The IHA Hospital Economic Impact Report

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Iowa's Community Hospitals
An Irreplaceable Asset

A hospital is an asset to any community or region. It provides communities with easy access to the broad spectrum of essential health care services - primary care, surgery, laboratory services, emergency care, mental health services, hospice and technology like PET scanning and magnetic resonance imaging.

Community hospitals also offer community benefits in the form of charity care and free and reduced-cost services like immunizations, health screenings, and counseling. Many of these programs and services simply would not exist without hospital resources and leadership. Hospitals as health care providers are clearly irreplaceable. But hospitals are also essential in another way - as economic engines.

$5.7 Billion Impact

Iowa has 117 community hospitals, and they create an enormous economic impact across the state. Hospitals not only provide jobs, they create jobs by purchasing goods and services from other businesses. And hospitals are essential to local and statewide economic development - companies that want to relocate or expand demand access to comprehensive, high-quality health care services. According to a study by the Iowa Hospital Association (IHA), Iowa hospitals provide more than 71,000 jobs that pay more than $3.2 billion in salaries and benefits. This makes hospitals the ninth largest non-agricultural employer in Iowa. No wonder most Iowa hospitals are among the largest employers in their counties.

And these are not ordinary jobs. Most hospital employees are highly skilled and well-paid professionals who not only carry college and post-graduate degrees, but regularly update their skills through continuing education.

Multiplying the Benefit

But the economic impact of hospitals extends beyond the people they hire and the salaries that are paid. The business and household needs of hospitals and their employees creates a "multiplier" effect that supports thousands of additional jobs. In fact, the IHA study found that for each job provided by Iowa hospitals, 1.78 additional jobs are created. This means that, in total, more than 154,000 jobs are tied to Iowa hospitals, creating an overall impact that is worth more than $5.7 billion to Iowa's economy.

Supporting Their Communities

With payrolls exceeding 71,000 employees and $3.2 billion, Iowa hospitals have a tremendous impact on their local businesses and communities. Retail sales generated by hospitals and their employees equal nearly $1.8 billion dollars, according to IHA's study. In turn, that retail activity generates sales tax, a major revenue source for government, worth $85 million.

A Healthy Health Care Industry

The IHA study also examined the economic impact of other sectors in the state's health care industry, including nursing homes and residential care, pharmacies, ambulatory health care services, home health care services, and physicians, dentists and other health practitioners.

While hospitals are by far the greatest economic contributor to Iowa's health care industry, these other sectors have significant impact. For example, health care practitioners, such as physicians and dentists, directly and indirectly provide more than 79,000 jobs with an economic impact of nearly $4 billion. Similarly, nursing homes and other residential care providers create more than 95,000 jobs and add $2.4 billion to the economy. Because of the "multiplier" effect, the IHA study found that health care in Iowa provides 375,000 jobs, or about one-fifth of Iowa's total non-farm work force. In terms of economic impact, Iowa's health care industry is worth $13.8 billion.

Hospitals: An Economic Priority

Each year, Iowans invest in their hospitals. They recognize community-based healthcare as a statewide priority and support hospitals through millions of dollars in personal donations and thousands of hours in volunteer time. Iowa leaders both in the state Legislature and in Congress should share that priority. To expand and attract business, keep young people and families in our state, and ensure the future of communities both small and large, hospitals must be a central part of our leaders' economic plans. Simply put, with more than 154,000 jobs and $5.7 billion at stake, the health of Iowans and the health of their state's economy depend on hospitals.