Georgia hospitals contribute billions to state’s economy

Published 4:16am Friday, August 16, 2013

Special to The Post-Searchlight

Even in uncertain economic times, Georgia hospitals gave the state’s economy a massive $38.6 billion boost in 2011, according to a new report commissioned by the Georgia Hospital Association (GHA), the state’s largest hospital trade association. The report also revealed that, as nearly 10 percent of Georgia workers remained unemployed two years ago, Georgia hospitals employed more than 124,000 workers and indirectly created more than 283,000 full-time jobs in the state.

“In lean economic times, hundreds of thousands of Georgia families can rely on their local, community hospitals not only for excellent around-the-clock medical care, but for economic stability,” said GHA President Earl Rogers. “We’re proud of the fact that, in many communities throughout Georgia, hospitals are among the largest employers and are the source of many well-paying jobs close to home.”

Despite these important economic contributions, the Georgia hospital community continued to face major financial challenges caused by, among other things, a rising uninsured population in the state and an unsteady health care insurance market that has resulted in escalating premiums and deductibles for people with job-based insurance. In 2011, Georgia hospitals provided more than $1.57 billion in uncompensated care, an increase of more than $65 million from the previous year.

“When you combine the uncompensated care burden with continued reductions in Medicare and Medicaid payments to hospitals, there are several hospitals in the state facing great difficulty staying financially viable,” said Rogers.

In fact, according to the most recent Georgia Department of Community Health Hospital Financial Survey, 38 percent of all hospitals in the state had a negative operating margin in 2011. Among Georgia’s rural hospitals, 55 percent lost money. Earlier this year, two rural Georgia hospitals, Stewart Webster Hospital in Richland and Calhoun Memorial Hospital in Arlington, were forced to close due to financial reasons.

While no one is certain how the Jan. 1, 2014 implementation of the Patient Protection and Affordable Care Act (ACA) will affect America’s hospitals, what is assured is that hospitals nationwide will be facing Medicare payment cuts of $155 billion over a 10-year period. In Georgia, those cuts will sting much worse than many states because it is among several that have not accepted Medicaid expansion under ACA.

“If everything remains the same, the federal ACA will force significant payment cuts on Georgia hospitals even though hundreds of thousands of otherwise eligible Georgians will not have health care coverage,” Rogers said. “We will continue to work with the state to come up with a solution that is best for Georgia residents and our state’s health care delivery system.”

The report shows that the mere presence of a hospital is a major source of jobs in any given community. As the state’s unemployment rate continued to exceed the national average in 2011, the Georgia hospital workforce accounted for more than 124,000 full and part-time jobs in Georgia. When an employment multiplier is applied to this number, it reveals that hospitals supported over 283,000 full-time jobs in the state. The employment multiplier considers the “ripple” effect of direct hospital expenditures on the economy such as medical supplies, durable medical equipment and pharmaceuticals.

“When government reduces Medicare and Medicaid payments to hospitals, access to health care services is at risk and critical jobs are placed in jeopardy,” Rogers added. “With this report, we hope to reinforce the fact that local, community hospitals are an indispensable part of Georgia’s economy.”

The hospital economic impact report also measures hospitals’ direct economic contributions to Georgia’s working families. Using a household earnings multiplier, the study determined that hospitals generate nearly $15.2 billion in household earning in the state. The household earnings multiplier measures the increased economic contributions from households employed directly or indirectly by hospitals through daily living expenditures.

 

About GHA

Established in 1929, GHA is the state’s largest trade organization of hospitals and health systems providing education, research and risk management services to its 174 hospital and health system members. Additionally, it represents and advocates health policy issues benefiting Georgia’s citizens before the state legislature and U.S. Congress as well as before regulatory bodies.

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