PA Hospitals’ Economic Contributions Reach Nearly $104 Billion

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The Hospital & Healthsystem Association of Pennsylvania (HAP) today released its newest numbers on the fiscal and individual impact of Pennsylvania’s hospitals on communities across the state, as well as on the state as a whole.

All hospitals—nonprofit and investor-owned combined—contributed nearly $104 billion to local and state economies, an increase of almost $6 billion between 2011 and 2012. Pennsylvania’s non-profit hospitals provided more than $5.8 billion in charitable community benefits. (Pennsylvania’s investor-owned hospitals also provide charitable community benefits; however, they are not tabulated and publicly reported in a uniform way that could be captured for this public release.)

 “Pennsylvania’s hospitals and health systems are going through significant transitions as they redesign care delivery to focus on improving patient quality and satisfaction, improve community health, and reduce per capita cost,” said HAP President and CEO Andy Carter.

“Even during these transitions, they remain solid economic assets and major employers, because they provide critical services driven by personal relationships that will always be community-driven.”

The nearly $104 billion in economic impact––$45 billion directly and $58.8 billion indirectly––includes the support of more than 592,000 jobs—about one in ten jobs in Pennsylvania. Hospitals employ nearly 272,000 employees directly, and create another 320,000 spin-off jobs. Every dollar directly spent by hospitals results in an additional $1.23 spent in other parts of the economy through additional investments, resource utilization, and purchasing power.

The $5.8 billion in charitable community benefits included more than $1 billion in unpaid patient bills; nearly $2.3 billion to subsidize care for Medicare and Medicaid beneficiaries; more than $428 million in financial assistance and charity care; more than  $262 million in subsidized health services; nearly $135 million in community health improvement services and programs in response to the health needs of their communities; more than $674 million in hospital-based education programs to train highly skilled health care professionals; more than $935 million in research to cure illnesses and advance medical treatments and services; and nearly $14 million in contributions and community-building activities.

Carter cautioned that the significant economic benefits hospitals have continued to provide, even during turbulent economic times, should not be assumed going forward.

By example, he explained that hospitals have been taking steps more recently to address fiscal pressures through layoffs, hiring freezes, cuts to services, and cancellation of projects.

“These actions are in response to ongoing federal payment cuts and the absence of Medicaid expansion in the Commonwealth. The Affordable Care Act included $8.1 billion in cuts to Pennsylvania hospitals’ Medicare and Medicaid payments over ten years. In addition, Pennsylvania’s hospitals are absorbing an additional $1.4 billion in Medicare cuts as a result of the federal sequestration cuts.

 “If the state and federal government continue to turn to hospitals to fill budget shortfalls and pay for other programs, we will see more layoffs and service reductions. Hospitals can’t make the delivery system changes that are needed and remain viable economic drivers if their payments are cut again and again.

“To effectively map out and implement the strategies needed to meet health care needs in the future, hospitals must make plans today. This requires fiscal stability and predictability, which in turn spurs the economic contributions and job creation and retention on which Pennsylvania communities and the state rely.”

Carter added that Pennsylvania’s hospitals remain hopeful that Governor Corbett and the federal government will reach agreement on approving the Healthy PA plan to give low-income, uninsured Pennsylvanians access to affordable health coverage.

In 2012, Pennsylvania’s hospitals cared for patients during 1.6 million hospital admissions; 39 million visits in outpatient settings; 6 million emergency department visits; and delivered more than 125,000 babies.

HAP is a statewide membership services organization that advocates for nearly 240 Pennsylvania acute and specialty care, primary care, subacute care, long-term care, home health, and hospice providers, as well as the patients and communities they serve. Additional information about HAP is available online at www.haponline.org.

Additional resources:

HAP Fact Sheet – The Economic Impact of Pennsylvania Hospitals: 

https://www.haponline.org/Portals/0/docs/Reports-FactSheets/HAP_Facts_Economic_Impact_of_PA_Hospitals_May2014.pdf

HAP Fact Sheet – Pennsylvania Hospital Community Benefit:

https://www.haponline.org/Portals/0/docs/Reports-FactSheets/HAP_Facts_PA_Hospital_Community_Benefit_May2014.pdf