Illinois Hospitals and health systems

Transcription

1 Illinois Hospitals and health systems state Economic Impact 2014 bs Wages Benefits Capital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits apital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Capital Supplies Ripp ffect Direct Indirect Jobs Wages Benefits Capital Supplies Ripple-Effect Direct Indirec bs Wages Benefits Capital Supplies Ripple-Effect Direct Indirect Wages Jobs Jobs JobBenefits R apital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Capital Supplies Ripp ffect Direct Indirect Jobs Wages Benefits Capital Supplies Ripple-Effect Direct Indirec bs Wages Benefits Capital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits pital Supplies Direct Ripple-Effect Indirect Jobs Wages Benefits Capital Supplies Rippl ffect Direct Indirect Jobs Wages Benefits Capital Supplies Ripple-Effect Direct Indirec bs Wages Benefits Capital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits apital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Capital Supplies Ripp ffect Direct Indirect Jobs Wages Benefits Capital Supplies Ripple-Effect Direct Indirec bs Wages Benefits Capital Supplies Direct Indirect Ripple-Effect Jobs Wages Benefits apital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Capital Supplies Ripp ffect Direct Indirect Jobs Wages Benefits Capital Supplies Ripple-Effect Direct Indirec Billion transformingillinoishealthcare.org

2 ages Benefits Capital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits l Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Capital Supplies -Effect Direct Indirect Jobs Wages Benefits Capital Supplies Ripple-Effect Direct ct Jobs Wages Benefits Capital Supplies Ripple-Effect Direct Indirect Wages nefits R Capital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits l Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Capital Supplies pple-effect Direct Indirect Jobs Wages Benefits Capital Supplies Ripple-Effect Indirect Jobs Wages Benefits Capital Supplies Direct Ripple-Effect Indirect Jobs Benefits Capital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits l Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Capital Supplies -Effect Direct Indirect Jobs Wages Benefits Capital Supplies Ripple-Effect Direct ct Jobs Wages Benefits Capital Supplies Ripple-Effect Direct Indirect Jobs Wages its Capital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Capital ies Direct Indirect Ripple-Effect Jobs Wages Benefits Capital Supplies Jobs Benefits Capital Supplies Ripple-Effect Direct Indirect Jobs Wages Benefits Executive Summary Illinois Hospitals and Health Systems: Major Economic Engines... 4 Leading Health Care s Transformation Doing All of This on Thin or No Margins Great Health Care for Residents...15

3 The Illinois Health Care Sector: A Consistent Creator of Jobs. that Bolster the Middle Class Between 2000 and 2013 Illinois health care jobs rose +23.6% 115,600 jobs gained In the same time frame, total Illinois employment dropped 3.7% 217,300 jobs lost Source: Illinois Department of Employment Security Current Employment Statistics Program Jan Jan IHA Illinois Hospitals and Health Systems State Economic Impact Report >

4 Executive Summary From saving lives to bringing new life into the world, it is easy to understand the vital contribution hospitals provide. Less understood is the financial and economic impact of Illinois more than 200 hospitals and nearly 50 health care systems on our everyday lives. Illinois hospitals and health systems are: Major Economic Engines In Illinois, 1 in 10 jobs is in health care. Health care provides good-paying jobs at all skill levels that offer opportunities for advancement and bolster the middle class. Illinois hospitals and health systems employ more than a quarter of a million people, generating nearly 450,000 direct and indirect jobs. Annually, Illinois hospitals and health systems generate $83.4 billion for state and local economies, including: $38.6 billion in payroll; In Illinois, 1 in 10 jobs is in health care $34.8 billion in goods and services; and $10.0 billion in capital expenditures. Leading Health Care s Transformation As positive change agents, Illinois hospitals are leading health care transformation, implementing the profound changes of health care reform and delivering on the promise of better health care for all at a lower cost. For example, Illinois hospitals are bringing together non-traditional providers from across the continuum and creating Accountable Care Organizations and Accountable Care Entities to care for seniors, medically fragile and vulnerable populations. Illinois hospitals and health systems employ more than a quarter of a million people, generating nearly 450,000 direct and indirect jobs. Operating on Thin or No Margins In 2012/2013, more than one in three Illinois hospitals operated in the red. Financial instability is a statewide problem. 2 IHA Illinois Hospitals and Health Systems State Economic Impact Report > 2014

5 Just as lives depend on our hospitals, our hospitals depend on the support of the government and the public. Part of the reason for hospitals financial instability is because Illinois hospitals are absorbing more than $11 billion in Medicare payment reductions over ten years under health care reform and other federal legislative and regulatory actions. This is on top of more than $380 million in state Medicaid reductions since First conducted in 2010, this is the third economic analysis performed by the Illinois Hospital Association (IHA). This report identifies and measures the direct involvement of hospitals in the local economy and demonstrates the ripple effect that hospitals produce, contributing to the overall vitality of economic growth. This report also shows the significance of hospitals as large purchasers of goods and services; how Illinois hospitals are transforming to meet the challenges of health care reform; and the community benefits they provide to create safe, stable and healthy communities. Just as lives depend on our hospitals, our hospitals depend on the support of the government and the public. Hospitals play a critical and irreplaceable role in building healthy communities and a strong economy. In order to ensure the stability of the state s economy, the productivity of its workforce and the health status of its residents, it is imperative that state and federal officials not balance their budgets on the backs of hospitals and health systems, and the patients and communities they serve. IHA Illinois Hospitals and Health Systems State Economic Impact Report >

6 ILLINoIS HospITALS and HEALTH SySTEMS: Major Economic Engines Using an economic modeling system developed by the U.S. Bureau of Economic Analysis 1 and employment data from the Illinois Department of Employment Security, IHA has calculated the economic value of hospitals and health systems in the state of Illinois, and has found: Illinois hospitals generate $83.4 billion in economic impact. Illinois hospitals and health systems employ more than a quarter of a million people, generating nearly 450,000 direct and indirect jobs. In Illinois, one in ten jobs is in health care. While many industries in Illinois continue to struggle, health care employment has grown by +23.6% or +115,600 jobs between 2000 and In contrast, overall Illinois employment declined by 3.7% or 217,300 jobs. Illinois health care sector: Consistent Creator of Jobs that Bolster Middle Class. CumulaTIve PerCENTage Change IN EmployMENT Measured change begins % 20% 15% 10% 5% Illinois Health Care Employment +23.6% Cumulative Percent Change 0% 5% 10% Total Illinois Employment % Source: Illinois Department of Employment Security; Current Employment Statistics Program Jan Jan IHA Illinois Hospitals and Health Systems State Economic Impact Report > 2014

7 Health care is a consistent source of employment for the state. From 2000 to 2013, health care employment grew by an average of +1.6% each year while Illinois statewide employment dropped by an average of -.3% each year during the same time. Just in the last five years, health care employment grew by +7.2% (+41,200 jobs). During the same time, total employment statewide grew by only +3.7% The Health Care and Social Assistance sector, in total, created +57,300 new jobs in the last five years. LeadINg SourCE of Job CreaTION: ILLINOIS HeaLTH Care/SOCIal assistance 2 SECTOr New Illinois jobs created, Jan 2009 November Employment Services: Placement Agencies, Executive Search Services and Temporary Help Services Number of new jobs in thousands ,300 Jobs 50 Professional Services Health Care/ Social Services Leisure Trade/Transport Government Financial Information Construction Manufacturing Source: Illinois Department of Employment Security, Current Employment Statistics Program IHA Illinois Hospitals and Health Systems State Economic Impact Report >

8 Major Economic Engines (continued) In nearly half of the state s counties, hospitals are among the top three employers Illinois hospitals employ 200,226 full-time equivalents (258,936 people). Aging Baby Boomers will reshape the job market over the next decade Baby Boomers will increase demand and the need for health care services. As a result, the Illinois health care/social assistance sector 2 is projected to add almost 100,000 jobs by 2020, an increase of +14%. Health Care & Social Assistance 3 Projected to Rank #3 in Job Growth, Adding Almost 100,000 Jobs by Percent change in jobs Projected Percent Change in Employment in Selected Industries, % Job Growth Projected Job Growth Statewide: 9.1% 5 Professional & Business Services Leisure/ Hospitality Health Care/ Social Assistance Financial Activities Construction Trade/Transport Manufacturing Source: Illinois Department of Employment Security, Projections Nationally, the health care and social assistance sector is projected to grow at an annual rate of 2.6%, adding 5 million jobs between 2012 and This accounts for nearly one-third of the total projected increase in jobs. 6 IHA Illinois Hospitals and Health Systems State Economic Impact Report > 2014

9 Illinois Hospitals and Health System are a Stimulus for Business Illinois Hospitals Pump $83.4 Billion into the State s Economy and Generate Nearly 450,000 Jobs. Estimated Impact of Hospitals spending and Employment $45 $40 $38.6 Billion $35 $34.8 Billion 449,868 Jobs $30 $25 $20 $15 $10 $22.3B Indirect $16.3B Direct $20.2B Indirect $14.6B Direct Indirect Jobs 249,642 $10.0 Billion Direct Jobs 200,226 Dollars in Billions $ 5 0 Payroll Goods and Services $5.8B Indirect $4.2B Direct Capital IHA Illinois Hospitals and Health Systems State Economic Impact Report >

10 The Ripple Effect For every dollar hospitals and health systems spend, an additional $1.38 is generated in spending to state and local economies. In 2012, Illinois hospital and health systems: Paid $16.3 billion in wages and benefits to the more than a quarter of a million people they employ. Wages earned by hospital employees are in turn spent on groceries, clothing, mortgage payments, utilities, and other activities of daily living, generating an additional $22.3 billion to local economies for a total impact of $38.6 billion. Purchased $14.6 billion in goods and services medical supplies, electricity, food, and other items necessary to provide high-quality health care to all Illinoisans. In turn, this flow of funds to vendors rippled throughout state and local economies, generating an additional $20.2 billion in more spending for a total impact of $34.8 billion. Invested $4.2 billion in capital improvements buildings and new technology to stay on the cutting edge of health care. This in turn generated an additional $5.8 billion for a total impact of $10.0 billion from capital improvements. For every hospital job, an additional 1.25 Illinois jobs are created. 1..Estimates of the Illinois hospitals economic benefits were based on the Regional Input-Output Modeling System II (RIMS-II) developed by the U.S. Bureau of Economic Analysis (BEA). The Final Demand multipliers, obtained from BEA RIMS-II, were applied to 2012 Medicare cost report data of hospital jobs and spending to obtain the ripple effect of jobs and spending throughout the economy... 2,3..Health care and social assistance are included in the same sector because it is increasingly more difficult to distinguish between these two activities. The industries in this sector are arranged on a continuum, starting with those establishments providing medical care exclusively, continuing with those providing health care and social assistance, and finally finishing with those providing only social assistance. This continuum is critical to transforming health care, especially as we focus on maintaining the health of individuals and communities. 8 IHA Illinois Hospitals and Health Systems State Economic Impact Report > 2014

11 Altogether, Illinois hospitals infused more than $83.4 BIllion into the state s economy. ECONOMIC IMPaCT of ILLINOIS HOSPITaLS by geographic region* NORTHWEST $4.0B ECONOMIC IMPACT 21.8K JOBS NORTH CENTRAL $7.3B ECONOMIC IMPACT 44.9K JOBS WEST CENTRAL $4.1B ECONOMIC IMPACT 24.8K JOBS EAST CENTRAL $4.4B ECONOMIC IMPACT 25.5K JOBS CHICAGO SUBURBS $16.0B ECONOMIC IMPACT 69.3K JOBS COOK COUNTY $42.1B ECONOMIC IMPACT 225.7K JOBS ST. LOUIS AREA $2.3B ECONOMIC IMPACT 16.1K JOBS SOUTHERN $3.2B ECONOMIC IMPACT 21.7K JOBS TOTALS: $83.4B economic Impact 449.8K JOBS *Total Impact on Spending and Total Impact on Jobs IHA Illinois Hospitals and Health Systems State Economic Impact Report >

12 ILLINoIS HospITALS and HEALTH SySTEMS: Leading Health Care s Transformation As positive change agents, Illinois hospitals and health systems are leading health care s transformation, implementing the profound changes of health care reform, and delivering on the promise of better health care for all at a lower cost. To meet these challenges, Illinois hospitals are fundamentally changing their way of doing business, going outside their four walls to provide high-quality health care at the right time and in the right setting to support each person s quest for optimum health. This means new infrastructures, new locations, new partnerships, more efficiencies, lower costs, and greater accountability for patient outcomes. Just a few examples: A number of Illinois hospitals are bringing together non-traditional partners and creating Accountable Care Organizations and Accountable Care Entities to care for seniors, medically fragile and vulnerable populations. Two major academic medical centers are working with a safety-net hospital and several community agencies to decrease the diabetes rate in a neighborhood with the highest diabetes rate in the nation. Many Illinois hospitals are partnering with federally qualified health clinics and other community clinics to increase access and provide low-cost care. One major academic medical center is using telemedicine technology via a five-foot robot to provide off-site stroke patients accelerated access to specially trained stroke specialists, 24-hours a day, seven-days a week. To see how Illinois hospitals are transforming, go to illinoishealthcare.org 10 IHA Illinois Hospitals and Health Systems State Economic Impact Report > 2014

13 Illinois Hospitals Provide Services that Extend Beyond their four walls. Percent of Hospitals Providing Selected Services, 2012 Hospice 53.5% Ambulance Services Palliative Care 45.3% Transportation to Health Services Freestanding Outpatient Care 40.9% Home Health 40.9% Fitness Center 38.4% 35.2% Dentistry 34.0% Ambulatory Surgery Center Indigent Care Clinic 33.3% Rural Health Clinic 30.2% Meals on Wheels 29.6% Mobile Health Services 25.8% Adult Day Care 23.9% 13.8% 9.4% Reflects services provided by hospitals alone or through a joint venture. Source: AHA/Health Forum Annual Survey of Hospitals, 2012 IHA Illinois Hospitals and Health Systems State Economic Impact Report >

14 Leading Health Care s Transformation (continued) Illinois hospitals touch lives in ways the public might not expect. The financial value of contributions Illinois hospitals made to their communities in 2011/2012 was more than $5.2 billion. This includes: Cost of charity care provided Amount absorbed to cover underpayment for Medicaid and Medicare patient services Unpaid debt of those not paying for their care Donations Subsidizing of emergency and trauma care and other services Unreimbursed cost of training medical professionals Research not covered by grants Screenings and other services that address community health needs $5.2+ Billion: The financial Value of Illinois Hospitals Contributions to their communities. Illinois Community Benefits Provided by Hospitals Dollars in Millions Government-Sponsored Programs Total Bad Debt Charity Care at Cost Education Government-Sponsored Programs Total $ 2,448 Bad Debt $ 981 Charity Care at Cost $ 704 Education $ 460 Subsidized Health Services $ 300 Research $ 131 Donations $ 79 Other $ 62 Volunteers $ 33 Language Assistance $ 21 Source: 106 hospitals reporting to the Illinois Office of Attorney General 12 IHA Illinois Hospitals and Health Systems State Economic Impact Report > 2014

15 Since 2005, this represents: +42% increase in financial benefits provided by Illinois hospitals to their communities +182% increase in charity care since 2005 Government-Sponsored PrRogr ams Bad Debt Charity Care at Cost education Subsidized Health Services ReseaRCH Not covered by grants Donations Volunteers Language Assistance IHA Illinois Hospitals and Health Systems State Economic Impact Report >

16 ILLINoIS HospITALS and HEALTH SySTEMS: Doing All of This on Thin or No Margins More than one-third of hospitals statewide lose money on operations. In 2012/2013, more than one in three Illinois hospitals operated in the RED. Financial instability is not concentrated in one area of the state. It is a statewide problem. For example, almost 39% of the hospitals in central Illinois had a negative operating margin in the most recently available fiscal year. Another 10% of the hospitals in the state had operating margins of less than 2%. another 10% have operating margins of less than 2%. % of ILLINOIS HOSPITaLS OPEraTINg IN red by Geographic Region Northern Illinois (39 * ) 28.2% Chicago & Suburbs (84 * ) 34.5% Central Illinois (36 * ) 38.9% St. Louis Area (10 * ) 50.0% Southern Illinois (29 * ) 24.1% * Number of hospitals. Source: Medicare Cost Reports (HCRIS file, September 2013 Release) Part of the reason for this financial instability is because Illinois hospitals are absorbing more than $11 billion in Medicare payment reductions over ten years under health care reform and other federal legislative and regulatory actions. This is on top of more than $380 million in state Medicaid reductions since IHA Illinois Hospitals and Health Systems State Economic Impact Report > 2014

17 ILLINoIS HospITALS and HEALTH SySTEMS: Great Health Care for Residents Illinois hospitals provide the health care infrastructure necessary to help Illinois attract and retain families and businesses. Illinois is fortunate to have more than 200 hospitals and nearly 50 health care systems that provide the health care infrastructure necessary to help Illinois attract and retain families and businesses. Many Illinois hospitals are ranked among the top in the nation for patient care and medical outcomes. 7 of the top-rated 100 hospitals in the country are in Illinois. 1 of the nation s top 15 health systems is located in Illinois. 36 Illinois hospitals have received Nurse Magnet status more than any other state. Illinois hospitals provide high quality health care and this supports a high quality of life for the residents of Illinois. ILLINOIS HOSPITal LOCaTIONS IHA Illinois Hospitals and Health Systems State Economic Impact Report >

18 Hospitals play a critical and irreplaceable role in building healthy communities and a strong economy. As Illinois hospitals continue their efforts to ensure the stability of the state s economy, the productivity of its workforce and the health status of its residents, it is imperative that state and federal officials not balance their budgets on the backs of hospitals and health systems, and the patients and communities they serve... By working together, we will improve health, increase access and reduce costs for all. 16 IHA Illinois Hospitals and Health Systems State Economic Impact Report > 2014

19 Just as lives depend on our hospitals, our hospitals depend on the support of the government and the public.

20 IHA HEADQUARteRS 1151 East Warrenville Road. PO Box Naperville, Illinois SPRINGFIELD OFFICE 700 South Second Street. Springfield, Illinois WasHINGTON D.C. OFFICE. 400 North Capitol Street, NW. Suite 585. Washington D.C ihatoday.org