The Economic Impact of Physicians
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1 The Economic Impact of Physicians A Fact Sheet Examining the Economic Contribution Physicians Make to Their Communities and to Their Affiliated Hospitals Prepared by: Merritt Hawkins, the nation s leading physician search and consulting firm and a company of AMN Healthcare (NYSE: AHS), the largest healthcare workforce solutions company in the United States Merritt Hawkins 5001 Statesman Drive Irving, Texas 75063
2 THE ECONOMIC IMPACT OF PHYSICIANS A Fact Sheet Examining the Economic Contribution Physicians Make to Their Communities and to Their Affiliated Hospitals Overview As the quarterbacks of the healthcare delivery team, physicians play a decisive role in maintaining and enhancing the quality of care patients receive in medical offices, hospitals, urgent care centers, government facilities, community health centers and other sites of service nationwide. Each year, physicians handle approximately 1.3 billion patient encounters at medical offices and hospital emergency rooms throughout the county, at a rate of 4.3 physician visits per person, according to the Centers for Disease Control (CDC). Through these encounters, physicians administer or direct much of the care patients receive, enhancing qualify of life and, in many cases, saving the lives of their patients. There is, of course, no dollar value that can be placed on the clinical services physicians provide. However, physicians also play a central role in healthcare economics. Through patient admissions, tests, prescriptions, procedures and other activities, physicians receive or control 87% of all spending on personal health in the United States (see Health Costs Absorb One Quarter of Economic Growth, Boston University School of Public Health, Feb. 9, 2005). Several studies have been conducted to measure the economic impact of physicians per capita or by specialty. Summaries of two of the most recent of these studies are included below, including numbers from Merritt Hawkins 2013 Survey of Physicians Inpatient/Outpatient Revenue. These studies underscore the important contributions physicians make to the local economic development of their communities and to their affiliated hospitals, and may be useful to physician recruiting professionals, hospital executives, hospital trustees and others considering the overall impact and benefits of physician recruiting.
3 The American Medical Association: The National Economic Impact of Physicians Prepared by IMS Health March 2014 This AMA-sponsored report estimates the total economic impact of patient care physicians in each of the 50 states, the District of Columbia at in the nation as a whole, using as barometers physician output, jobs, wages and benefits and state and local tax revenue. Highlights of physician economic contributions include: Total economic output: is $1.6 trillion. The combined economic output of patient care physicians in the United States Per capita economic output: Each physician supports a per capita economic output of $2.2 million. Jobs: On average, each physician supports about 14 jobs. Wages and benefits: On average, each physician supports a total of $1.1 million in wages and benefits. Tax revenues: On average, each physician supports $90,449 in local and state tax revenues. The chart below indicates the average economic output of physicians by state (numbers do not include economic output physicians contribute to the national economy, only the output in their states): Average Per Capita Economic Output of Patient Care Physicians By State Number of Output per State Output (in billions) Physicians Physician Alabama 8,773 $11.2 $1,276,644 Alaska 1,559 $2.0 $1,282,874 Arizona 13,377 $21.5 $1,607,236 Arkansas 5,135 $6.3 $1,226,874 California 85,943 $162.6 $1,891,952 Colorado 12,263 $20.1 $1,639,077 Connecticut 10,209 $16.6 $1,626,016 Delaware 2,223 $3.2 $1,439,496 District of Columbia 4,405 $5.6 $1,271,283 Florida 43,111 $76.4 $1,772,170 Georgia 19,021 $29.7 $1,561,432 Hawaii 3,562 $5.3 $1,487,928 Idaho 2,708 $3.6 $1,329,394 Illinois 29,617 $50.9 $1,718,608 Indiana 13,298 $18.2 $1,368,627 Iowa 5,820 $7.1 $1,219,931 Kansas 5,407 $7.2 $1,331,607 Kentucky 8,817 $11.5 $1,304,299 Louisiana 9,804 $13.2 $1,346,389 Maine 3,706 $5.1 $1,376,147 Maryland 17,253 $28.5 $1,651,887
4 Massachusetts 23,815 $39.5 $1,658,619 Michigan 23,519 $37.0 $1,573,196 Minnesota 13,429 $21.0 $1,563,780 Mississippi 4,917 $6.1 $1,240,594 Missouri 13,735 $20.3 $1,477,976 Montana 2,140 $2.8 $1,308,411 Nebraska 3,671 $4.8 $1,307,546 Nevada 4,723 $7.0 $1,482,109 New Hampshire 3,628 $5.3 $1,460,860 New Jersey 22,374 $39.0 $1,743,095 New Mexico 4,188 $5.5 $1,313,276 New York 58,443 $98.9 $1,692,247 North Carolina 20,247 $29.4 $1,452,067 North Dakota 1,560 $1.8 $1,153,846 Ohio 27,766 $43.4 $1,563,063 Oklahoma 6,931 $9.0 $1,298,514 Oregon 9,953 $14.8 $1,486,989 Pennsylvania 33,347 $53.0 $1,589,348 Rhode Island 3,101 $4.8 $1,547,888 South Carolina 9,354 $12.6 $1,347,017 South Dakota 1,733 $2.1 $1,211,771 Tennessee 14,026 $20.1 $1,433,053 Texas 48,314 $78.6 $1,626,858 Utah 5,205 $8.3 $1,594,621 Vermont 1,778 $2.4 $1,349,831 Virginia 17,888 $26.2 $1,464,669 Washington 16,400 $26.1 $1,591,463 West Virginia 3,862 $4.3 $1,113,413 Wisconsin 13,376 $18.8 $1,405,502 Wyoming 987 $1.2 $1,215,805 As these numbers indicate, physicians on average generate over a million dollars in all states and close to two million dollars in some states. For additional information about this report, contact IMS Health, 1725 Duke Street, Suite 510, Alexandria, Virginia.
5 Merritt Hawkins 2013 Physician Inpatient/Outpatient Revenue Survey Physicians do not only contribute to their local economies through hiring, purchases, wage generation and related factors. Through patient admissions, prescriptions, tests, and procedures, they also contribute revenue to their affiliated hospitals. In order to track the revenue physicians generate on behalf of their affiliated hospitals, Merritt Hawkins periodically conducts its Survey of Physician Inpatient/Outpatient Revenue. In this survey we ask hospital chief financial officers (CFOs) to quantify the average net inpatient/outpatient revenue physicians in various specialties generate for their hospitals per year. These revenues are not considered in the economic output data cited in the AMA/IMS Health data included above. Some of the results of the 2013 version of this survey are indicated below: Annual Net Inpatient/Outpatient Revenue Generated by Physicians For Their Affiliated Hospitals Specialty Annual Revenue Orthopedic Surgery $2,683,510 Cardiology (Invasive) $2,169,643 Family Practice $2,067,567 General Surgery $1,860,566 Internal Medicine $1,843,137 Hematology/Oncology $1,761,029 Neurosurgery $1,684,523 OB/GYN $1,439,024 Urology $1,428,030 Gastroenterology $1,385,714 Psychiatry $1,302,631 Cardiology/Non-Inv. $1,232,142 Nephrology $1,175,000 Pulmonology $1,009,868 Otolaryngology $825,757 Pediatrics $787,790 Ophthalmology $725,000 Neurology $691,406 The average annual net inpatient/outpatient revenue physicians in the specialties listed above generate on behalf of their affiliated hospitals is over $1.4 million. For a complete copy of Merritt Hawkins 2013 Survey of Physician Inpatient/Outpatient Revenue contact Merritt Hawkins at
6 Conclusion While physicians are the key to providing quality patient care, they also drive economic development and job creation in their communities and are essential to the financial viability of their affiliated hospitals all factors which should be taken into account when considering the costs and benefits of physician recruiting. For additional information on physician revenue generation, physician compensation, physician recruiting strategies and related topics, contact: Corporate Office: Eastern Regional Office: Merritt Hawkins Merritt Hawkins 5001 Statesman Drive 7000 Central Pkwy NE Irving, Texas Suite Atlanta, Georgia Merritt Hawkins 5001 Statesman Drive Irving, Texas 75063
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