Economic Impact Report

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 that are among the largest employers in their communities and for the state as a whole.

$5 Billion Impact

Iowa has 118 community hospitals, two VA hospitals, two rehabilitation hospitals, one behavioral health hospital 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 76,000 jobs that pay more than $5 billion in salaries and benefits. 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

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. This means that, in total, more than 143,000 jobs are tied to Iowa hospitals, creating an overall impact that is worth nearly $8.6 billion to Iowa's economy.

Supporting Their Communities

With payrolls exceeding 76,000 employees and $5 billion, Iowa hospitals have a tremendous impact on their local businesses and communities. Retail sales generated by hospitals and their employees amount to more than $2 billion, according to IHA's study. In turn, that retail activity generates sales tax, a major revenue source for government, exceeding $126 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 also have significant impact. For example, health care practitioners, such as physicians and dentists, directly and indirectly provide more than 84,000 jobs with an economic impact of nearly $6 billion. Similarly, nursing homes and other residential care providers include more than 79,000 jobs and add more than $3 billion to the economy. Because of the "multiplier" effect, the IHA study found that health care in Iowa provides more than 344,495 or 22% of total non-farm employment. In terms of economic impact, Iowa's health care industry is worth more than $19 billion.

Questions regarding the IHA Economic Impact Report can be directed to Allison Martin.

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