Building Economic Impact of Rural Health Care • County, regional and State Level • What is the economic impact of the hospital or other health care providers? • Jobs provided • Income paid • Local purchases of materials and services

5. How? • Economic Impact Reports • Radio Spots • News Releases • Ad Campaigns • Public meetings • Feasibility Studies • Other applied research and training

6. Public Information • Economic impact Report maybe the starting point for a media campaign…. • Press Release • Radio Spot • Roadside Advertising Boards • Flyers and brochures • Using information in health and nutrition programming

7. Providing Tools… • Feasibility Study Training • Assessing the possibility of adding services, networking to meet • Health care objectives • Economic development objectives • Economic Evaluation of: • Preventive care programs • Health care access programs • Performance Based budgeting • Using budget planning to achieve health care strategic goals in communities

8. Examples…. • Demand & Feasibility Studies • Demand for new Dialysis unit • Prospective use for new rural health clinic • Financial Feasibility and Location of new Outpatient surgical unit • Response to service demands from new county industrial park

9. Applied Research… • Economic Analysis of: • EMS (survey) • Telehealth • Consumer expenditure patterns • State and Federal Level • Economic role of Medicaid and Medicare on rural community health sectors • State health and economic development planning

10. Tools for preventive care evaluation… • Program Evaluation Tools: Determine whether your program is making an economic impact on community Examples: • Cost savings to health care providers • Economic benefits of a healthier population • Economic benefit of “Cancer screening program”

11. Why? • To add an element to health care decision making in your community • To alter thinking about economic development in your community • Promote health network development • Address consumer / patient out migration

12. Where? • Health Council or health groups in community • Industrial Development Authority • Chamber of Commerce • Fiscal Court • Newspapers, Radio….

13. NATIONAL HEALTH CARE: THE BIG PICTURE

19. Rural Economic Development

20. Rural Economic Development • Target • Create jobs • Tools • Attract new industry • Invest in workforce education and training • Build new health care facilities or develop healthcare networks, preventive care • Beautify Downtown, invest in tourism • Evaluation • ‘Was the Tool effective in reaching the Objective • Economic Impact Analysis “IMPLAN”

21. Health Care can be used to achieve Econ Dev Objectives • Health Care and Health Education are focused on achieving “Health” targets • Nutritional goals • Quit smoking • Health Care may also play a role in achieving economic development targets: • Create jobs • Diversify businesses in community “don’t put your eggs in one basket”

22. Three Tools to Rural Economic Development • Invest in: • Human Capital • Physical Capital • Amenities (Public Capital) • Just Like your stock portfolio • What mix of stocks, bonds, cash do you want? • What mix of human, physical and public capital do you want your community to invest in?

23. Economic Development Human Capital Attract Migrants for Jobs or Train Current Residents? Jobs bring workers or workers bring jobs Private Capital Physical Capital Amenities: public capital Investments to Attract Employers or Workers? Amenities (Public) Capital

24. Human Capital • People • On the Job Training and Formal Education • Entrepreneurship and Risk Taking • Influenced by: • Culture of region • Family and friends • Nurses, allied health professionals, Doctors, Dentists, nursing home employees

25. Physical Capital • “Things” • Machinery, Computers, Equipment, Buildings • Combine physical capital with people “human capital” to produce goods / services • It’s a lack of “things” that is slowing economic development • Hospital, Clinic, Ambulances, health equipment

26. Amenities (Public Capital) • Environment and Geographical Features • Rivers, lakes, caves, forests, • Public Events • Festivals • Public services • Schools • Roads, bridges, water and wastewater, public safety

27. Evaluation: Connecting Targets and Tools • Need to use the right tools to reach your target • Need to use the right prescription for the illness • Health Care as physical capital • Buildings, equipment • Health care purchases support local business • Health Care as human and social capital • Nurses, doctors, dentists, allied health prof. • Develop workforce to expand and retain health care employers • Health Care as Public Capital • Support industry location, household location

28. Evaluation: Connecting Targets and Tools • Financial Measure • Hospital spend money in local community • Payroll • Goods and Services • Non-Financial Measures • Health care system helps attract new business to region • Preventive care helps promote healthy workforce

29. Rural Economic Development in Pictures Human Capital Financial Target: Create Jobs Target: Create Jobs Non-Financial Physical Capital Public Capital

30. Rural Economic Development in Pictures Financial: new doctor’s staff payroll Target: Create Jobs Target: Create Jobs Human Capital: Investing in a young person’s medical education Non-Financial: attract new employer to town

31. Economic Impact Analysis

32. What is Economic Impact Analysis II… • Is to measure changes in an economy due to a change in one industry • A change in one industry e.g. opening or closure can have an impact on jobs and income on other sectors of the economy • This impact can be measured using what is know as multipliers.

33. What is Economic Impact Analysis I….. • Economic Impact Analysis • Is an evaluation model to determine if the tool is right for the target • Looking forward • Current snapshot • Tells Us Two things… • Economic impact of the existing health care sector • Economic impact of expanding or contracting the health sector • It Does Not tell Us: • Which tool to use?

34. Economic Impact Analysis Multipliers • Industries are linked together by their purchases from each other • These linked purchases produce jobs and income to local residents and commuters in the local economy • For example, hospitals demand goods and services from suppliers, those suppliers in turn demand other goods and services

35. Economic Impact Analysis: Three Types of Multiplier Effects • Direct effects: changes in industries to which a final demand change was made • Indirect effects: changes in other industries as they respond to the new demands of the directly affected industries • Induced effects: reflects changes in household spending from changes in income due to the changes in production

36. Health Care’s Local Financial Linkages • Hospitals, nursing homes, doctors offices, etc… spend money locally • Local spending creates local jobs and local income • Examples include • Floral shops • Waste management • Legal and accounting services • Pharmacies • Some spending is non-local • Medical equipment • consulting

37. County Hospital Expenditure Pattern Purchases per $m in Nursing home sales

38. Nursing Home Expenditure Pattern Purchases per $m in Nursing home sales

39. Economic Impact AnalysisJefferson County Hospitals

40. Economic Impact AnalysisEstill County Hospitals

41. Policy Implications

42. Health Care and Econ Dev Targets • Health Care (acute and Preventive) can… • Promote job growth, • Produce a healthier and more productive population (higher wages, more competitive firms)

43. For Health Care • Recognizing a different role in community • Continuing growth in importance of medical transfer payments to rural areas • Subsidy or funding support similar to manufacturing • Role relative to closure or expansion of facilities • Networking and Telemedicine

44. For health care…. • Different roles in • Large rural hospital centers • Small rural hospitals • No hospital • Nursing homes play a different role

45. For economic development officials • Subsidy and funding support for health care (Why or Why not?) • Capital access financing • Attracting Rural physicians, dentists and professionals to shortage areas can be an econ dev policy • Workforce development and education

46. For economic development officials • Local industrial authorities • Supporting medical facilities in industrial parks • Seeing primary versus secondary importance of industry • Support health and nutrition education programs for workforce

47. Extension Agents Role • Coordinating a campaign to support the local health care system • Bridging the divide between health care and economic development in your community • Providing access to economic impact reports and training

48. Next Steps….. • Request an Economic Impact Report • Begin a Dialogue in your community with health care, economic development officials and community leaders • A follow-up meeting with Extension Agents at State Conference in January • A feasibility study training to follow next year www.ca.uky.edu/krhw