Rural Health Resources - Tools to Assist Outreach Grantees

ByByCheryl F. St. ClairCheryl F. St. Clair

Associate DirectorAssociate DirectorNational Center for Rural Health WorksNational Center for Rural Health Works

Presentation at Outreach MeetingWashington, DC

September 1, 2009

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Rural Health and Rural Economic Development

Rural America needs quality primary health care services, especially with the high proportion of uninsured, underinsured, and elderly and with the increasing number of elderly.

Due to the current recession, rural America also needs jobs.

• Rural health care services generates an excellent opportunity for maintaining or increasing employment in rural America.

• Health care sector can make up to 10-15 percent of the

employment base and when secondary benefits are included, the percent of the employment base attributed to health care is often 15 to 20 percent.

Rural Health and Rural Economic Development

To attract business and industry, communities need qualityhealth care and education

Rural Health andRural Economic Development

To attract retirees,communities need quality

health care and safety

Objective:

To provide overview of tools of National Center for Rural Health Works

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I. Overview of national health trends

II. RHW tools that may assist outreach grantees

A. Economic Impact AnalysisB. Community Health EngagementC. Health Service Profitability Studies

More specifically:

I. Overview of National Health Trends

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Table 1United States Health Expenditures and Employment Data

1990-2007; Projected for 2011 & 2017  United States Data

Total Per Capita Health Health Ave. Yrly.Year Health Health as % Sector Increase in

Expenditures Expenditures of GDP Employment Employment  ($Billions) ($) (%)   (000)   (%)

1990 714.1 2,814 12.3% 7,814 4.8%

2000 1,353.2 4,789 13.8% 10,858 3.9%

2002 1,602.3 5,560 15.3% 11,536 3.1%

               2005 1,980.6 6,687 15.9% 12,314 2.1%2007 2,241.2 7,421 16.2% 12,946 2.7%

              

Projections  

2011 2,905.1 9,322 17.4%  2017 4,277.1 13,101 19.5%        

National Gross Domestic Product

National Health Care Expenditures

Type of Health Service

Health Services16.2%

All Other Services 83.8%

$2.2 trillion

Nursing HomePrescription Drugs

Other

Hospital Care

Figure 1.National Health Expenditures

as a Percent of Gross Domestic Product and by Health Service Type, 2007

Physician Services

31%

21%

6%10%

32%

A. Impact Analysis

II. RHW tools that may assist outreach grantees

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The Economic Impact of the Health Sector on the Economy of the Medical Service Area

of Richardson Medical Center in Rayville, Richland Parish, Louisiana

Prepared for:The Rural Hospital Performance Improvement Project

Mississippi Delta Project

Employment Impact of Health Serviceson the Medical Service Area of Richardson Medical Center

in Rayville, Richland Parish, LA

Health Sector Number of Employment Secondary TotalComponent Employees Multiplier Impact Impact

Hospitals 186 1.58 108 294Physicians, Dentists, & Other Health Professionals 92 1.60 55 147Pharmacies 22 1.30 7 29Other Health & Medical Services 311 1.34 106 417

TOTALS 611 276 887

Income Impact of Health Serviceson the Medical Service Area of Richardson Medical Center

in Rayville, Richland Parish, LA

Health Direct Secondary Total Retail 4% SalesService Impact Multiplier Impact Impact Sales Tax

Hospitals $7,594,216 1.32 $2,430,149 $10,024,365 $1,503,655 $60,146Physicians, Dentists, & Other Health Professionals $5,194,580 1.24 $1,246,699 $6,441,279 $966,192 $38,648Pharmacies $1,098,188 1.36 $395,348 $1,493,536 $224,030 $8,961Other Health & Medical Services $10,311,238 1.31 $3,196,484 $13,507,722 $2,026,158 $81,046

TOTALS $24,198,222 $7,268,680 $31,466,902 $4,720,035 $188,801

Estimate the economic impact Estimate the economic impact of a rural primary care physician of a rural primary care physician

on local economyon local economy

Physician Office ImpactsPhysician Office Impacts

EmploymentEmployment 4 4

Wages, Salaries and BenefitsWages, Salaries and Benefits $287,000$287,000

Total Clinic RevenueTotal Clinic Revenue $394,000$394,000

Physician Impact onPhysician Impact onLocal Hospital Inpatient & Outpatient Visits,Local Hospital Inpatient & Outpatient Visits,Employment, and Wages, Salaries & BenefitsEmployment, and Wages, Salaries & Benefits

No. of Inpatient VisitsNo. of Inpatient Visits 134134

Inpatient RevenueInpatient Revenue $457,000$457,000Outpatient RevenueOutpatient Revenue $295,000$295,000

Total Hospital RevenueTotal Hospital Revenue $752,000$752,000

EmploymentEmployment 1313Wages, Salaries, and BenefitsWages, Salaries, and Benefits $435,000$435,000

Summary of Physician ImpactSummary of Physician Impactfrom Clinic and Hospital Activitiesfrom Clinic and Hospital Activities

EmploymentEmploymentWages, Salaries, and Wages, Salaries, and

BenefitsBenefitsTotalTotal

RevenueRevenue

ClinicClinic 44 $287,000$287,000 $394,000$394,000

HospitalHospital 1313 $435,000$435,000 $752,000$752,000

TotalTotal 1717 $722,000$722,000 $1,146,000$1,146,000

EstimateSecondaryImpacts

Households

Industry

Basic

ServicesGoods &

$

Inputs

Products

Inputs

$ $

$

$

Services

$ $

Labor

Total Physician Impact

Employment

Employment Multiplier

Total Impact

Clinic 4 1.38 6 Hospital 13 1.38 17 Total 17 23

Wages, Salaries,

and Benefits Wages, Salaries, & Benefits Multiplier

Total Impact

Clinic $287,000 1.16 $333,000 Hospital $435,000 1.28 $556,000 Total $722,000 $889,000

Revenue Output Multiplier Total Impact

Clinic $394,000 1.37 $540,000 Hospital $752,000 1.32 $993,000 Total $1,146,000 $1,533,000

IN SUMMARYIN SUMMARYONE RURAL PHYSICIAN GENERATES:ONE RURAL PHYSICIAN GENERATES:

2323 JOBSJOBS

$889,000$889,000 WAGES, SALARIES & BENEFITSWAGES, SALARIES & BENEFITS

$1,533,000$1,533,000 TOTAL REVENUETOTAL REVENUE

Economic Impact Studies Completed:

• Impact of Health Sector on Local Economy

• Impact of Hospital on Local Economy

• Impact of CAH on Local Economy

• Impact of Constructing a Hospital on Local Economy

• Impact of FQHC on Local Economy

•Impact of Social Service Agencies on Local Economy

Economic Impact Studies Completed (Cont.):

• Impact of Pharmacy on Local Economy

• Impact of a Rural Physician on a Rural Economy

•Impact of a Physician Shortage on a Community Economy

•Impact of a Specialty Physician on a Community Economy

•Impact of a Pharmacy on a Local Economy

•Impact of a Medical School on Community, Regional or State Economy

•Impact of Telehealth on Community, Regional or State Economy

•Impact of Health Sector on State Economy

• Impact of Hospitals on State Economy

• Impact of Medicaid Program on State Economy

Economic Impact Studies Completed (Cont.):

B. Community Health Engagement Process

II. RHW tools that may assist outreach grantees

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Community Health Engagement Process

Involves community input Series of four meetings Four products

Community Health Engagement - Mississippi Delta • Bullock County, Alabama• Cross County, Arkansas• Lawrence County, Arkansas• Van Buren County, Arkansas• Randolph-Monroe Counties, Ilinois• La Salle Parish, Louisiana• Richland Parish, Louisiana• West Feliciana Parish, Louisiana• Wilkinson and Amite Counties, Mississippi• Claiborne County, Mississippi• Holmes County, Mississippi• Jefferson Davis County, Mississippi• Marshall County, Mississippi• Quitman County, Mississippi• Scott County, Mississippi• Perry County, Missouri• Gibson County, Tennessee• Haywood County, Tennessee

Community Health Engagement – National Association of Counties (NACo) • Grand County, Colorado• Pondera County, Montana• Mason County, Washington• Adams County, Ohio• Grand County, Utah• Linn County, Missouri• Grimes County, Texas• Holmes County, Florida• Summers County, West Virginia• Fulton County, Pennsylvania• Idaho County, Idaho• Sumter County, Alabama

C. Health Service Profitability Studies

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II. RHW tools that may assist outreach grantees

Health Service Profitability Studies –BUDGETS

Objective: Identify health services that the community may be interested in expanding or adding

Goal: If study shows feasible, community decision if health service will be implemented (expanded or added)

Basic Methodology for Analyzing a Health Services Issue

I. Estimate Needs

II. Project Costs

A. Capital or Start-Up CostsB. Annual Operating Costs

III. Estimate Revenue

IV. If Doesn't Break-Even, Other Source of Funds

Health Service Profitability Study – Kidney Dialysis

Based on Demand for 22 patients

Capital costs (amortization) $78,572Operating costs $715,922Total Costs $794,494

Total Revenue $814,250

REVENUE less COSTS +$19,756

Health Service Profitability Studies

Primary Care PhysicianObstetrics/Gynecology PhysicianPediatricianSpecialty PhysiciansEmergency Medical Services (Basic and Advanced)Emergency Medical Responder (EMR) SystemsAdult Day ServicesKidney DialysisAssisted Living FacilitiesFederally Qualified Health Centers (FQHCs) –

• Primary Care Physician• Dentist

National Center for Rural Health Works

www.ruralhealthworks.org

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Contacts:

Gerald A. Doeksen, Director or Cheryl F. St. Clair, Associate Directorgad@okstate.edu cheryl@okstate.edu

National Center for Rural Health WorksOklahoma Cooperative Extension Service

Oklahoma State University513 Ag Hall

Stillwater, OK 74078Phone: 405-744-6083

Fax: 405-744-9835