While Georgia hospitals continue to guard the physical well being of more than 9 million state residents, hospitals also play a huge role in bolstering Georgia’s financial health by pumping nearly $30 million into the state’s economy in 2004 according to a recently released report by the Georgia Hospital Association. The report also found that, during the same time period, hospitals provided more than $959 million in uncompensated care while sustaining more than 265,000 full time jobs in Georgia.

The report revealed that Georgia hospitals had direct expenditures of nearly $12 billion in 2004. When combined with an economic multiplier developed by the United States Department of Commerce’s Bureau of Economic Analysis, the total economic impact of those expenditures on other sectors of the economy, such as medical supplies, durable medical equipment and pharmaceuticals. Economic multipliers are used to model the resulting impact of change in one industry on the “circular flow” of spending within an economy as a whole.

“While Georgia hospitals stand ready to serve all people 24 hours a day, seven days a week, what is often overlooked is the huge positive economic impact that a local, community hospital has in any give area,” said GHA President Joseph Parker. “Throughout Georgia communities, hospitals are among the largest employers and they are essential to attracting new business to those areas.”

Despite their economic importance, hospitals in Georgia continue to face a myriad of economic and operational challenges that have placed their long term viability in question. More than one third of all hospitals in the state are losing money. As the state’s uninsured population of more than 1.7 million continues to grow and payments from government programs like Medicare and Medicaid dwindles, hospitals have fewer options to recoup the financial loses. “In the past, hospitals relied on patients with health insurance to help subsidize the millions of dollars of uncompensated care they provide on an annual basis”, explained Parker. “But the number of patients with private health insurance has dwindled so much, hospitals ability to recoup these costs has been weakened and there is nowhere else to go to make up for these huge, growing shortfalls.”

Other challenges Georgia hospitals face include:

• An influx of new physician owned outpatient surgery centers that continue to siphon patients with private health insurance from hospitals, leaving hospitals with a disproportionate share on uninsured/underinsured patients.

• A continued workforce shortage that has forced many hospitals to spend millions of dollars annually with staffing agencies just to maintain normal staffing levels. Furthermore, the state’s aging, fast growing population has made it difficult for hospitals to staff overcrowded, under funded emergency rooms.

• Aging physical plants that are forcing many hospitals to deal with the multi-pronged challenge of maintaining patient care operations, investing in new, expensive medical technology and making costly capital improvements to buildings that are in dire need of repair and renovation.

“Despite these obstacles, Georgia hospitals and the more than 115,000 Georgians who are employed by them continue to provide heroic, quality health care service to everyone regardless of their ability to pay,” said Parker. “But if we’re going to continue, we need state and federal lawmakers to recognize just how integral their local, community hospital is not only to the health of their families, but to the economic viability of their entire districts. We need lawmakers who are committed to ensuring that hospitals are adequately reimbursed and have the resources to meet the health care demands of a growing, aging population.”

The hospital economic impact report also measures hospitals’ direct economic contributions to Georgia’s working families. Using a “household earnings multiplier,” the study determines that hospitals generate more than $10.7 billion in household earnings in the state. The household earnings multiplier measures the increased economic contributions form households employed directly or indirectly by hospitals through daily living expenditures.