Acknowledgements
Health Care Employees’ Contributions to
the Economy of a Rural State: A study
based on the Nebraska Rural Health
Works Project
Li-Wu Chen, PhD
Keith Mueller, PhD
Liyan Xu, MS; Brian Hesford, MA
Catherine E. Leo, BA
Roslyn Fraser, MA
Section on Health Services Research
and Rural Health Policy Analysis
Department of Preventive and Societal
Medicine
All rural communities who collaborate in the
process
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Background: the Nebraska Rural
Health Works Project
Economic Impact Analysis
• Measures the economic impact of the
health care sector on the economy of rural
communities
• Used by hospitals, government, state
hospital association, state office of rural
health
• Economic impact analysis performed
using IMPLAN software and data
• Software: IMPLAN model
• Database: IMPLAN’s State Data (NE)
• Other Data: Community Health System
Assessment Survey, Nebraska
Hospital Association employee and
payroll data
• Components: Employment, Income, and
Economic Output
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The Economic Impact of Health Care
by Sub-sector
The Economic Impact of the Health Care Sector on Employment in Nebraska, 2002
41,097 Jobs
from:
Hospitals
25,713 Jobs
from:
105 Hospitals
+
1.89
Multiplier
+
766 Dentist Offices
7,414 Jobs
from:
+
690 Offices of
Other Health
Practitioners
412 Pharmacies*
120 Community Care
Facilities for the Elderly
104,796 Jobs
+
=
132 Outpatient Care
Centers
in the Health
Care Sector of
Nebraska
30 Medical and Diagnostic
Laboratories
44 Other Ambulatory
Health Care Services
1.41
Multiplier
1.72
Multiplier
2.14
Multiplier
1.36
Multiplier
1.71
Multiplier
mmunity
Co
J obs Cr eated
in Other
S ector s of the
E conomy in
Nebras ka
36,576
Jobs
+
10,542
Jobs
+
17,029
Jobs
+
Industry Specific Impact
Pharmacies
Other Medical Services
139 Residential
Mental Health,
Retardation, or
Substance Abuse
Facilities
6,921 Jobs
from:
65 Home Health Care
Services
900 Physician
Offices
40 Other
Residential Care
Facilities
Nursing Home
Doctors &
Other Professionals
23,651 Jobs
from:
176 Nursing Care
Facilities
E mployment
in the Health
Care S ector
in Nebr as ka
Industry Specific Impact
5
7,890
Jobs
+
2,669
Jobs
74,706 Jobs
=
created in other
sectors of
economy in
Nebraska
Aggregated
Impact of Health
Care Sector
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* Pharmacy employment and income figures are from U.S. Census County Business Patterns, 2000. Multipliers are from 2000 IMPLAN Miscellaneous Retail Industry.
Sources: IMPLAN Data 2000. Minnesota IMPLAN Group, Inc. 2003. U.S. Census Bureau County Business Patterns, 2000. http://www.census.gov/prod/www/abs/cbptotal.html. American Hospital
Association Annual Survey Database: Fiscal Year 2000. Health Forum, LLC. 2002.
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The Economic Impact of the Health Care
Sector In Nebraska, 2002*
What is a multiplier?
• One job created in the health care sector of Nebraska
would lead to the creation of an additional 0.71 job in
other sectors of the state’s economy.
Multipliers measure the total
change throughout the economy
from a one unit change for a
given sector.
• One dollar of income earned in the health care sector
of Nebraska would lead to an additional $0.46 of
income earned in other sectors of the state’s
economy.
• One dollar of output created in the health care sector
of Nebraska would lead to an additional $0.91 of
output created in other sectors.
* Not all of the government owned health care facilities were accounted for in the analysis, therefore these figures may understate the total number of employees and total
income for the health sector in Nebraska.
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Sources: IMPLAN Data 2002. Minnesota IMPLAN Group, Inc. 2003. U.S. Census Bureau County Business Patterns, 2002. http://www.census.gov/prod/www/abs/cbptotal.html. U.S. Bureau of the
Census. Census 2002, Summary File 3. http://factfinder.census.gov/bf/_lang=en_vt_name=DEC_2002_SF3_U_DP3_geo_id=04000US31.html
Nebraska Center for Rural Health Research
Components of the Multiplier
Page 2
SAM Multiplier
• Social Account Matrix (SAM)
1. direct effects
– Initial spending
direct effect + indirect effect + induced effect
direct effect
2. indirect effects
– Businesses buying and selling to one
another
– Adjusts household spending patterns based on
different income groups
– Automatically accounts for payroll taxes and
commuting
– Accounts for household to household transactions
3. induced effects
– Household spending of income earned from
the direct and indirect effects
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Results of statewide analysis
• Induced effects of the health care sector for
statewide analysis are the highest of any sector
We measured the contribution of
health care employees to the
economy using the induced effect
portion of type SAM multipliers.
– This is true for all three multipliers: employment,
income, and output
(induced effect: the component of the multiplier
that represents household spending of income
earned, adjusted for payroll taxes, commuting,
and spending patterns based on income levels)
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2
Overall Job Creation, Nebraska 2002
(Direct and Indirect Impact)
Results of local analyses
541,807
Services
• Induced effects of the health care sector
for county-level analyses rank second
above all other sectors in almost all of the
communities we have studied.
449,143
Manufacturing
275,958
Health
274,998
Retail Trade
213,962
FIRE
• This means employees of the health care
sector are more likely to impact the local
economy positively by spending earned
income locally.
208,858
AFFH
196,235
Government and non-NAICs
170,683
Construction
216,873
Transportation, Warehousing, and Utilities
Information
63,104
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Overall Income Earned, Nebraska 2002
(Direct and Indirect Impact, in Millions)
Output Produced by Industry, Nebraska 2002
(Direct and Indirect Impact, in Millions)
$15,730.55
Manufacturing
AFFH
$7,892.95
FIRE
$7,343.76
Government and non-NAICs
Health
$26,239
$24,702
$21,872
$7,116.65
FIRE
Government and non-NAICs
$6,649.26
Transportation, Warehousing, and Utilities
Retail Trade
$5,782.02
Construction
AFFH
$37,283
Services
$9,862.20
Health
Retail Trade
$64,973
Manufacturing
$14,597.18
Services
Transportation, Warehousing, and Utilities
$5,020.25
Construction
$20,830
$20,532
$18,782
$17,182
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Overall Contribution to the Gross State Product, Nebraska 2002
(Direct and Indirect Impact, in Millions)
$15,054.91
Government and non-NAICs
• Amenities and opportunities
$13,553.91
FIRE
$13,323.25
Retail Trade
• Attracts other parts of the economic
engine
$13,013.28
Health
AFFH
• Rural economic development
$20,481.86
Services
Construction
Implications
$24,983.53
Manufacturing
Transportation, Warehousing,
and Utilities
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$10,305.97
$9,763.41
• Meeting the needs of changing
demographics
$8,040.23
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Thank you.
Roslyn Fraser, MA
Department of Preventive and Societal Medicine
University of Nebraska Medical Center
984350 Nebraska Medical Center
Omaha, Nebraska 68198-4350
Office (402) 559-1981
Fax (402) 559-7259
rfraser@unmc.edu
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