MCGHealth Generates $821 Million For The Local Economy

MCGHealth played a huge role in bolstering Augusta’s financial health by pumping more than $820 million into the CSRA’s economy in 2004, according to a report by the Georgia Hospital Association.  The report found that, during the same period, MCGHealth provided $47 million in uncompensated care and sustained about 7,000 full-time jobs, accounting for a third of jobs created by all local hospitals combined.

The report revealed that MCGHealth had direct expenditures of $333 million.  However, when combined with an output multiplier developed by the United States Department of Commerce’s Bureau of Economic Analysis, the total economic impact of the hospital was more than $820 million.  This output multiplier considers the “ripple” effect of direct hospital expenditures on other sectors of the economy, such as medical suppliers, durable medical equipment and pharmaceuticals.

“Hospitals are a vital part of any regional economy,” said Don Snell, President and CEO of MCG Health, Inc.  “Most people do not think of hospitals beyond the critical role they play in meeting the health care needs of local residents.  However, hospitals also have a substantial economic presence in the local and state economy.  Hospitals affect the economy in much the same way a manufacturing plant does, by bringing money in through third-party payments, providing jobs and wages to residents, and providing an opportunity to keep health care dollars circulating within the local economy.  Hospitals also have an impact through the purchases of utilities, cleaning supplies, and other goods and services.  Just like a manufacturing plant or tourist attraction, MCGHealth have a significant influence on the local economy and the economy of Georgia as a whole.”

The report also measured the hospital’s direct economic contributions to the CSRA’s working families.  Using a “household earnings multiplier,” the study determined that MCG hospitals and clinics generated $318 million in household earnings in the local community.

While MCGHealth remains a major component of the area’s economic engine, the hospital’s leadership, like the rest of the Georgia hospital community, is concerned about a wide array of economic challenges that make it increasingly difficult to meet the community’s health care needs.  Those challenges include continued cuts in Medicare and Medicaid payments and a fast-growing uninsured population.  Georgia’s uninsured population currently tops 1.7 million and continues to grow.

“We’re extremely concerned with the current operating environment for hospitals,” said Snell.  “We’ve made a commitment to every citizen of this community to be here for them 24 hours a day, 365 days a year.  But our ability to do so is being compromised when, in many cases, we’re being paid less than what it actually costs to treat a patient.  It is our hope that our elected officials will do what is necessary to protect our local health care system and preserve access to health care for every resident of the CSRA.”