DES MOINES – As Iowa lawmakers continue to debate expanding Iowa’s Medicaid program to cover more low-income residents, one aspect of the debate is the economic impact of expansion on both the state and its community hospitals.
“We can’t ignore the fact that Medicaid expansion would bring as much as $600 million a year to Iowa’s economy,” said Iowa Hospital Association President and CEO Kirk Norris. “That is a huge influx of dollars that would spread across the state. It’s not unlike a major business choosing to relocate to Iowa, but the impact is much broader and beneficial to far more Iowans. “In terms of overall impact, there is no bigger economic issue in Iowa than Medicaid expansion.”
By insuring as many as 150,000 low-income Iowans, Medicaid expansion would also help alleviate the growing amount of charity care and bad debt among Iowa hospitals. In recent years, charity care and bad debt (also known together as uncompensated care) have grown 10 percent annually. In 2012, Iowa hospitals provided more than $1 billion in uncompensated care, primarily to uninsured patients.
“Uncompensated care will always be part of the hospital financial picture, but the growth we are seeing as more and more people find themselves unable to afford insurance is unsustainable,” said Norris. “It impacts the ability of hospitals to maintain services, modernize facilities and pay competitive wages. Medicaid expansion would make a real difference in this regard.”
Expansion will also help Iowa hospitals remain key drivers of Iowa’s economy. Iowa community hospitals generate more than 133,000 jobs that add nearly $6.2 billion to the state’s economy, according to IHA’s latest Iowa hospital economic impact report. In addition, Iowa hospital employees by themselves spend $1.8 billion on retail sales and contribute nearly $106 million in state sales tax revenue.
“In most Iowa counties, hospitals are among the three or four largest employers, but it’s more than just providing jobs,” said Norris. “People are often unaware of the broader contribution that hospitals make to their local economies, the significance of hospital purchases with local businesses and the impact of their employees’ spending for the entire region.”
Wayne County Hospital generates 245 jobs that add $11,358,687 to the local economy, according to the latest study by the Iowa Hospital Association. In addition Wayne County Hospital employees by themselves spend $1,894,290 on retail sales and contribute $113,657 in state sales tax revenue.
“Wayne County Hospital is a major contributor to the economic security of our community and our business continues to grow. The economic impact of Wayne County Hospital back into the community this year is roughly an eleven-fold return on investment based upon the number of tax payer dollars received in the same year. We remain one of the largest employers in our county. We believe we have an obligation to the community to provide the best healthcare available for our patients and an outstanding work environment for our medical staff and employees.” commented, Daren Relph, CEO.
The IHA study examined the jobs, income, retail sales and sales tax produced by hospitals and the rest of the state’s health care sector. The study was compiled from hospital-submitted data on the American Hospital Association’s Annual Survey of Hospitals and with software that other industries have used to determine their economic impact.
The study found that Iowa hospitals directly employ 71,169 people and create another 62,198 jobs outside the hospital sector. As an income source, hospitals provide more than $4 billion in salaries and benefits and generate another $2.2 billion through other jobs that depend on hospitals.
In all, Iowa’s health care sector, which includes employed clinicians, long-term care services and assisted living centers, pharmacies and other medical and health services, directly and indirectly provides 321,355 Iowa jobs, or more than one-fifth of the state’s total employment.
Complete information from the study, including economic impact data for each of Iowa’s hospitals, is available on the IHA website at www.ihaonline.org.
The Iowa Hospital Association is a voluntary membership organization representing hospital and health system interests to business, government and consumer audiences. All of Iowa’s 118 community hospitals are IHA members.