Economic Impact of Marshall County Hospital

1. Economic Impact of Marshall County Hospital

2. Economic Impact of Marshall County Hospital KY Rural Health Works Program Eric A. Scorsone, Ph.D. UK Department of Agricultural Economics UK Cooperative Extension Service Victoria Burke, MS UK Department of Agricultural Economics Bethany Adams, MHA UK Center for Rural Health KY State Office of Rural Health

3. Introduction: Health Care & the KY Economy Health care services: “engine” of growth in rural KY • 1980’s – health care industry earnings represented 6.7% of all industry earnings • 1990’s – health care industry earning increased to 12.3% in KY • Health care is 3nd largest industry category in KY trailing only manufacturing and state/local government • Medical transfer payments represent ~10% of KY’s personal income

4. Health Care in National Economy

5. Why are health care services growing so quickly? Response to increasing levels of retirement & medical transfer payments (Demographics) • Retirement-based personal income is fastest source of income growth in rural areas • 1990 – represented 4.1% • 1999 – represented 6.2% • Non-Wage income growing at twice the rate of wage based income

6. Marshall County Economy Diversified group of industries in Marshall County • Manufacturing – 192 million dollars • Service Sector – 68 million dollars • Government – 53 million dollars • Retail – 41 million dollars • Marshall County HealthCareSystem • Represents nearly 22.4% of the service sector • Health Care industry - 15 million dollars • However, this does not include the full economic impact of the health care sector…

7. Economic Prosperity is Based on Two Factors • Export industry: sell to customers or businesses from outside the community • External dollars allow a community to purchase a wider variety of goods & services • A community must attract & retain export industries • Social Security & Medicare dollars are part of export industry • Retain Local Income • Provide goods and services locally for consumers and businesses

8. 4 Major Roles for Health Care in Community Economic Development • Economic base industry attracts external dollars • Health care attracts external dollars into the community from outside the local area • The Hospital and health care employees are purchasers of local goods and services • keeps local dollars at home • Identifies & addresses supply-demand gaps • Are there health services that can be provided locally where people are currently leaving the community? • A factor to business recruitment & retention • attracts & retains local industries & companies • promotes a healthy and productive workforce

9. Medicare and Medicaid Payments to Marshall County Residents (Thousands) $ Years

10. Economic Impact: A Basic Introduction Inflows: export (external) dollars coming into a community • Expands size & strength of local economy • Examples: federal and state expenditures, tourism Outflows: Leakages out from the local economy • Does not create local jobs or local income • Example: non-local purchases of good & services such as receiving medical care in another county or urban area.

11. Economic Impact of Health Care is Dependent on Several Factors • Local & non-local purchases • Health care professionals are local consumers • Hospital expenditures & hospital employee expenditures are called multiplier effects • Multiplier represents recycling of local dollars & income

12. Methodology & Data • Input-output model used to examine economic impact • Bureau of Economic Analysis Data used to examine Marshall County industry sectors • Hospital financial data • Data was obtained from IMPLAN model (2000) & Bureau Of Economic Analysis Data (BEA 2000)

13. Multipliers

14. Multiplier Results: Marshall County Health Sector Impact on Marshall County Output (Sales)

15. Multiplier Results: Marshall County Hospital Impact on Marshall County Output (Sales)

16. Multiplier Results: Marshall County Health Sector Impact on Marshall County Employment

17. Multiplier Results: Marshall County Hospital Impact on Marshall County Employment

18. Multiplier Results: Marshall County Health Sector Impact on Marshall County Labor Income

19. Multiplier Results: Marshall County Hospital Impact on Marshall County Labor Income

20. Multiplier Results: Marshall County Hospital Impact on Marshall County Value Added

21. Summary: Marshall County Health Care Sector • The local health care sector represents 5% of jobs and nearly 3% of personal income in Marshall County • Compares favorably with Manufacturing Construction, Wholesale & Retail • This economic impact is likely to grow larger over the coming decade

22. Summary: Marshall County Hospital • Economic activities of Marshall County hospital & its employees created: • 319 local jobs, • 17.4 million in local revenues, • 9.2 million dollars in labor income, • 11 million in valued added in Marshall County • ~ 4.3 percent of the local jobs in Marshall County are dependent upon Marshall County Hospital

23. Next Steps….Promote enhanced economic development role for health care Connect Health Care Professionals with Economic Development & Chamber of Commerce Officials by: • Forming a Leadership Task Force under Chamber of Commerce • Undertaking a Business Retention and Expansion Program (BRE) to assess needs and challenges for health care providers in Marshall County • Volunteer Visitors would interview 30 health care businesses in Marshall County

24. For More Information Contact Eric A. Scorsone, Ph.D. (859) 257-7257 Email: escorson@uky.edu Victoria Burke, MS (859) 257-7272 x 246 Email: vkburk0@uky.edu Bethany Adams, MHA (859) 257-7272 x 246 Email: badam2@uky.edu Larry Allen, MA Director, KY State Office of Rural Health 1-800-851-7512 Email: lalle2@uky.edu

25. For More Information Kentucky Rural Health Workswww.ca.uky.edu/KRHW UK Community & Economic Developmentwww.ca.uky.edu/CED/index.html UK Center For Rural Health www.mc.uky.edu/ruralhealth Kentucky State Office of Rural Health www.mc.uky.edu/ruralhealth/SORH/default.htm