State Ranks High in Economic Impact of Medical Centers

February 10, 2004

North Carolina ranks 10th in the nation in economic impact of its medical colleges and teaching hospitals, with more than $10.3 billion a year in direct and indirect benefit to the state, according to a study just released by the Association of American Medical Colleges (AAMC).

The study, which used 2002 data, includes the impact of business spending, employment, sales and income taxes, and out-of-state visitors. The research, conducted by Tripp Umbach Healthcare Consulting Inc., found that “for every dollar directly spent by a medical school or teaching hospital, an additional $1.30 is indirectly generated, for a total impact of $2.30.”

“One out of every 54 wage earners in the United States labor force works either directly or indirectly for an AAMC member” institution, the report says. “Communities in all regions of the country typically rely on these organizations for unique and specialized health care service, advanced research, education or health professionals, job creation and new business development.”

The AAMC report does not break down contributions by individual medical centers. But if the 2.3 multiplier is used to estimate each medical center’s impact based on its annual budget, Wake Forest University Baptist Medical Center, for example, has a total economic impact of more than $2.7 billion a year.

That total for Wake Forest Baptist would include estimated government revenues of $20.3 million, according to an online calculator provided by the consulting firm, based on the number of employees. Those revenues include income taxes paid by employees, and sales, income and other business taxes paid by companies that do business with the medical center.

North Carolina has four academic medical centers associated with universities and two other AAMC-member teaching hospitals. The statewide economic impact figures include about $2.5 billion a year for capital improvements, goods and services, about $1.5 billion in spending by physicians, employees and students, and more than $451 million from out-of-state patients and visitors.

Government revenues indirectly generated by AAMC member institutions total more than $403 million a year in North Carolina. The medical centers have created – directly or indirectly – about 95,000 jobs in the state, according to the report.

Nationally, the economic impact of the academic medical institutions totals more than $326 billion a year, and they create more than 2.7 million jobs.

North Carolina’s four AAMC-member academic medical centers associated with universities are Wake Forest University, University of North Carolina at Chapel Hill, East Carolina University and Duke University. Other teaching hospital AAMC members are Carolinas Medical Center in Charlotte and Veterans Affairs Medical Center in Durham.


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