Georgia Health Sciences University and Health System has a nearly $2 billion economic impact on the local economy, according to the latest reports.
A Georgia Hospital Association study released in May reported that Georgia Health Sciences Medical Center pumped $1.04 billion into the local economy in fiscal year 2010, up $26 million from 2009 for the not-for-profit health system. Additionally, GHSU’s academic and research initiatives generated more than $832 million locally, according to a 2010 University System of Georgia report, for a combined impact of $1.9 billion.
“An academic health center is a powerful economic engine. As we fulfill our tripartite mission of education, research and health care delivery, the Georgia Health Sciences enterprise makes a tremendous impact on Georgia's bottom line," said GHSU President Ricardo Azziz. “As a medical destination, we provide our community and the Southeast with access to quality health care, including some of the nation’s top physicians. What’s more, we train future health care leaders and produce cutting-edge research that will lead to better care tomorrow.”
Azziz also pointed out that the two reports do not include an assessment of the economic activities of Georgia Health Sciences Medical Associates, the faculty practice group aligned with the enterprise, which he estimated to be another $100 million to $200 million in economic impact annually.
The Selig Center study showed that the University System of Georgia’s 35 institutions made a $12.6 billion total impact on the state’s economy in 2010, and that, on average, for every dollar of initial spending in a community by a university system institution, an additional 38 cents was generated for the local economy.
Seventy-eight percent, or $650 million of GHSU’s nearly $832 million total impact, reflects initial spending for salaries and benefits, operating expenses and student spending. Re-spending – the multiplier effect of those dollars as they are spent again in the region – accounted for the remaining $182 million, a very conservative estimate of the impact of re-spending, which more often approximates a doubling of the initial spending.
The total economic impact of hospitals to Georgia’s bottom line in 2010 was $38 billion, according to GHA. Augusta-area hospitals generated nearly $2.6 billion, with GHS Medical Center’s contribution accounting for 41 percent of that total.
The GHA report revealed direct expenditures of $453 million for GHS Medical Center; however, when combined with an economic multiplier developed by the U.S. Department of Commerce’s Bureau of Economic Analysis, the total economic impact of the hospital was $1,048,026,428. This value takes into account the trickle-down effect of hospital expenditures on other sectors of the economy, such as medical suppliers, durable medical equipment and pharmaceuticals.
Using a household earnings multiplier, the GHA report determined that GHS Medical Center generated more than $417 million in household earnings in the local and state economies. The household earnings formula measures the increased economic contributions from households employed directly or indirectly by the medical center.
Based on data from both reports, the GHS enterprise sustained more than 17,250 jobs in 2010.
As a health care provider, GHS Medical Center helps meet the needs of uninsured and low-income populations. In 2010, GHS provided 42 percent, or approximately $37 million of the $88 million in uncompensated care in the Augusta area, the GHA reported.
“These figures are a key indicator of the generous community benefit our health system delivers,” Azziz said.
To learn more about the Georgia Health Sciences economic impact, read GHSU President Ricardo Azziz’s latest blog post Calculating Economic Impact: Not So Simple.
The 478-bed Georgia Health Sciences Medical Center is operated by the Georgia Health Sciences Health System, a not-for-profit corporation. The health system also includes a Critical Care Center, housing the region’s only Level I trauma center; the 154-bed Children’s Medical Center, providing the highest level of pediatric critical care and neonatal intensive care; and more than 80 outpatient clinics that provide primary and specialty care inside the Medical Office Building.
The Georgia Health Sciences University includes the Medical College of Georgia and the Colleges of Allied Health Sciences, Dental Medicine, Graduate Studies, and Nursing. GHSU is a unit of the University System of Georgia and an equal opportunity institution.