A hospital's value to the community and the commonwealth continues to rise.
From 2011 to 2012, the economic impact of hospitals across Pennsylvania rose $6 billion to nearly $104 billion, according to the latest figures from The Hospital & Healthsystem Association of Pennsylvania.
Based on federal data, HAP found that Pennsylvania hospitals directly employed nearly 272,000 people, with a payroll of $14.6 billion. The direct economic impact was $45 billion in 2012.
Business and household spending of hospitals and their employees supported an additional 320,000 jobs and nearly $12.9 billion in salaries and wages. That ripple effect — every dollar directly spent by hospitals results in an additional $1.23 spent in other parts of the economy — led to $58.8 billion of indirect economic impact, according to HAP.
Hospitals are among the top five employers in 55 of the 67 counties in Pennsylvania.
Additionally, HAP reported that nonprofit hospitals provided more than $5.8 billion in charitable community benefits, including more than $1 billion in unpaid patient bills and nearly $2.3 billion to subsidize care for Medicare and Medicaid beneficiaries.
Investor-owned hospitals also provide these benefits, but data is not publicly reported in a uniform way to provide a comparison, according to HAP.
Andy Carter, HAP’s president and CEO, cautioned that the significant economic benefits hospitals have provided should not be assumed going forward.
“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,” he said.
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,” he said. “The Affordable Care Act included $8.1 billion in cuts to Pennsylvania hospitals’ Medicare and Medicaid payments over 10 years. In addition, Pennsylvania’s hospitals are absorbing an additional $1.4 billion in Medicare cuts as a result of the federal sequestration cuts.”