Wednesday, May 30, 2001

Hospitals important to state's economy

Georgia hospitals contributed more than $26 billion to the state's economy in 1999, according to a recent report prepared by the Georgia Hospital Association.

Hospitals also helped sustain 264,959 full-time jobs in Georgia during the same year.

The report, which was based on a study prepared by the Economic Forecasting Center at Georgia State University, revealed that Georgia hospitals had direct expenditures of more than $8.7 billion in 1999 an increase from $8.3 billion in 1998. When combined with an economic multiplier developed by the United States Department of Commerce's Bureau of Economic Analysis, the total economic impact of those expenditures was $26.3 billion.

This output multiplier considers the "ripple" effect of direct hospital expenditures on other sectors of the economy, such as medical supplies, durable medical equipment and pharmaceuticals. Economic multipliers are used to model the resulting impact of a change in autonomous spending in one industry on the "circular flow" of spending within an economy as a whole.

"Hospitals' missions are to improve the health and well-being of communities, but few realize that in many areas throughout Georgia, hospitals are also the foundation of the economic health of a community," said GHA President Joseph A. Parker.

The report also measures hospitals' direct economic contribution to Georgia's working families. Using a "household earnings multiplier," the study determines that hospitals generate more than $6.6 billion in household earnings in the state. The household earning multiplier measures the increased economic contributions from households employed directly or indirectly by hospitals through daily living expenditures.