“How To” Derive the Economic Impact of Health Services on the Local Economy

1. “How To” Derive the Economic Impact of Health Services on the Local Economy Nursing Homes Hospitals Community Physicians, Dentists, Etc. Pharmacies Other Services

2. Economic Impact Study Illustration: The Economic Impact of Health Services on the Economy of Noble County, Oklahoma National Center for Rural Health Works Oklahoma Cooperative Extension Service, Oklahoma State University Oklahoma Center for Rural Health Oklahoma Office of Rural Health, OSU Health Sciences Center College of Osteopathic Medicine, Oklahoma State University National Association of Counties Project Funded by the federal Office of Rural Health Policy Study Date: March 2010

3. Economic Impact Study • Determine medical service area of study • Collect primary data from local sources • Derive economic impact • Install IMPLAN software and IMPLAN data and run model • Prepare economic impact tables in Excel

4. Determine Medical Service Area • Medical service area • For this example: Medical service area is the county of Noble County, Oklahoma

5. Primary Data Collection From the local sourcesin Noble County: • Need total number of full-time and part-time employees for all health entities (NOT FTEs) • Need total wages, salaries, and benefits and proprietor income, when and if applicable • Need construction costs (exclude land costs and equipment costs) for each year of construction

6. Health Services Data Needed All health entities in the medical service area: • Hospitals • Physicians & offices – primary care, specialists, dentists, other health practitioners • Long-term care facilities; nursing homes, assisted living, mental health or developmentally disabled group homes; etc.

7. Health Services Data Needed • Home health care services • Pharmacies and DME • Other medical & health services; outpatient rehab, independent laboratories, mental health, etc. • May want to include Health Dept., Dept. of Human Services or Social Services or Welfare; Community Mental Health Centers, etc.

8. Construction Data Needed Hospital Construction Costs • Could be other than hospital construction; i.e, physician office building, dialysis center, etc. • Example will illustrate hospital construction costs over two years (could be any number of years) • Data received from local sources at the local hospital

9. PRIMARY Health Services Data Needed • Should include all health services provided to the county (or medical service area) • Determine construction or capital improvement projects to include • Usually obtained through conference call(s) and follow-up emails from local contacts

10. Local Data from Noble County • (Direct Economic Activities OR Direct Impact)

11. Local Construction Data for Noble County Hospital (Direct Economic Activities/Direct Impact)

12. Derive Economic Impact Multipliers Utilizing IMPLAN Software Version 3.0 • Install IMPLAN3 appliance (Black Box; i.e., external hard drive) • Installation video is available on the MIG website and from the CD or IMPLAN3 appliance • Be sure to keep your invoice for the IMPLAN3 software to have your registration number (must register before 9 sessions)

13. Derive Economic Impact of Health Services on Local Economy Prepare IMPLAN model • Need IMPLAN3 software and appliance installed and check for updates • Need IMPLAN data available on IMPLAN3 appliance • Install Structural Matrices for data year • Run IMPLAN model and derive multipliers • Prepare economic impact tables in Excel

14. Utilize Implan Software, Version 3.0 (IMPLAN3) This illustration is based on the IMPLAN3 Software (Version 3.0) Once installed, open IMPLAN3 by clicking on the IMPLAN3 icon

16. Check for Updates • Once IMPLAN3 is open, go to ‘Help’ • Then select ‘Check for Updates’ • If box appears showing an update is available, then select “Yes” to install the update

19. Check for Updates • If no updates, box will appear: ‘IMPLAN3 is up to date’ Check “OK”

21. Implan Data Availability Need IMPLAN data available Download data from CD received from Minnesota IMPLAN Group, Inc. (MIG) and save to IMPLAN3 Appliance to folder: IMPLAN Data Files OR Order data from MIG website; Invoice will be sent and then download data in Software

23. Download IMPLAN Data in IMPLAN3 Software • In IMPLAN3 software, click on ‘Help’ • Then ‘Download Data Order’ • A box will appear in center • From the invoice, use the Order Number and type in the ‘Order ID’ box • From the invoice, use the Order Key and type in the ‘Order Key’ box

26. Download IMPLAN Data in IMPLAN3 Software • If Order ID and Order Key are correct, the software will automatically download your data into the IMPLAN data files on the IMPLAN3 appliance (Black Box) • Then click ‘OK’ (On your screen will appear ‘Your updates were downloaded successfully.’)

28. Structural Matrices Installed • Each year new IMPLAN data are available and new Structural Matrices are required • Should be updated when you download software updates. • If you receive new data and the model does not work, check to be sure you have the latest structural matrices!

29. Have Local Primary Data Available Before Running IMPLAN Model • Need full-time and part-time employment • Need wages, salaries, and benefits • Need proprietor income, if applicable or available • Need this data for all health entities within the medical service area

30. Local Data from Noble County • (Direct Economic Activities OR Direct Impact)

31. READY to Run IMPLAN model • IMPLAN3 software and appliance are installed and updated • IMPLAN data is purchased and downloaded onto the IMPLAN3 appliance • Structural Matrices are installed

32. IMPLAN - Industry Sectors All industry sectors are based on current government classification system: North American Industry Classification System (NAICS)

33. Economic Impact Study OBJECTIVES: Derive the direct, secondary, and total economic impact of the health services in Noble County on employment and income. Derive the direct, secondary, and total economic impact of construction activities on employment and income.

34. Run IMPLAN Model - Overview • Have local data available (direct economic activities OR Direct Impact) • Open the IMPLAN3 software • Build the study area (New Model) • Verify selected sector data in IMPLAN • Create shadow industry sector, if necessary • Construct model to derive Type SAM (Type II) multipliers • Utilize multipliers from reports in economic impact tables in Excel • Calculate local retail sales capture ratio and use to calculate retail sales and sales tax in the economic impact tables in Excel

35. Run the IMPLAN Model – Build the study area • IMPLAN3 software should be open or • Select the ‘IMPLAN3 icon’ • Select ‘New Model’ • Go to ‘File Name’ and enter a name for the study area • <Noble Co OK 08 Data> • Select ‘Save’ • You just built the study area that you will be working on (IMPLAN saves this as a model on the IMPLAN3 appliance under ‘IMPLAN User Data’, ‘Models’). The model will be saved there if you need to use it again later.

37. Run the IMPLAN Model – Select IMPLAN Data A box ‘Available IMPLAN Data Files’ will appear Select ‘Change Data Folder’ A ‘Browse for Folder’ box will appear Select ‘IMPLAN3 appliance’ folder Select ‘IMPLAN Data Files’ folder Select ‘2008’ Select state ‘OK’ The data for OK will populate the upper window in the ‘Available IMPLAN Data Files’

45. Run the IMPLAN Model – Review IMPLAN Data • ‘IMPLAN Model Economic Overview’ screen shows: • ‘Model Information’ on the left hand side • ‘Gross Regional Product’ at the top right including ‘Value Added’ and ‘Final Demand’ and ‘Economic Indicators’ • ‘Top Ten Industries’ by: • Employment • Labor income • Output

48. Run the IMPLAN Model – Review IMPLAN Data To view and modify IMPLAN data, select ‘File’, then ‘User Preferences’ In ‘User Preferences’ box, select ‘Analysis’ then ‘Advanced Modeling’ Select on all 3 categories under ‘Advanced Modeling’: ‘Enable Accounts Explorer’ ‘Enable Model Customization’ ‘Enable Multi-Regional Analysis’ Select ‘Close’