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Research: Hospitals add to economic well-being, too

Hospitals contributed nearly $19 billion to the Colorado economy and directly employed almost 72,000 people in 2010, according to the results of a study analyzing the health care sector in the state.

“Hospitals are important to all aspects of health, whether we’re referring to the physical health of our family, friends and neighbors or the economic health of the community,” said Steven Summer, president and chief executive officer of the Colorado Hospital Association (CHA). “This study shows that hospitals’ impact on local communities is so much more than just providing care — it’s also about providing job growth and economic stability statewide.”

Two Colorado State University  economists conducted the study for the CHA, an advocacy group representing 95 member hospitals and health systems in the state.

The study found that the 108 hospitals and health care systems in Colorado accounted in 2010 for a total of $9.8 billion of gross state product, the broad measure of all goods and services produced in the state.

Counting both direct and indirect contributions, hospitals generated a total of $18.8 billion. That calculation includes what the report terms nearly $9 billion in “spinoff” contributions through purchases made by hospitals and their employees.

The total economic contributions of hospitals constituted 4.2 percent of the overall economic output of the state in 2010.

In addition to calculating statewide totals, the study examined the economic effects of Colorado within each of seven regions corresponding with congressional districts.

In the Third District — which encompasses much of Western Colorado and includes Mesa County — 28 hospitals and health care systems generated more than $1.6 billion in direct contributions and another $871 million in spinoff contributions.

The study found that general medical and surgical hospitals in Colorado employed a total of 71,700 people in 2010, an increase of more than 15 percent since 2005.

While the state lost more than 123,000 jobs between 2007 and 2010 in the aftermath of the recession, hospitals added 4,935 jobs.

Considering spinoff effects, spending by hospitals and their employees helped create another 61,400 jobs.

Direct and indirect employment totalled 131,100, jobs that paid an average annual salary of more than $55,700.

In the Third District, hospitals directly employed 12,600 people and helped create an additional 6,900 jobs.

The Business Times has served as the definitive source for Grand Junction business news since 1994. The journal offers news, views and advice you can use twice each month in print with daily updates online at www.TheBusinessTimes.com
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