Hospital Group Says Economic Impact $10.3 Billion Annually

As the health care debate heats up in state, the Arkansas Hospital Association (AHA) released an economic impact study that suggests the health care industry in Arkansas accounts for 75,000 jobs and generates up to $10.3 billion in annual economic activity.

The report, produced internally by the association, used the Regional Input-Output Modeling System II (RIMS II) developed by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) and it used data provided in the 2010 and 2011 Medicare Cost Report for hospital expenditures and jobs.

“Most people don’t think of hospitals as economic drivers, but we can quantify that they leave huge footprints on local economies and the entire state for the financial benefit they contribute,” says Bo Ryall, president and CEO of the AHA.

“Even as great as this figure is, hospitals’ non-quantifiable benefit may be just as important. A local hospital dramatically impacts a community’s ability to attract and recruit new businesses. It is a sign of a strong healthcare network with ready access to quality care. Along with strong schools and churches, those networks provide value-added benefits for prospective firms and their employees, and

are an important, if not essential, basic ingredient for community prosperity,” Ryall added.

Specifically, the report said Arkansas hospitals account for:

• 42,300 direct jobs
• Payrolls totaling $2.7 billion
• 32,700 indirect jobs
• $2.25 billion in indirect job earnings
• $2.67 billion in direct spending for supplies and services
• $249.76 million in capital spending
• $458.76 million to local economies

Hospitals are likely to factor into the upcoming state debate on health care and Medicaid reforms. State policy makers are discussing a possible expansion of Medicaid under the auspices of the federal health care law, which could lead to more money for Arkansas hospitals.

Also, a change in the state's Medicaid program from the “fee-for-service” model to a “episodic care” approach is in process. Hospitals will be a key stakeholder in the effort to alter the current Medicaid payment model.

You can read the full report from the AHA at this link.