The Impact of Hospitals in Northeast Ohio on the Economy of the Region

The Center for Health Affairs (CHA) represents 35 hospitals in Northeast Ohio whose
employment and business interactions create economic benefits across households and
industries in the Greater Cleveland area. ¹ This report estimates the economic impact
of 35 hospitals on Greater Cleveland’s employment, household earnings, and business
sales for the most recently completed fiscal year as of December 2004. ²

Economic Impact

The total economic impact of Cleveland area hospitals and their related health care
facilities is $15.5 billion. This includes a household earnings impact of $6.2 billion.
The total impact on employment in the Cleveland area is 137,197 jobs.

• Together, these economic activities generate nearly $399.4 million annually in
  state and local tax revenues.
• The economic impact associated with hospital patients who do not reside in the
  Greater Cleveland area is estimated at $2.4 billion. Patients from outside the
  region account for approximately 12.3 percent of area hospitals' patient days and
  18.3 percent of inpatient billings.
• The total economic impact of local construction is $436.3 million.

Expenditures and Employment

• In 2004, CHA member institutions' expenditures totaled approximately $7.2
  billion.
• When all personnel expenditures are considered (contracted professional and
  temporary services, along with wages and benefits), they account for 59.3
  percent of total hospital expenditures. Wages and benefits were the largest
  component of expenditures, totaling $3.6 billion.
• The hospitals and their related facilities employed a total of 70,395 people in
  2004, of which 3.6 percent were medical residents.

Other Findings

• Over a one-year period, the hospitals and their related facilities have invested
  over $79.5 million in information technology to improve quality and efficiency.
• Insurance and drug costs have affected hospitals as well as individual consumers.
  Pharmaceutical expenditures accounted for 5.8 percent of hospital expenditures,
  while professional liability insurance expenditures amounted to 3.3 percent of
  hospital expenditures.

_{1   The Greater Cleveland area is defined as the six counties in Northeast Ohio that are served by CHA-member hospitals. They are the five counties that make up the Cleveland Metropolitan Area: Cuyahoga, Lorain, Geauga, Medina, and Lake Counties, plus neighboring Ashtabula County. Together, these counties constitute the Greater Cleveland area, also referred to in this study as Northeast Ohio or the Cleveland area.}

_{2   The economic impact of CHA members is based on survey data that describes the
expenditures of 35 hospitals, two nursing and personal care facilities, and 26 other medical
and health service facilities affiliated with the 35 hospitals.}