Virginia’s hospitals and health systems provided more than $2.2 billion in community support, accounted for $27.7 billion in economic activity and employed 129,000 individuals in the Commonwealth in 2010, according to a statewide report recently released by the Virginia Hospital & Healthcare Association.
The fourth-annual report, "The Impact of Virginia Hospitals and Health Systems on their Communities," shows that community support, as defined by the Internal Revenue Service, grew by $200 million, economic impact increased by $2.7 billion and the number of individuals employed in their facilities grew by more than 7,000 when compared to 2009 data.
[See also: Community benefit under fire]
Other key findings include:
• The amount of community benefit provided by Virginia’s tax-exempt hospitals exceeds the value of the tax exemptions they receive by more than $531 million.
• The $27.7 billion in economic activity includes $14.8 billion in direct spending, which generated an additional $12.9 billion in indirect spending by other businesses and individuals.
• The salaries and services for the 129,000 employees in VHHA member hospitals, ambulatory care centers and nursing homes supported another 64,000 jobs across the state.
“Virginia’s hospitals and health systems provide high quality, valuable and necessary healthcare services to their communities 24/7, 365 days a year,” said Laurens Sartoris, president of the Virginia Hospital & Healthcare Association, in a press release. “While they are vital to the physical wellbeing of their communities, this report highlights the value of the other assets they bring to their communities.”
The report data is based on hospital costs, not charges and includes all acute-care and certain specialty hospitals in the state. “Community benefit” was defined using the Internal Revenue Service definition for Schedule H of Form 990. For Virginia this represents:
[See also: Report examines state-by-state healthcare funding]
• Charity Care: $515 million, an increase of $24 million over 2009
• Medicaid Shortfall: $318 million, an increase of $113 million over 2009
• Subsidized Health Services: $71 million, an increase of $13 million over 2009
• Community Benefit Programs and Services: $312 million, an increase of $49 million over 2009.
“I think it’s significant that if you look at the study, the Medicaid shortfall grew by 55 percent in 2010,” said Betty Long, vice president of the Virginia Hospital & Healthcare Association. “This is due to a decline in state reimbursement along with an increasing need for Medicaid during an economic downturn.”
The healthcare and social services industry represents 12 percent of statewide employment. Additionally, healthcare accounts for at least five percent of the jobs in each locality in Virginia, and in some areas it accounts for as much as one-third of all jobs.
“This is an initiative we’ve been working on for a long time – a consistent way for us to quantify the amount of community benefit we provide using the methodology of the IRS. Our hospitals have always had an interest in providing for the community, but we’re getting better at documenting this,” said Long. “I think this study is an indication of the association’s commitment to its communities.”
The economic impact is measured through the dollars spent on payroll, other operating expenses and capital projects, all of which are re-circulated in the economy through consumer spending, purchases by suppliers and contractors and other forms of economic activity.