ATLANTA — Georgia hospitals have played a significant role in Georgia’s economic recovery, pumping $43.6 billion into the state’s economy in 2014, according to a recently released study by the Georgia Hospital Association (GHA). The report also revealed that hospitals supplied more than 160,000 full- and part-time jobs and indirectly created more than 364,000 full-time jobs in Georgia.
“We already know how important Georgia hospitals are to providing life-saving health care services to our family and friends; this study demonstrates how integral hospitals are to our state’s economic well-being,” said GHA President and CEO Earl Rogers. “Hospitals are a tremendous source of well-paying jobs close to home and pave the way for so many other businesses to locate to nearby areas. Simply put, the environment for a successful business climate in each community is bolstered by a healthy workforce and a strong, vibrant community hospital.”
Despite their major economic contributions, Georgia hospitals continue to face unprecedented financial challenges. Since the beginning of 2013, five Georgia hospitals have closed, and others — especially those in rural areas — are struggling to keep their doors open. According to the 2013 Georgia Department of Community Health Hospital Financial Survey, 57 percent of all rural hospitals in Georgia had negative total margins, while more than four out of 10 of all Georgia hospitals lost money in the same year. A huge strain on hospital finances continues to be the explosive growth of uncompensated care. According to the GHA study, Georgia hospitals provided nearly $1.75 billion in unpaid care in 2014, a 9.4 percent increase from 2012.
“Georgia’s economic recovery hasn’t made a difference for hospitals in terms of uncompensated care,” said Rogers. “We still have hundreds of thousands of Georgians who have no health care insurance and their only access to health care services is the hospital emergency room. For hospitals, that’s a recipe for disaster.”
According to a recent study by the Kaiser Commission on Medicaid and the Uninsured, 17.5 percent of all Georgians remain uninsured. Only two other states — Texas (18.8 percent) and Oklahoma (18.1 percent) — have a higher percentage of uninsured residents. In Georgia, more than one out of every three patients who seek care in a hospital are either uninsured or have Medicaid. To make matters worse, Medicaid pays Georgia hospitals, on average, only about 87 percent of costs, meaning hospitals lose 13 cents on every dollar spent treating a Medicaid recipient.
“There’s not a business in any industry that can survive long term when such a significant part of its customer base either cannot pay or pays below cost for a product or service,” Rogers added. “To protect our local, community hospitals which are so critical to our state’s physical and economic health, the provider community is currently engaging in an effort to ensure that hospitals in the state are adequately paid for the services they provide.”
The report also shows that the presence of a hospital is a major source for jobs in any given community, both directly and indirectly. In 2014, Georgia hospitals employed 160,143 people. But when an employment multiplier is applied to that number, it indicates that hospitals supported more than 364,000 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 a community hospital closes, residents there not only lose nearby access to life-saving medical services, they lose many well-paying jobs that contribute significantly to the economy and the tax base in that area,” Rogers explained. “These are jobs that are indispensable to a community.”
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 over $13.7 billion in household earnings in the state. The household earnings multiplier measures the increased economic contributions from individuals employed directly or indirectly by hospitals through daily living expenditures.