Southwest Virginia Health Care Sector
Economic Impact Analysis
Tanya Wanchek, Ph.D., J.D.
Center for Economic and Policy Studies
Weldon Cooper Center for Public Service
University of Virginia
March 2009
Prepared for
Health Appalachia
2
TABLE OF CONTENTS
Introduction………………………………………………………...………..5
Study Highlights………………………………………………………...…..5
Data and Methodology …………………………………………….………..6
Methodology ………………………………………………………..6
Data ………………………………………………………...……….7
Regional and State Comparison …………………………………………….9
SWVA Health Care Sector ………………………………………....9
SWVA Mining and Energy Sector ………………………………....12
Virginia Health Care Sector ……………………………..………....13
Locality Summaries ………………………………………………….……..15
Buchanan County …………………….………………………….....16
Dickenson County ……………………….………………………....18
Lee County ………………………………………...………………..20
Russell County ………………………………….…………………..22
Scott County …………………………………….……………….....24
Tazewell County ……………………………...………………….....26
Wise County and City of Norton ……………….………………......28
Bibliography ……………………………………………………….…….....30
3
LIST OF TABLES
1. SWVA – Labor Income, Employment, Sales Tax Revenue......................... 11
2. SWVA – Mining and Energy Sector Labor Income and Employment........ 12
3. Virginia – Labor Income, Employment, Sales Tax Revenue.......................14
5. Buchanan County – Labor Income, Employment, Sales Tax Revenue........ 17
6. Dickenson County – Labor Income, Employment, Sales Tax Revenue...... 19
7. Lee County – Labor Income, Employment, Sales Tax Revenue................. 21
8. Russell County – Labor Income, Employment, Sales Tax Revenue........... 23
9. Scott County – Labor Income, Employment, Sales Tax Revenue............. 25
10. Tazewell County – Labor Income, Employment, Sales Tax Revenue....... 27
11. Wise County and City of Norton –
Labor Income, Employment, Sales Tax Revenue............. 29
LIST OF FIGURES
1.1 SWVA – Health Care Sector Aggregate Economic Impact....................... 10
1.2. SWVA Health Care Sector Employment.................................................. 10
2. SWVA – Mining and Energy Sector Aggregate Economic Impact............. 12
3.1. Virginia – Health Care Sector Aggregate Economic Impact.....................13
3.2. Virginia Health Care Sector Employment................................................. 13
4.1. SWVA – Health Care Sector Labor Income by Locality.......................... 15
4.2. SWVA – Health Care Sector Employment by Locality............................ 15
5.1. Buchanan County – Health Care Sector Aggregate Economic Impact..... 16
5.2. Buchanan County Health Care Sector Employment................................. 17
6.1. Dickenson County – Health Care Sector Aggregate Economic Impact.... 18
6.2. Dickenson County Health Care Sector Employment................................ 19
7.1. Lee County – Health Care Sector Aggregate Economic Impact............... 20
7.2. Lee County – Health Care Sector Employment........................................ 21
8.1. Russell County – Health Care Sector Aggregate Economic Impact......... 22
8.2. Russell County Health Care Sector Employment..................................... 23
9.1. Scott County – Health Care Sector Aggregate Economic Impact.......... 24
9.2. Scott County Health Care Sector Employment....................................... 25
10.1. Tazewell County – Health Care Sector Aggregate Economic Impact.... 26
10.2. Tazewell County Health Care Sector Employment................................ 27
11.1. Wise County & City of Norton –
Health Care Sector Aggregate Economic Impact.......... 28
11.2. Wise County & City of Norton –
Health Care Sector Employment...................................... 29
4
INTRODUCTION
This study describes the contribution of the health care sector to the regional and local
economies in Southwest Virginia (SWVA). The study uses an input-output model to identify the
backward linkages from the health care sector to the overall economy. It provides information
on how the health care sector affects employment and labor income in the region as a whole and
in each of the seven localities in SWVA, including the counties of Buchanan, Dickenson, Lee,
Russell, Scott, Tazewell, and Wise and the City of Norton. It also provides estimates of the
impact of each component of the health care sector on regional and local economies. The results
of the analysis provide a snapshot of the economic impact of the health care sector and serve as a
baseline for future work on the economic impact of potential changes in the region.
STUDY HIGHLIGHTS

In SWVA the health care sector contributes significantly to employment and income in the
region. The health care sector directly provides 8,599 jobs out of 79,939 jobs in the region.
It directly pays $358.8 million in labor income, which includes payroll and proprietor
income. However, once the aggregate economic impact, which includes backward linkages
to other industries and institutions, is accounted for, the health care sector is responsible for
11,142 jobs or 14 percent of the employment and $428.3 million in labor income or 16
percent of the region’s total earning by place of work.

The aggregate economic impact of the health care sector on employment is equivalent to the
economic impact of the mining and energy sector in SWVA, which is also responsible for
approximately 14 percent of the jobs in the region. The impact on labor income is smaller
than the mining and energy sector, with the health care sector contributing to 16 percent of
total earning by place of work compared to 28 percent in the mining and energy sector.

The aggregate economic impact of the health care sector in the Commonwealth of Virginia
accounts for a smaller portion of the workforce, at 8 percent, and labor income, at 8 percent,
than the health care sector in SWVA. The high rate in SWVA is likely due to the relatively
older population and the relatively lower level of diversity in economic activity in the region.

Within SWVA’s health care sector, hospitals have the largest aggregate economic impact at
39 percent, followed by nursing and residential care at 18 percent, and the offices of doctors,
dentists, and other health professionals at 17 percent. In the commonwealth, hospitals count
for only 15 percent of employment, while the offices of doctors, dentists and other health
professionals constitute the largest share of combined direct and indirect employment at 41
percent.

Among the localities within SWVA, the aggregate economic impact on employment ranges
from 5 percent in Dickenson County to 15 percent in Tazewell County and the combined
areas of Wise County and the City of Norton. The aggregate economic impact on labor
earnings by place of employment from 17 percent in Tazewell County to 6 percent in
Dickenson County.
5
METHODOLOGY AND DATA
Methodology
To calculate the economic impact of the health care sector, this study uses the standard tools of
input-output analysis, including the software program, IMPLAN (IMpact analysis for
PLANning), to estimate the contribution of the health care sector to employment and personal
income in the region. This impact study focuses the SWVA region, which includes the counties
of Buckingham, Dickenson, Lee, Russell, Scott, Tazewell, and Wise and the City of Norton. The
health care sector is broken down into seven components:
 Offices of physicians, dentists, and other health professionals – Offices of physicians,
dentists, Chiropractors, Optometrists, mental health practitioners, physical occupational
and speech therapists, podiatrists, and other health practitioners.
 Nursing and residential care – nursing care facilities, residential mental retardation,
mental health and substance abuse facilities, continuing care retirement communities,
homes for the elderly, other residential care facilities.
 Hospitals – General medical and surgical hospitals, psychiatric and substance abuse
hospitals, specialty hospitals
 Home health care
 Other ambulatory services– family planning centers, outpatient mental health and
substance abuse centers, HMO medical centers, kidney dialysis centers, freestanding
ambulatory surgical and emergency centers, outpatient care centers, medical laboratories,
diagnostic imaging centers, ambulatory services, blood and organ banks, other
ambulatory health care services.
 Pharmacies and drug stores– Pharmacies and drug stores are defined by the U.S.
Census Bureau as establishments engaged in retailing prescription or nonprescription
drugs and medicines.
 Dental laboratories
The impact of each of these components is considered both jointly and individually for each
locality and for the region as a whole.
The aggregate economic impact of a sector of the economy is composed of three parts, the direct,
indirect, and induced effects. The direct effect captures the jobs and income that are a result of
individuals directly employed in the sector. It includes such payments as salaries of doctors,
nurses, and maintenance staff working for the health related institutions. The indirect effect is
the changes in other sectors of the economy in response to the spending by health care
institutions. For example, if a hospital cafeteria purchases food locally, then additional
employment occurs in the food sector. Finally, the induced effect is the impact associated with
general increase in spending by households as a result of the direct and indirect effects.
To compute the combined direct, indirect, and induced effects we use IMPLAN multipliers. The
multipliers in this study incorporate the combined impact of the direct, indirect, and induced
effects of a dollar change in direct income or employment, thereby capturing the aggregate effect
on the local economy.1 For example, the employment multiplier for SWVA’s health care sector
This study uses IMPLAN’s Social Accounting Matrix (SAM) multipliers. The IMPLAN model provides three
different types of multipliers. Type I multipliers measure the direct and indirect effects of the health care sector.
1
6
is 1.3, which means that for every individual employed directly in the sector, an additional 0.3
jobs are created outside the health care sector due to indirect and induced effects.
The IMPLAN input-output table requires several restrictive assumptions that may not hold in
practice, particularly when estimating large changes in economic activity. Among the
assumptions are that prices are constant, there are no limitations on supply, and production
technologies remain the same. Relaxing these assumptions would likely lead to smaller
economic impact estimates. An additional assumption is that employment has been relatively
constant since 2004. The employment series for this study is based on 2004 data, which will
produce consistent estimates if there have not been major changes in the labor market since that
time.
This study also misses some less tangible economic and non-economic benefits of the health care
sector. The study does not include changes in worker productivity resulting from the availability
of health care. It also does not measure the societal costs of delayed health care. There are also
non-monetary psychological benefits to improved access to health care that are not included in
the analysis. Nonetheless, this study does provide a tool for understanding the relative
importance of the health care sector in the regional and local economies.
Data
Unless otherwise specified, the data comes from employment and income levels computed by
IMPLAN, which bases its estimate on data from the Bureau of Labor Statistics’ Quarterly
Census of Employment and Wages (ES-202) and the Bureau of Economic Analysis’ Regional
Economic Information System (REIS). Labor income includes employee payroll and proprietor
income and is computed from IMPLAN’s input-output tables.2
Health care sector labor income as a percent of earnings by place of work consists of income
from direct, indirect, and induced sources relative to total earnings by place of work, which
comes from the Bureau of Economic Analysis (BEA). BEA data combines data for Wise County
and the City of Norton.
Data on pharmacies and drug stores is obtained from the U.S. Census Bureau’s County Business
Patterns. Employment data for three localities (Dickenson, Scott, and Norton) is imputed based
on the number of establishments in the region. Data from 2004 are used to be consistent with
data in the IMPLAN model. All data are adjusted to 2009 dollars using IMPLAN output
deflators.
This study also provides estimates of the increase in local retail sales tax revenue that results
from the aggregate economic impact of the health care sector. The impact on retail sales is found
by using the local retail sales capture ratio, which is the fraction of total retail sales relative to
Type II multipliers measure direct, indirect, and induced effects resulting from employee and proprietor spending.
The SAM multipliers include direct, indirect, and induced effects resulting from employee household spending and
the induced effects of spending of firm profits, transfer payments, and other institutional transactions.
2
Additional outcomes available upon request include total value added, other property income, indirect business
taxes, and output.
7
total personal income. To find the retail sales that are attributable to the health care sector (health
retail sales), the retail sales capture ratio is multiplied by the portion of personal income
attributable to the aggregate effect of the health care sector. The health retail sales estimate is
then multiplied by 1 percent, the local retail tax rate, to obtain local retail tax revenue. Retail
sales data comes from the Virginia Department of Taxation3 for the year 2007 and is adjusted to
2009 dollars using IMPLAN household deflators.
To compare the relative importance of the health care sector to the mining industry in the region,
this report also provides data on the aggregate impact of the mining and energy sector in the
region. The activities included within this sector are: oil and gas extraction, coal mining, drilling
oil and gas wells, support activities oil and gas mining, support other mining, and power
generation. Like the health care sector, data are computed by IMPLAN, which bases its estimate
on data from the 2004 Bureau of Labor Statistics’ Quarterly Census of Employment and Wages
(ES-202) and the 2004 Bureau of Economic Analysis Regional Economic Information System
(REIS).
3
Available at the Weldon Cooper Center for Public Service:
http://www.virginia.edu/coopercenter/vastat/taxablesales/tax_sales.html
8
REGIONAL AND STATE COMPARISON
SWVA – Health Care Sector
Methodology Summary
The aggregate economic impact captures not only the direct effect of the health care sector on
labor income and employment, but also the indirect and induced effects. The direct effect is the
employment and income that is a result of individuals directly employed in the sector. The
indirect effect is the changes in other sectors of the economy in response to the spending by the
health care institution. The induced effect is the impact attributable to spending by households
associated with both the direct and indirect effects. Multipliers are used to transform the direct
effect to the aggregate economic impact. An employment multiplier of 1.2 means that for each
for each person employed in the health care sector, an additional 0.2 jobs are created in other
sectors. Similarly, an income multiplier of 1.2 means that a $1.00 increase in income would
result in a $0.20 increase in income in other sectors.
Study Findings







The aggregate economic impact (direct, indirect, and induced effects) of the health care
sector accounts for 14 percent of total employment in the region and aggregate labor income
is 16 percent of earnings in the region.
The health care sector in SWVA directly employs 8,599 people out of 79,939 employed in
the region. SWVA’s health care sector produces an annual labor income of $358.8 million
out of $3,009 million in earnings in the region.
Hospitals are the largest contributor to the health sector, employing 2,952 people directly and
providing $125.8 million in labor income.
The aggregate economic impact from the hospital sector results in employment of 4,126
people and labor income of $160 million. Hospitals accounts for 39 percent of health care
employment.
Offices of physicians, dentists, and other health professionals have the second highest direct
income, at $123.1 million, and employment, at 1,960 people. The aggregate impact results in
a contribution of 17 percent of employment in the health care sector.
The portion of retail sales that is attributable to the health care sector’s aggregate impact is
$123.1 million, of which $1.2 million is returned to local governments as local tax revenue.
The importance of the health care sector in SWVA is likely due to the older population and
the relatively low amount of diversity in economic activity in the region.
9
Figure 1.1. SWVA – Health Care Sector Aggregate Economic Impact
Figure 1.2. SWVA Health Care Sector Employment
10
Table 1. SWVA – Labor Income, Employment, Sales Tax Revenue
Labor Income
Total health sector
Ambulatory
services
Dental laboratories
Offices of
physicians,
dentists, and
other health
professionals
Home health care
Hospitals
Nursing and
residential care
Pharmacies and
drug stores
Direct
effect
($1,000)
$358,766
Employment
Sales ($1,000)
Health
Local
retail
sales tax
sales
revenue
$123,129
$1,231
Multiplier
1.19
Total
impact
($1,000)
$428,331
Direct
effect
8,599
Multiplier
1.30
Total
impact
11,142
$18,520
$665
1.35
1.18
$25,040
$787
535
15
1.41
1.27
755
19
$7,198
$226
$72
$2
$123,403
$25,528
$125,838
1.19
1.23
1.27
$146,678
$3,848
$160,059
1,960
944
2,952
1.42
1.21
1.40
1,785
1,143
4,126
$42,164
$1,106
$46,010
$422
$11
$460
$37,835
1.25
$47,445
1,593
1.22
1,942
$13,639
$136
$26,978
1.26
$33,933
600
1.37
823
$9,755
$98
11
SWVA – Mining and Energy




The mining and energy sector includes oil and gas extraction, coal mining, drilling oil and
gas wells, support activities for oil and gas mining, support other mining, and power
generation.
The mining and energy sector provides a higher aggregate income than the health care sector
but directly employs fewer individuals. Income from direct employment is $561 million
compared to $358.8 million in the health care sector. But the mining and energy sector only
employs 5,929 individuals directly compared to 8,599 people in the health care sector.
Because the mining and energy sector has a larger multiplier, incorporating direct, indirect,
and induced effects, mining and energy contribute to 28 percent of earnings by place of
work, while the health care sector contributes to 16 percent.
The aggregate effect on employment in both sectors is 14 percent.
Figure 2. SWVA – Mining and Energy Sector Aggregate Economic Impact
Table 2. SWVA – Mining and Energy Sector Labor Income and Employment
Labor Income
Direct effect
($1,000)
Mining
& energy
$560,694
Multiplier
1.314
Employment
Total impact
($1,000)
$736,955
Direct effect
5,929
Multiplier
1.88
Total impact
11,134
12
Virginia – Health Care Sector



The health care sector in Virginia accounts for a smaller portion of income and employment
than in SWVA. The aggregate economic impact results in labor income that is 8 percent of
Virginia’s earnings by place of work and 8 percent of employment.
The offices of doctors, dentists, and other health professionals account for 41 percent of the
health sector’s employment, which is significantly higher than the 17 percent in SWVA.
Alternatively, hospitals are only responsible for 15 percent of the aggregate impact of the
health care sector on employment, unlike the 39 percent in SWVA. This suggests that people
in SWVA tend to seek care at hospitals, rather than at physician’s offices more than the
average Virginian.
Figure 3.1. Virginia – Health Care Sector Aggregate Economic Impact
13
Figure 3.2. Virginia Health Care Sector Employment
Table 3. Virginia – Labor Income, Employment, Sales Tax Revenue
Labor Income
Health Sector
Ambulatory
Services
Dental
laboratories
Offices of
physicians,
dentists, and
other health
professionals
Home health care
Hospitals
Nursing and
residential care
Pharmacies and
drug stores
Direct
effect
($
million)
$13,368
Employment
Sales
Health
Local tax
Retail
revenue
Sales ($
(1%)
million)
($1,000)
$5,605
$56,052
Multiplier
1.34
Total
impact
($
million)
$17,967
Direct
effect
249,087
Multiplier
1.48
Total
impact
369,295
$1,180
1.57
$1,850
20,345
1.80
36,678
$577
$5,772
$55
1.33
$73
1,081
1.41
1,523
$23
$228
$7,426
$547
$1,800
1.34
1.44
1.52
$9,934
$788
$2,730
94,439
20,658
34,265
1.69
1.29
1.67
159,305
26,670
57,140
$3,099
$246
$852
$30,992
$2,459
$8,520
$1,810
1.44
$2,602
60,245
1.35
81,540
$812
$8,117
$549
1.57
$861
18,054
1.40
25,295
$269
$2,687
14
LOCALITY SUMMARIES


The health care sector in SWVA is not evenly distributed among the localities. Tazewell
County’s health care sector provides the largest share of labor income in SWVA and
employs the largest number of people at 29 percent and 30 percent respectively.
Dickenson County has the smallest labor income and employment from the health care
sector at 2 percent each.
Figure 4.1. SWVA – Health Care Sector Labor Income by Locality
Figure 4.2. SWVA – Health Care Sector Employment by Locality
15
Buchanan County
Study Findings




The health care sector in Buchanan County employs 906 people directly and pays $36.9
million in labor income, relative to 9,550 people employed in the region and $657 million in
total personal income.
When the aggregate economic impact (direct, indirect, and induced effects) is accounted for,
the health care sector constitutes 11 percent of employment in the region and earnings by
place of work is 10 percent.
Hospitals are the largest component of the health sectors directly employing 406 people. The
aggregate economic impact of the hospital sector results in nearly half of the health sector’s
employment, at 44 percent.
The increase in retail sales resulting from the aggregate impact of the health care sector is
$7.5 million. Buchanan County receives $75,645 local retail sale tax from resulting the retail
sales.
Figure 5.1. Buchanan County – Health Care Sector Aggregate Economic Impact
16
Figure 5.2. Buchanan County Health Care Sector Employment
Table 5. Buchanan County – Labor Income, Employment, Sales Tax Revenue
Labor Income
Total health sector
Ambulatory services
Dental laboratories
Offices of
physicians,
dentists, and other
health professional
Home health care
Hospitals
Nursing and
residential care
Pharmacies and drug
stores
Direct
effect
($1,000)
$36,931
$333
$0
Employment
Sales
Health
Retail
Local
Sales
sales tax
($1,000)
revenue
$7,564
$75,645
$72
$728
$0
$0
Multiplier
1.12
1.20
0.00
Total
impact
($1,000)
$41,382
$398
$0
Direct
effect
906
8
0
Multiplier
1.17
1.25
0.00
Total
impact
1,058
10
0
$11,143
$2,315
$15,450
1.11
1.12
1.17
$12,355
$2,601
$18,066
160
54
406
1.26
1.17
1.21
201
63
490
$2,259
$476
$3,302
$22,585
$4,755
$33,024
$3,657
1.16
$4,260
172
1.12
192
$779
$7,788
$4,033
1.16
$4,659
106
1.18
125
$852
$8,516
17
Dickerson County
Study Findings





The health care sector is only a small part of Dickerson County’s economy. It is responsible
for the direct employment of 206 people out of 4,486 people employed in County and $7.5
million in labor income out of $141 million in earnings by place of work.
The aggregate economic impact (direct, indirect, and induced effects) of the health care
sector results in the employment 235 people and $8.1 million dollars in labor income.
The aggregate impact represents 5 percent of employment and labor income is only 6 percent
of earnings, which is the lowest impact in the region.
Unlike most localities in the region, the lack of a hospital results in offices of doctors,
dentists, and other health professionals having the largest share of the health care sector,
employing 106 people directly and producing $11 million dollars in labor income. The
aggregate impact of these offices is responsible for employment of 38 percent of the health
care sector.
Retail sales attributable to the health care sector account for $1.2 million, of which $12,334 is
collected as local tax revenue.
Figure 6.1. Dickenson County – Health Care Sector Aggregate Economic Impact
18
Figure 6.2. Dickenson County Health Care Sector Employment
Table 6. Dickenson County – Labor Income, Employment, Sales Tax Revenue
Labor Income
Total health sector
Ambulatory services
Dental laboratories
Offices of
physicians,
dentists, and other
health professional
Home health care
Hospitals
Nursing and
residential care
Pharmacies and drug
stores
Direct
effect
($1,000)
$7,490
$441
$0
Employment
Sales
Health
Retail
Local
Sales
sales tax
($1,000)
revenue
$1,233
$12,334
$78
$778
$0
$0
Multiplier
1.09
1.17
0.00
Total
impact
($1,000)
$8,182
$516
$0
Direct
effect
206
17
0
Multiplier
1.14
1.17
0.00
Total
impact
235
20
0
$2,995
$332
$0
1.09
1.10
0.00
$3,271
$366
$0
77
21
0
1.15
1.07
0.00
88
22
0
$493
$55
$0
$4,931
$552
$0
$1,274
1.11
$1,409
51
1.12
57
$212
$2,124
$2,447
1.10
$2,701
40
1.26
50
$407
$4,071
19
Lee County
Study Findings





The health care sector directly employs 908 individuals and results in $34 million in labor
income compared with 7,709 people employed in the locality and $578 million in personal
income.
Like the region as a whole, the health care sector’s aggregate economic impact (direct,
indirect, and induced effects) accounts for 14 percent of employment and labor income is 15
percent of earnings in Lee County.
Also similar to the region as a whole, aggregate impact of hospitals accounts for 37 percent
of employment in the health care sector.
Hospitals are the largest component of the health care sector and directly employ 325 people
and pay $12 million in labor income.
Lee County receives $74,890 in local retail tax revenue resulting from the aggregate impact
of the health care sector on retail sales.
Figure 7.1. Lee County – Health Care Sector Aggregate Economic Impact
20
Figure 7.2. Lee County – Health Care Sector Employment
Table 7. Lee County – Labor Income, Employment, Sales Tax Revenue
Labor Income
Total health sector
Ambulatory
Services
Dental laboratories
Offices of
physicians,
dentists, and other
health professional
Home health care
Hospitals
Nursing and
residential care
Pharmacies and drug
stores
Direct
effect
($1,000)
$34,235
Employment
Sales
Health
Retail
Local
Sales
sales tax
($1,000)
revenue
$7,489
$74,890
Multiplier
1.14
Total
impact
($1,000)
$38,890
Direct
effect
908
Multiplier
1.21
Total
impact
1,100
$1,340
$19
1.20
1.13
$1,614
$21
30
1
1.35
1.10
40
1
$318
$4
$3,107
$41
$11,486
$252
$12,293
1.13
1.17
1.20
$12,947
$295
$14,811
211
13
325
1.28
1.12
1.30
269
15
423
$2,493
$57
$2,852
$24,933
$568
$28,524
$4,683
1.17
$5,499
248
1.13
281
$1,059
$10,589
$4,163
1.18
$4,906
80
1.32
106
$945
$9,446
21
Russell County
Study Findings





The health care sector directly produces $36 million in labor income out of $367 million in
earnings in the locality. The health care sector employs 1,037 people out of 10,215
employed in Russell County.
The health care sector’s aggregate economic impact (direct, indirect, and induced effects)
results in 13 percent of the locality’s employment and a labor income that is 11 percent of
earnings by place of work.
Hospitals were the largest share of the health care sector, directly employing 337 people and
providing $17 million in labor income.
The aggregate impact of the hospital sector is responsible for 34 percent of the health care
sector’s employment.
Local sales tax revenue attributable to the aggregate impact of the health care sector is
$84,258.
Figure 8.1. Russell County – Health Care Sector Aggregate Economic Impact
22
Figure 8.2. Russell County Health Care Sector Employment
Table 8. Russell County – Labor Income, Employment, Sales Tax Revenue
Labor Income
Total health sector
Ambulatory
Services
Dental laboratories
Offices of
physicians,
dentists, and other
health professional
Home health care
Hospitals
Nursing and
residential care
Pharmacies and drug
stores
Direct
effect
($1,000)
$36,146
Employment
Sales
Health
Retail
Local
Sales
sales tax
($1,000)
revenue
$8,426
$84,258
Multiplier
1.16
Total
impact
($1,000)
$41,877
Direct
effect
1,037
Multiplier
1.23
Total
impact
1,278
$2,389
$0
1.24
0.00
$2,958
$0
44
0
1.44
0.00
63
0
$595
$0
$5,952
$0
$9,751
$5,983
$17,251
1.16
1.19
1.19
$11,316
$7,1378
$20,600
186
203
337
1.29
1.19
1.35
240
242
455
$2,277
$1,436
$4,145
$22,769
$14,361
$41,448
$4,360
1.22
$5,306
212
1.16
246
$1,068
$10,675
$2,876
1.22
$3,497
55
1.37
75
$704
$7,036
23
Scott County
Study Findings




The health care sector in Scott County directly employs 643 people out of 6,491 jobs in the
locality and provides $22 million in labor income out of a total of $193 million in earnings in
the region.
Although Scott County does not have a hospital, the aggregate economic impact (direct,
indirect, and induced effects) of health care sector still accounts for 12 percent of
employment in the locality. However, labor income is 13 percent of earnings in the region.
Nursing and residential care constitutes the largest component of the health care sector,
employing 39 percent of the health care workforce. The offices of doctors, dentists, and
other health care professionals are responsible for 24 percent of the health sector’s
employment.
Scott County receives nearly $50,000 in retail sales tax revenue due to the aggregate impact
of the health care sector.
Figure 9.1. Scott County – Health Care Sector Aggregate Economic Impact
24
Figure 9.2. Scott County Health Care Sector Employment
Table 9. Scott County – Labor Income, Employment, Sales Tax Revenue
Labor Income
Total health sector
Ambulatory
Services
Dental laboratories
Offices of
physicians,
dentists, and other
health professional
Home health care
Hospitals
Nursing and
residential care
Pharmacies and drug
stores
Direct
effect
($1,000)
$22,083
Employment
Sales
Health
Retail
Local
Sales
sales tax
($1,000)
revenue
$4,922
$49,223
Multiplier
1.12
Total
impact
($1,000)
$24,707
Direct
effect
643
Multiplier
1.16
Total
impact
748
$1,317
$0
1.19
0.00
$1,565
$0
34
0
1.27
0.00
43
0
$312
$0
$3,117
$0
$8,348
$2,439
$0
1.12
1.15
0.00
$9,323
$2,801
$0
142
134
0
1.27
1.10
0.00
180
147
0
$1,857
$558
$0
$18,573
$5,581
$0
$6,421
1.15
$7,362
261
1.15
300
$1,467
$14,666
$3,558
1.16
$4,130
72
1.27
91
$823
$8,228
25
Tazewell County
Study Findings





The health care sector in Tazewell County directly employs 2,374 people and results in $101
million in labor income out of a total of 20,267 people employed and $691 million in
earnings in the County.
The aggregate economic impact (direct, indirect, and induced effects) of the health care
sector contribute to 15 percent of employment and labor income is 17 percent of earnings by
place of work.
The offices of doctors, dentists, and other health care professionals accounts for the largest
portion of the health care sector, at 35 percent. These offices directly employing 788 people
and produce an income of $48.8 million.
The hospital sector, which includes Carilion Tazewell Community Hospital and Clinch
Valley Medical Center, constitutes the second largest portion of employment in the health
care sector at 28 percent.
The amount of retail sales that is attributable to the aggregate impact of the health care sector
amount to $52.4 million. Of this, $524,307 is returned to Tazewell County as local tax
revenue.
Figure 10.1. Tazewell County – Health Care Sector Aggregate Economic Impact
26
Figure 10.2. Tazewell County Health Care Sector Employment
Table 10. Tazewell County – Labor Income, Employment, Sales Tax Revenue
Labor Income
Total health sector
Ambulatory
Services
Dental laboratories
Offices of
physicians,
dentists, and other
health professional
Home health care
Hospitals
Nursing and
residential care
Pharmacies and drug
stores
Direct
effect
($1,000)
$101,985
Employment
Sales
Health
Retail
Local
Sales
sales tax
($1,000)
revenue
$52,431 $524,307
Multiplier
1.18
Total
impact
($1,000)
$120,026
Direct
effect
2,374
Multiplier
1.28
Total
impact
3,048
$4,967
$0
1.40
0.00
$6,938
$0
214
0
1.31
0.00
280
0
$3,031
$0
$30,305
$0
$48,795
$7,214
$26,933
1.18
1.23
1.26
$57,483
$8,839
$34,044
788
279
645
1.40
1.20
1.38
1,106
334
891
$25,110
$3,861
$14,871
$251,101
$38,612
$148,712
$9,106
1.25
$11,349
335
1.24
417
$4,957
$49,574
$4,970
1.26
$6,273
113
1.38
156
$2,740
$27,403
27
Wise County and City of Norton
Study Findings




Wise County and the City of Norton’s health care sector directly employs 2,527 people and
results in $113.5 million in labor income out of a total of 21,221 jobs and $1,256 million in
total personal income.
The aggregate economic impact (direct, indirect, and induced effects) of the health care
sector constitutes 15 percent of its employment and labor income is 14 percent of the two
localities’ earnings by place of work.
Hospitals are the largest portion of the health care sector, at 48 percent of employment.
Hospitals directly employ 1,238 people and provide $54 million in labor income.
Retail sales attributable to the aggregate effect of the health care spending provide Wise and
Norton with $489,745 in tax revenue.
Figure 11.1. Wise County and Norton City – Health Care Sector Aggregate Economic
Impact
28
Figure 11.2. Wise County and Norton City Health Care Sector Employment
Table 11. Wise County and Norton City – Labor Income, Employment, Sales Tax Revenue
Labor Income
Total health sector
Ambulatory
Services
Dental laboratories
Offices of
physicians,
dentists, and other
health professional
Home health care
Hospitals
Nursing and
residential care
Pharmacies and drug
stores
Direct
effect
($1,000)
$113,591
Employment
Sales
Health
Retail
Local
Sales
sales tax
($1,000)
revenue
$48,975 $489,745
Multiplier
1.15
Total
impact
($1,000)
$130,338
Direct
effect
2,527
Multiplier
1.23
Total
impact
3,115
$7,786
$645
1.30
1.15
$10,114
$740
189
14
1.43
1.23
271
17
$3,800
$278
$38,004
$2,781
$30,904
$7,017
$53,865
1.12
1.20
1.17
$34,499
$8,399
$62,808
396
241
1,238
1.31
1.20
1.24
518
290
1,529
$12,963
$3,156
$23,600
$129,629
$31,559
$236,002
$8,359
1.21
$10,099
315
1.22
384
$698
$6,983
$5,014
1.23
$6,161
134
1.27
170
$2,315
$23,149
29
Bibliography
Cordes Sam , Evert Van der Sluis, Charles Lamphear, Jerry Hoffman (1999). "Rural Health
Research: Rural Hospitals and the Local Economy: A Needed Extension and Refinement of
Existing Empirical Research." The Journal of Rural Health 15(2): 189 - 201.
Doeksen GA , V Schott (2003). "Economic Importance of the Health-Care Sector in a Rural
Economy." The International Electronic Journal of Rural and Remote Health Research,
Education, Practice and Policy.
Ohio University's Voinovich School of Leadership and Public Affairs (2008). The Economic
Impact of the Health Sector in Rural Ohio, 2006.
Rephann, Terance J. (2008). The Economic Impact of Agriculture and Forestry on the
Commonwealth of Virginia. Weldon Cooper Center for Public Service, University of Virginia.
30