The Impact of Non-Profit and Governmental Hospitals on the Economy of the Greater Dayton Region

The Greater Dayton Area Hospital Association (GDAHA) represents 21 hospitals in the Dayton area whose employment and business interactions create economic benefits across households and industries in the Greater Dayton area. ¹ While the primary mission of the region’s hospitals is to provide the community with the highest quality care, this mission has very significant impact on the region’s economy. This report estimates the economic impact of the 17 GDAHA non-profit & government affiliated hospitals on the Greater Dayton region’s employment, household earnings, and business sales for the most recently completed fiscal year as of December 2005.²

Economic Impact

• The total economic impact of Greater Dayton area hospitals and their related health care
  facilities is $5.68 billion. This includes a household earnings impact of
  $2.54 billion.
• The total impact on employment in the Dayton area is 58,541 jobs.
• Together, these economic activities generate nearly $118 million annually in state and
  local tax revenues.
• The economic impact associated with hospital patients who do not reside in the Greater
  Dayton area is estimated at $247 million. Patients from outside the region account for
  approximately 4.5 percent of area hospitals' patient days and 4.8 percent of inpatient
  billings.
• The total economic impact of local construction is $257 million.

Expenditures and Employment

• In 2004-05, member institutions' expenditures totaled more than $2.96 billion.
• When all personnel expenditures are considered (contracted professional and temporary services, along with wages and benefits), they account for 58.0 percent of total hospital expenditures.
• Wages and benefits were the largest component of expenditures, totaling $1.42 billion.
• The hospitals and their related facilities employed a total of 30,927 people in 2005.

Other Findings

• In 2005, the participating hospitals and their related facilities invested over $42 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 16.0 percent of hospital operating
  expenditures, while professional liability insurance expenditures amounted to 2.9
  percent of hospital operating expenditures.

Individual reports were also composed for each of the participating member hospitals.

_{1 The Greater Dayton area is defined as the ten-county area surrounding Dayton that is served by GDAHA-member hospitals. They are the four counties that make up the Dayton Metropolitan Area: Clark, Greene, Miami and Montgomery, plus neighboring counties of Darke, Preble, Champaign and Shelby and the northern portions of Butler and Warren. Together, these counties constitute the Greater Dayton area, also referred to in this study as the Dayton area.}

_{2 The economic impact of GDAHA members is based on survey data that describes the expenditures of 17 hospitals, 6 nursing and personal care facilities, and 30 other medical and health service facilities affiliated with the respondent hospitals.}