The Economic Contribution of Missouri’s Hospitals
Hospitals are one of the strongest segments of Missouri’s communities during this current economic slowdown.
Every year, tens of thousands of dedicated health care workers provide vital health care services to millions of Missourians. In 2007, Missouri’s hospitals were the site of 80,500 newborn deliveries, nearly 18 million outpatient procedures, 584,000 surgeries and 2.5 million visits to emergency departments.
During times of economic slowdown, it is more important than ever to maintain support for those employers that are still hiring workers and keeping local economies alive.
Sustaining Job Growth
Although some hospitals are experiencing layoffs, Missouri’s hospitals added 300 jobs in January 2009 and have added 1,500 jobs since January 2008. When compared to two other large sectors — manufacturing employment fell by 8,500 and retail employment fell by 12,500 in January — health care clearly is playing a leading role in supporting Missouri communities.
Missouri’s hospitals employ 133,072 full- and part-time employees — 4.5 percent of Missouri’s total employment. Hospitals’ payroll and benefts totaled $7.2 billion in 2007.
The Ripple Effect
Every hospital job in Missouri supports two more. And, when hospital payroll is multiplied* to reflect its true effect on the economy, it has an additional economic benefit of $5.9 billion — a total of $13.1 billion for Missouri’s hospital payroll alone.
The $15.9 billion worth of goods and services purchased by Missouri hospitals has a similar effect, with a total economic impact* of $36.7 billion.
When hospitals must cut back, it also affects other sectors of the economy. This may best be illustrated by examining hospital construction. Missouri hospitals spent $7 billion on building and improvements in 2007. However, because of recent difficulty in accessing financing for capital improvements, 33 percent of Missouri’s hospitals have deferred investment in new projects while 53 percent have deferred investment in general maintenance and repairs.
Missouri’s construction industry lost 11,000 jobs in January alone — 1,600 of those from building construction. Workers for building construction earn $2 more per hour than others in the trade. Many of these men and women depend on capital investments from hospitals and other large businesses. However, 38 percent of Missouri hospitals say they are planning to defer new projects and/or maintenance. This will further weaken construction and other related industries.
What’s good for Missouri hospitals is good for Missouri.
Each of the following documents illustrates the impact of hospital employment, payroll and benefits, and expenditures by workforce investment region. It also lists hospitals in the region.
The maps on these documents show the effects of hospital jobs on total jobs in the state's economy, effects of payroll and benefits on total labor income for Missouri and the effects of hospital expenditures on total output in the state's economy.
Note
*The “multiplier” is the factor by which spending in one sector of the economy affects other sectors. For example, in Missouri, each hospital job results in a total of 2.1314 jobs in the economy as a whole because hospital employees use their wages to purchase goods and services, which creates income and jobs for other businesses. The multiplier is 1.8270 for payroll and benefits and 2.3078 for hospital expenditures for other goods and services.
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