Health Care Employees’ Contributions to
the Economy of a Rural State: A study
based on the Nebraska Rural Health
Works Project
Roslyn Fraser, MA
Section on Health Services Research
and Rural Health Policy Analysis
Department of Preventive and Societal
Medicine
1
Acknowledgements
Li-Wu Chen, PhD
Keith Mueller, PhD
Liyan Xu, MS; Brian Hesford, MA
Catherine E. Leo, BA
All rural communities who collaborate in the
process
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Background: the Nebraska Rural
Health Works Project
• 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
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Economic Impact Analysis
• 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
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The Economic Impact of the Health Care Sector on Employment in Nebraska, 2002
41,097 Jobs
from:
25,713 Jobs
from:
105 Hospitals
23,651 Jobs
from:
176 Nursing Care
Facilities
Employment
in the Health
Care Sector
in Nebraska
+
139 Residential
Mental Health,
Retardation, or
Substance Abuse
Facilities
6,921 Jobs
from:
65 Home Health Care
Services
900 Physician
Offices
+
766 Dentist Offices
+
690 Offices of
Other Health
Practitioners
Jobs Created
in Other
Sectors of the
Economy in
Nebraska
36,576
Jobs
+
120 Community Care
Facilities for the Elderly
104,796 Jobs
+
=
in the Health
Care Sector of
Nebraska
30 Medical and Diagnostic
Laboratories
44 Other Ambulatory
Health Care Services
1.41
Multiplier
10,542
Jobs
412 Pharmacies*
132 Outpatient Care
Centers
40 Other
Residential Care
Facilities
1.89
Multiplier
7,414 Jobs
from:
1.72
Multiplier
+
17,029
Jobs
2.14
Multiplier
+
Industry Specific Impact
Industry Specific Impact
7,890
Jobs
1.36
Multiplier
+
2,669
Jobs
1.71
Multiplier
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.
What is a multiplier?
Multipliers measure the total
change throughout the economy
from a one unit change for a
given sector.
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The Economic Impact of the Health Care
Sector In Nebraska, 2002*
• 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.
• 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
Page 2
Components of the Multiplier
1. direct effects
– Initial spending
2. indirect effects
– Businesses buying and selling to one
another
3. induced effects
– Household spending of income earned from
the direct and indirect effects
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SAM Multiplier
• Social Account Matrix (SAM)
direct effect + indirect effect + induced effect
direct effect
– Adjusts household spending patterns based on
different income groups
– Automatically accounts for payroll taxes and
commuting
– Accounts for household to household transactions
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We measured the contribution of
health care employees to the
economy using the induced effect
portion of type SAM multipliers.
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Results of statewide analysis
• Induced effects of the health care sector for
statewide analysis are the highest of any sector
– 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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Results of local analyses
• 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.
• This means employees of the health care
sector are more likely to impact the local
economy positively by spending earned
income locally.
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Overall Job Creation, Nebraska 2002
(Direct and Indirect Impact)
541,807
Services
449,143
Manufacturing
275,958
Health
274,998
Retail Trade
213,962
FIRE
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)
$15,730.55
Manufacturing
$14,597.18
Services
$9,862.20
Health
Retail Trade
Government and non-NAICs
FIRE
Transportation, Warehousing, and Utilities
Construction
AFFH
$7,892.95
$7,343.76
$7,116.65
$6,649.26
$5,782.02
$5,020.25
15
Output Produced by Industry, Nebraska 2002
(Direct and Indirect Impact, in Millions)
$64,973
Manufacturing
$37,283
Services
AFFH
FIRE
Health
Government and non-NAICs
Retail Trade
Transportation, Warehousing, and Utilities
Construction
$26,239
$24,702
$21,872
$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)
$24,983.53
Manufacturing
$20,481.86
Services
$15,054.91
Government and non-NAICs
$13,553.91
FIRE
$13,323.25
Retail Trade
$13,013.28
Health
Transportation, Warehousing,
and Utilities
AFFH
Construction
$10,305.97
$9,763.41
$8,040.23
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Implications
• Rural economic development
• Amenities and opportunities
• Attracts other parts of the economic
engine
• Meeting the needs of changing
demographics
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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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