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Report lists hospital's economic impact at $47 million

McDuffie Regional Medical Center contributed more than $47 million - including $15.7 million in direct spending - to the local economy in 2002, according to recent report by the Georgia Hospital Association.

"McDuffie Regional Medical Center has an enormous positive financial impact on the local economy which creates an unbelievable amount of stress on the hospital's leadership," said hospital CEO Doug Keir. "We are pleased to be able to currently support the economic viability of our region and improve the lives of hundreds of citizens in the communities we serve."

Across Georgia, hospitals contributed $23.9 billion to the economy, including $10.6 billion in direct expenditures, according to the report.

Officials arrived at the total contribution numbers using an output multiplier developed by the United States Department of Commerce's Bureau of Economic Analysis. The output multiplier considers the "ripple" effect of direct hospital expenditures on other sectors of the economy, such as medical suppliers, durable medical equipment, and pharmaceuticals. Economic multipliers are used to model the resulting impact of a change in autonomous spending in one industry on the "circular flow" of spending within an economy as a whole.

The report also measured the effect of a household earnings multiplier, which adds over $11.9 million to the local economy through McDuffie Regional Medical Center. As a whole, the Georgia hospital industry had an $8.1 billion impact in household earnings to the state's economy, bringing the total statewide impact to $32 billion. The household earnings multiplier measures the increased economic contributions from households employed directly or indirectly by hospitals through daily living expenditures.

The study also found that hospitals and health systems directly employ more than 130,000 people in the state and have a payroll that exceeds $3 billion annually.

McDuffie Regional Medical Center employs 300 people. Indirectly, more than 322,000 full-time jobs are sustained through Georgia hospitals from ancillary health services that contract with or provide services to these facilities, such as accountants, food suppliers, and medical equipment suppliers.

"In many communities, hospitals are the largest employers and most signifi cant creators and sustainers of jobs and income," said GHA President Joseph A. Parker.

With more than 50 percent of Georgia's acute care hospitals currently losing money in providing care, Mr. Parker called for increased support for Georgia's local hospitals.

"If health care policies do not support indigent care, if purchasers such as Medicaid, Medicare and managed care organizations continue to reduce payments, and if local communities do not fi nancially support services provided to residents, then some hospitals may be forced to shut their doors," Mr. Parker said.

Mr. Keir echoed that call for help, citing the need for increased federal, state, and local financial support of hospitals and health systems if MRMC is to continue providing healthcare services. "In 2002, McDuffi e Regional Medical Center provided $1.6 million in uncompensated care, which includes indigent care, charity care, other free care and bad debt write-offs," he said.

Web posted on Thursday, August 5, 2004

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