Hospitals an Asset to Cities Economic Impact Seen as $26 Billion

Article excerpt

ATLANTA -- A new report suggests city hospitals annually contribute $2 billion to the economy of Augusta, $1.4 billion to Savannah, $655 million to Athens and $26 billion statewide.

However, officials say hundreds of millions of dollars worth of free care for indigent patients, bad-debt write-offs and cuts in Medicaid have dozens of Georgia hospitals in financial intensive care.

"With more than 50 acute-care hospitals on the endangered list because their costs exceed revenues, this lack of funding could prove fatal to many institutions," said Joseph A. Parker, president of the Georgia Hospital Association.

The report, prepared by Georgia State University's Economic Forecasting Center, was commissioned in part by the association, which lobbies for increased government health care funding.

GSU used 1997 state figures, the latest available to the forecasting center.

Direct expenditures by Georgia hospitals increased from $7.6 billion in 1996 to $8 billion in 1997, the report said.

Using a multiplier considering the "ripple" impact of those expenditures, the report estimates the total impact in Georgia at $25.6 billion.

That amount is roughly equal to the combined economic activity that year of the transportation, communications and public-utilities industries, according to Jeff Humphreys, an economic forecaster at the University of Georgia. The direct expenditures of all state and local government in 1997 was around $19 billion, he said, adding that the ripple impact would be much higher.

The GSU report said hospitals and health systems employ more than 130,000 people in the state with a payroll exceeding $3 billion. …