A new study reveals that Wisconsin hospitals make a significant impact on the state's economy, generating more than $22 billion annually in economic activity and employing more than 100,000 people throughout the state.
The University of Wisconsin-Extension and the Wisconsin Hospital Association are responsible for the study, titled "Healthy Hospitals, Healthy Communities – The Economic Impact of Wisconsin Hospitals."
The study reports that the Wisconsin healthcare sector provides stability and growth and remains less sensitive to economic downturns than other industries.
Equally important is the number of new jobs and the above-average wages that hospitals provide, said Andy Lewis, community development specialist with the Center for Community and Economic Development at the UW-Extension. "In 2006, hospitals were among the top 10 employers in 44 of our 72 counties in Wisconsin, and among the top five employers in 20 counties, “ he said. “Hospitals are an important economic driver in many of our communities."
WHA President Steve Brenton said hospital contributions to local economies are often overlooked in terms of the number of people they employ, the impact of hospital purchases and the impact of employee spending and tax payments.
"This study shows that healthcare is much more to Wisconsin than hospitals, clinics and doctors,” said Brenton. “The ripple effect of the healthcare sector throughout Wisconsin's economy is enormous. Hospitals are not only tied to the health of our communities, but also to the health of our state's economy."
In addition to the workforce that is directly employed by hospitals, the study calculated economic multipliers and estimated that hospitals indirectly account for nearly 90,000 additional jobs in the state because they purchase goods, services and "bricks and mortar" from other businesses in their communities.
With the multiplier effects included, hospitals support more than $22 billion in economic activity, according to Steve Deller, community development economist with UW-Extension.
Funds spent by hospitals to buy goods and services flow to other local and regional businesses and industries and then ripple through the state's entire economy. For example, Deller said hospitals support more than $651 million in retail trade revenues each year in Wisconsin.
The study also estimates that the hospital sector generates more than $923 million in state and local tax revenues, which is largely used to fund state programs.
"We can't overlook the fact that rural hospitals provide an anchor for other healthcare jobs, such as physicians and pharmacists who, in the absence of a hospital, might not be available," said Matthew Kures, GIS specialist at UW-Extension and contributor to the report.
Kures said many of the communities with which UW-Extension works cite their inability to attract and retain college graduates. He said hospitals provide employment for these individuals and help stem the so-called 'brain drain."
According to the study, a strong healthcare network also adds to the attractiveness of a community as a place to live, locate a business or retire.
Rick Klemme, dean and director of cooperative extension, said the study provides additional data that regional and state economic development directors will find useful as they develop strategies to bring new business and create more jobs in Wisconsin.
"To arrive at informed strategies, community leaders need good data about their local economies,” Klemme said. “It is in that tradition that Extension engaged with the Wisconsin Hospital Association in performing an economic impact analysis of Wisconsin hospitals. The study shows in real numbers that hospitals are strong contributors to Wisconsin's economy."