Illinois Hospitals Generate $78.7 Billion Annual Impact on State's Economy

A stable, recession-proof employer; generating more than 422,000 jobs

NAPERVILLE, Ill., Feb. 20, 2012 /PRNewswire-USNewswire/ -- Illinois' 200 hospitals and health systems generate a total annual impact of $78.7 billion on the state's economy, according to a new report released today by the Illinois Hospital Association (IHA). Illinois Hospitals and Health Systems $78.7 Billion State Economic Impact examines the statewide economic impact of Illinois hospitals.

"In addition to providing vital medical and health care services to Illinoisans, Illinois hospitals are absolutely essential for the state's economy as a steady, recession-proof source of excellent, well-paying jobs, providing stability and even growth during difficult economic times," said Illinois Hospital Association President & CEO Maryjane A. Wurth. "Illinois hospitals employ more than a quarter of a million people, resulting in more than 422,500 direct and indirect jobs."

Illinois hospitals are among the top three employers in nearly half of the state's counties. Hospitals provide excellent jobs and substantial benefits for a wide range of workers and spur additional economic activity through their spending on goods, services and capital improvements. They are a key cornerstone of the local and state economy.

Among the report's key findings:

• Jobs: Illinois hospitals employ more than a quarter of a million people and expend $15.4 billion a year on wages and benefits, resulting in a total of 422,575 direct and indirect jobs and an economic impact from hospital payrolls alone of $37.0 billion;
• Illinois hospitals generate a total economic impact to the state of $78.7 billion;
• Illinois hospitals spend $14 billion on goods and services, resulting in $19.5 billion in other spending in the state economy, for a combined impact of $33.5 billion;
• Illinois hospitals also invest in capital improvements, spending $3.4 billion on buildings and equipment, which generated an additional $4.8 billion for a total of $8.2 billion.
• Each Illinois hospital job generates an additional 1.1 Illinois jobs;
• Every dollar spent by Illinois hospitals on goods, services and payroll generates an additional $1.40 in spending throughout the local and state economy;
• In challenging economic times, Illinois' health care sector added 39,400 jobs, a 7% growth between January 2008 and November 2011—while Illinois lost 126,300 jobs.
• The state's economy grew by 52,600 jobs between December 2010 and December 2011.  Nearly one-third of this growth – 16,700 jobs – was created in the health care and education sector.
• The Illinois Health Care/Social Assistance sector is projected to add 149,755 jobs by 2018 – more than any other sector in the state economy.
• During the recent economic downturn, Illinois GDP grew by only 2.8% - with some sectors dropping by up to 20% - while the GDP of health care/social assistance grew by 11.4%. This vast economic activity generated by the health care/social assistance sector makes it the sixth highest contributor to Illinois' GDP, or more than 7% of the gross state product.

The IHA report notes that Illinois hospitals provide enormous benefits to their communities with their charity care and uncompensated care; subsidization of money-losing services such as emergency and trauma care; medical research; education and training of physicians, nurses and other highly-skilled health care professionals; and underpayments for services to Medicare and Medicaid patients that they absorb. 

Overall community benefits provided by the more than 100 Illinois hospitals that file annual community benefit reports is now more than $4.6 billion annually, including nearly $561 million in charity care, an increase in charity care of 124% since 2005.

"Hospitals sustain communities through jobs, community program and medical services to those in need, especially the underserved, regardless of ability to pay," said Wurth. "Imposing Medicaid cuts and property taxes on hospitals would harm one of the few sectors that has been creating jobs and damage the health care system as well. Hospitals would have to consider hiring freezes and layoffs and service reductions or elimination. In dire cases, hospitals will be forced to close, creating 'health care deserts' around the state."

Estimates of the economic impact of Illinois hospitals are based on the Regional Input-Output Modeling System II (RIMS-II) developed by the U.S. Dept. of Commerce, Bureau of Economic Analysis (BEA). The final demand multipliers, obtained from BEA RIMS-II, were applied to the latest available Medicare cost report data of hospital jobs and spending (2010/2011 cost report data) as validated and updated by hospitals.

The IHA report also includes a detailed breakdown on the economic impact of Illinois hospitals by state senate districts and Illinois Congressional districts.

IHA's statewide report is available for viewing and downloading online at:
http://tinyurl.com/7lmhjfn.

The Illinois Hospital Association, with offices in Naperville, Springfield, and Washington, D.C., is an advocate for 200 Illinois hospitals and the patients and communities they serve. For more information about IHA, see the web site, www.ihatoday.org. Like IHA on Facebook. Follow IHA on Twitter.

SOURCE Illinois Hospital Association