News Release

UPMC NORTHWEST IS A MAJOR ECONOMIC FORCE, REPORT SAYS
Hospital jobs, wages, spending create a $102 million benefit for region

Nov. 9, 2004 — UPMC Northwest has an impact of more than $100 million on the region’s economy, thanks to more than 880 jobs that it provides and other economic benefits that it generates.

The combination of the hospital’s employment, wages, and other spending – plus a secondary or “ripple” effect from additional spending that UPMC Northwest produces in the community – yields a total economic benefit of $102 million for the area, according to a report released by the Hospital & Healthsystem Association of Pennsylvania (HAP).

The report titled Beyond Health Care – Pennsylvania Hospitals: Key Assets to the State’s Economy says UPMC Northwest and other hospitals are major economic forces in their communities, and that they should be a key component of Pennsylvania’s long-term economic strategies.

“We’re important to our community not only because we provide health care, but because we also provide jobs, pay salaries, and buy products and services from many other businesses in the area,” says UPMC Northwest president Neil Todhunter. “It’s clear from this report that we make a sizable economic contribution, and so do other hospitals.”

HAP president and chief executive officer Carolyn Scanlan concurs and says UPMC Northwest and other hospitals statewide are “economic catalysts” that also contribute to state and local tax bases.

UPMC Northwest employs 887 people and supports the existence of almost 450 more jobs in the region, according to the report, which describes hospitals as “an integral part of the economic activity in the communities they call home.”

The hospital pays almost $27 million in salaries every year, and the additional jobs it generates pay another $11.7 million in wages annually to area residents, the report indicates.

The report also says that UPMC Northwest – Venango County’s second largest employer – spends more than $60 million a year and produces a secondary or “ripple” effect of nearly $42 million in additional spending that benefits other businesses and industries in the region.

Together these numbers produce a total benefit of 1,337 jobs, more than $38 million in salaries, and $102 million in total spending for our region, the report indicates.

Beyond Health Care credits UPMC Northwest with a somewhat greater secondary or “ripple” impact on the region’s economy than did a similar report that HAP released last year. The previous report said the hospital supports almost 300 jobs that pay $6.2 million in salaries, but the new report increased UPMC Northwest’s secondary economic impact to 450 jobs and $11.7 million in wages.

Not reflected in the report is the additional economic impact produced by two other UPMC Northwest organizations, Sugar Creek Station and the Visiting Nurses Association of Venango County. UPMC Northwest’s skilled nursing/rehabilitation center and home health care organization contribute 328 additional jobs, $7.3 million in salaries, and $13.3 million in total spending to the local economy, not to mention the secondary economic benefits they generate.

The report also doesn’t mention several UPMC Northwest construction projects – including its $70 million hospital in Seneca and $3.9 million Open MRI Center in Reno – that have boosted the region’s economy.

All things considered, UPMC Northwest organizations make a “tremendous contribution to the community that goes far beyond the health care we provide,” Mr. Todhunter says.

The report also says:

• Pennsylvania hospitals provide almost 262,000 jobs, and hospital spending on products and services supports more than 260,000 additional jobs. This means that more than a half million Pennsylvanians rely on hospitals for employment.
   
• Pennsylvania hospitals contribute more than $56 billion to the state’s economy, including $23.4 billion in direct total spending and almost $33 billion worth of secondary or “ripple” effects.
   
• Hospitals are an especially important mainstay in rural communities: they’re the top employer in more than one-third of rural economies nationwide, and one of the top three employers in more than 90 percent of rural areas.
   
• Pennsylvania has the highest concentration of health care employment among all 50 states.

Ms. Scanlan says the report shows “it is imperative for policymakers to consider the health of hospitals and, by extension, their communities, as they make decisions about critical health care issues including economic development funding, reimbursements for care, medical liability reform, and workforce retention and recruitment.”

Information in the report is from the U.S. Department of Commerce, U.S. Department of Health & Human Services, Pennsylvania Department of Labor & Industry, The Lewin Group, Tripp-Umbach Healthcare Consulting, the Milken Institute, and MEDTAP International.