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Wisconsin Hospitals Generate $26 Billion in Economic Activity

 

Patients traveling to Wisconsin for care generate well over $3 billion in economic activity, support more than 6,400 hospital jobs

Mary Kay Grasmick, WHA - 608-274-1820, 575-7516 or mgrasmick@wha.org
Steve Deller, UW-Extension/UW-Madison, SCDeller@wisc.edu

Healthy Hospitals 2015 report coverMADISON (December 3, 2015) ----Wisconsin hospitals generate $26 billion annually in economic activity and directly employ more than 107,000 people in communities throughout the state, according to a new report released today by the University of Wisconsin/UW Extension and the Wisconsin Hospital Association. The report also looks at the impact patients from outside of Wisconsin who receive their health care here have on the state’s economy. 

“Hospitals are major economic drivers in their communities and in our state,” according to Professor Steve Deller, an economist at the University of Wisconsin/UW-Extension and a co-author of the report. “Wisconsin’s high-quality health care, combined with health care providers who are well-respected for their excellent patient care, are also attracting patients from other states to seek care here. In addition, hospitals and health systems are advancing medical science and technology, and as such, are providing therapies that may not be available in other states.”

Over a 12-month period, non-Wisconsin residents had over 545,000 hospital admissions or medical visits here. Residents of Illinois and Minnesota accounted for more than two-thirds of these visits, according to data from the WHA Information Center (http://www.whainfocenter.com)

According to the report, the services associated with providing care to out-of-state patients supported more than 6,400 jobs in hospitals alone. Payments to hospitals from out-of-state patients totaled about $1.0 billion, but when economic multipliers are applied that account for indirect effects, such as the hospital’s purchase of goods and services within the region or in other parts of the state, the total impact to the state’s economy is estimated at $1.3 billion.

Hospitals comprise about one third of total health care spending per capita in Wisconsin. This means other health care services, such as physician office visits, prescription drugs, rehabilitation and long-term care, etc., account for about two-thirds of the total health care spend. When estimates for these services and purchases are included, the impact of out-of-state patients on the state’s economy is well over $3 billion.

Health care is often viewed as being only very local. However, Wisconsin’s national reputation for high-quality health care and the breadth of specialized services available here are likely among the key factors that attract out-of-state patients.

Community Hospitals Help Drive Local Economic Development

When a new industry or business is considering a relocation or expansion, the quality, accessibility and cost of health care factors into the decision on where they will locate. Baby boomers looking to retire also rank “a good nearby hospital” as an important factor in their decision. 

“Wisconsin hospitals and health systems play an important role in our state’s economic health,” according to WHA President/CEO Eric Borgerding. “The hospitals in our state are ‘job creators’ and they are among the state’s largest employers. This study shows that health care is much more to Wisconsin than hospitals, doctors and clinics. The ripple effect of the health care sector in employment numbers and on our state’s economy is enormous. Hospitals are not only tied to the physical health of our communities, they are also directly connected to the state’s economic health.”

Hospitals are Among Largest Employers in Most Communities

Nearly nine out of every ten counties have at least one hospital, and in many communities, particularly in the rural areas of the state, the hospital is one of the largest employers. Deller said for every job created in a hospital, there are an additional 0.878 jobs created in the state. When the multiplier effect is considered, hospitals contribute a total of 201,187 jobs to the Wisconsin economy.

Almost every business and industry located in Wisconsin is affected in some way by the operation of a hospital. The study calculated economic multipliers and estimated that hospitals indirectly account for nearly 115,000 additional jobs statewide because hospitals and their employees purchase goods, services and “bricks and mortar” from other businesses in their communities.

“Wisconsin hospitals represent a significant and growing source of higher-paying employment opportunities in the future,” Deller noted. “A hospital also has positions that attract college-educated professionals, which helps avert a ‘brain drain’ and keeps graduates in our state.”

Hospitals and health systems in nearly every area of the state participate in economic development activities through local Chambers of Commerce and on regional boards. 

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