Study Shows Hospitals Contribute to Economic Health of Communities | Company
A Harrisburg-based organization recently released the results of a study it conducted on the economic impacts of hospitals on communities in Pennsylvania. And like any crackerjack photographer, Brook Ward anticipated what was to come.
“I’m not surprised by the results,” said Ward, who is more commonly recognized as president and CEO of the Washington Health System. “Because of the importance of health care, the economic impact on our communities is enormous. We are not only taking care to keep the community as healthy as possible, but we are dealing with a significant purely economic impact.
“It affects how many people we can employ and what we can buy, and it also has downstream effects. People employ people in businesses related to us. This is also what I saw in Michigan.
These impacts are impressive, the Hospital & Healthsystem Association of Pennsylvania concluded in its research, “Critical to Communities: Pennsylvania Hospitals’ Economic Impact, Fiscal Year 2021.” HAP, which has also developed a statewide membership service organization that serves 235 hospitals, patients and communities.
HAP found that hospitals are the biggest employer in 18 of Pennsylvania’s 67 counties, including Washington and Allegheny. It also indicates that 59 counties have at least one hospital among the top 10 employers; that among all industries, hospitals rank fifth in employment; and that hospital jobs pay, on average, about 6% more than the average for all industries.
The organization said Commonwealth hospitals have a $168 billion economic impact, support 590,000 jobs, generate $38 billion in wages and benefits, and provide $866 million in unpaid care.
According to HAP, hospitals in a 10-county region of southwestern Pennsylvania have a $20 billion impact, provide 103,000 jobs and pay $5 billion in salaries. This area includes Washington, Greene, Fayette and Westmoreland continues.
Washington Hospital, according to the state Department of Labor and Industry, was Washington County’s largest employer in the first quarter of 2022. Ward estimated that WHS had approximately 3,000 employees and contractors in more of 40 establishments.
“We care about the people of Washington and Greene counties,” he said, “but also West Virginia, eastern Ohio, and Beaver, Westmoreland, and Fayette counties.”
WHS is one of four health systems operating in Washington County, along with Penn Highlands Healthcare Mon Valley, Allegheny Health Network’s Canonsburg Hospital, and Advanced Surgical Hospital.
Referring to those facilities in particular, Jeff Kotula, president of the Washington County Chamber of Commerce, said he was also not surprised by the HAP’s findings. He said in a text message: “Not only do they provide quality health care, but they provide our residents with a high level of service close to home.
“In addition, the facilities are important economic drivers, supporting thousands of local jobs and supporting local businesses through vendors and other relationships.”
This study is full of positives, however, emerged against the backdrop of soaring inflation, recession speculation, the Great Resignation and the effects of the Russian-Ukrainian war.
“It’s a tough time economically for hospitals,” Ward said. “Our business is very labor intensive because the healthcare profession needs people who care for others with their hearts, minds and skills. But because wages are rising at a faster than normal rate, it’s hurting hospitals’ bottom line.
“The federal government sets the reimbursement rate, so we cannot update it. We got a 2.1% raise, but that was at a time when inflation was 9%.
Penn Highlands chief operating officer Mark Norman said the government pays us “2% a year on average, but this increase is not keeping up with inflation. This is impacting hospitals across the state and nation.
Nor was Norman surprised by the PAH findings. “The impacts are significant for us and across the state,” he said. “We seek to provide high quality and safe care to all of our communities, while delivering real economic benefits.
Its DuBois-based system, which acquired Monongahela Valley Hospital in October 2021, has eight hospitals “in truly rural markets where they’re among the top two or three employers.” Highlands Hospital in Connellsville is part of the network.
Penn Highlands, which Norman says employs about 7,000 people, is building a ninth hospital at State College. It has more than 150 health-related facilities, including nursing and personal care homes.
He said Penn Highlands’ financial impact in fiscal year 2021 was $1.7 billion. The ripple effect included “employment of people, construction projects, purchase of medical and office supplies, other equipment and furnishings.”
Norman also cited a training and education program for doctors. “Physician recruitment is a key driver of our economic impact,” he said.
Lindsay Meucci agrees that hospitals and health systems “play a central role in the economic health of the community, through employment and spending within the community.”
Meucci is vice president of marketing, communications and advocacy for St. Clair Health. She said the Mount Lebanon-based provider, which has three outpatient sites among its facilities, is “the largest employer in the South Hills, with 2,500 employees and 600 doctors.” (Not all physicians are full-time employees.)
“What not everyone realizes is the ripple effect we have on the economy,” Meucci said. “Many of our employees and doctors live in the community, where their children go to school. They give back indirectly.
Meucci acknowledged that the healthcare industry has faced an uncertain economy, but is trying to serve.
“I think hospitals are not immune to feeling changes in the economy,” she said. “It is more important than ever to take care of the community. The pandemic has allowed us to be there for the community, offering vaccination clinics and other unpaid care.
The Service Employees International Union, which is often involved in labor issues related to health care, also weighed in on the study.
Matthew Yarnell, president of SEIU Healthcare Pennsylvania, said in an email: “Healthcare workers are among the most dedicated and hardworking members of our society and they have an overwhelmingly positive impact on the communities in which they live. live and work. But not all of these workers are treated the same or paid fairly.
“While the HAP report correctly identifies the enormous impact of hospitals and health care systems on our communities here in Pennsylvania, one crucial factor is missing that should be part of the conversation – that health care workers who have formed a union are paid more than their non-union counterparts and have more say in their working conditions and the staffing of their facilities.
“A June report from the U.S. House of Representatives and Senate committees noted that nationally unionized workers earn more than 10% more wages than nonunion workers. And while some health systems can create jobs to support families in the communities they serve, others pay health care workers poverty wages and… fight against worker organizing .
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