Health Care Services. San Diego County 2014 NUSINSTITUTE.ORG PART I 1

Transcription

1 Health Care Services San Diego County 2014 NUSINSTITUTE.ORG PART I 1

2 Key Findings San Diego s health care services sector is one of the largest segments of the local economy. In 2012, 121,500 San Diegans were directly employed in the sector with an additional 76,000 jobs indirectly supported. Taking into account indirect impacts, the industry constituted 9.2% of San Diego s gross regional product in Every additional $50 million in health care services spending, such as from increased medical tourism or increased insurance coverage, generates an additional 600 jobs in the San Diego economy. From 2009 through 2013, almost 1 million square feet of additional medical office and 1.2 million square feet of hospital space were constructed in San Diego County annually, supporting more than 8,000 construction jobs. In 2011, more than $450 million in philanthropic donations went to more than 200 health care services organizations in San Diego County. Cities such as Houston and Cleveland extensively market their health care services sectors to prospective patients worldwide. Both regions claim that each year tens of thousands of out-ofregion patients travel to seek care from health care services providers located in these regions. San Diego s world class health care services can be a tool in recruiting business to our region.

3 Introduction The health care services sector represents one of the largest segments of San Diego County s economy. This sector directly supports approximately 121,500 private sector jobs in the region, and it indirectly supports another 76,000 jobs. The latter figure does not include several thousand more construction jobs that the health care services sector supports as it continues to build new facilities and carry out major renovations. As San Diego continues to grow and its population ages the health care services sector will continue to expand. This report quantifies the size and economic impact of the health care services industry in San Diego County. It also examines five special topics: Economic development advantages tied to the health care services sector Health care tourism The relationship between the health care services sector and philanthropy Health care services and construction in San Diego County San Diego s health care services sector compared to that of other metropolitan areas

4 Part I Estimating The Size And Economic Impact Of The Health Care Services Sector In San Diego County San Diego s entire health care industry is composed of three segments. In 2012, health care services entities employed 121,500 workers in San Diego County. Approximately 62,000 of these workers were employed in ambulatory health care services. 1 Firms in this segment range from physicians offices (25,700 employees) to dental offices (9,300 workers) to medical and diagnostic laboratories (4,000 employees). Typically firms in this segment are small businesses, with this category encompassing 5,700 separate establishments. This data includes an estimated 1,820 physicians in private practice who are not included in payroll records. 2 The second area in the health care services sector is general acute care and specialty hospitals. In 2012, there were approximately 35,000 jobs in this segment. These are much larger entities, with 56 separate establishments in San Diego County. 3 The third area of San Diego County s health care services sector is nursing and residential care facilities. In 2012, there were 23,751 workers employed at 690 establishments. It is a diverse segment, including skilled nursing facilities (employing 9,400 workers), residential mental health facilities (4,400 workers), and residential developmental disability homes (2,250 employees). The other two segments of the health care industry in San Diego County are the life science innovation sector and the retail health care sector. With respect to the first, there are 10,000 to 20,000 workers in San Diego s life science industry who are engaged in the research, development, and manufacturing of medical and biotechnology products. 4 With regard to the second, there are several thousand San Diegans employed in businesses such as pharmacies and drugstores (5,300 employees in 2012) and health food and supplement stores (400 workers).

5 Table 1 presents data from 2012 derived from payroll and unemployment insurance records for employment and wages in the health care services as organized by NAICS (North American Industry Classification System) codes. NAICS uses a six-digit hierarchical coding system to classify all economic activity into twenty industry sectors. Five sectors are mainly goods-producing sectors and fifteen are entirely services-producing sectors. The system allows for the identification of 1,170 different industry groupings. TABLE 1. All Employment (Private and public sectors), Establishments, and Wages, San Diego Health Care Services Sector, 2012 Sector/Subsector Employment Establishments Average Annual Wage ($) NAICS 621 Ambulatory health care services 62,342 5,710 63,692 NAICS 6211 Offices of physicians 28,795 2,398 84,057 NAICS 6212 Offices of dentists 9,354 1,634 45,618 NAICS 6213 Offices of other health practitioners 6,785 1,052 39,751 NAICS 6214 Outpatient care centers 4, ,465 NAICS 6215 Medical and diagnostic laboratories 4, ,667 NAICS 6216 Home health care services 5, ,216 NAICS 6219 Other ambulatory health care services 2, ,747 Sole Pracitioners and other non-payroll physicians 1,820 unknown unknown NAICS 622 Hospitals 35, ,651 NAICS 6221 General medical and surgical hospitals 30, ,487 NAICS Psychiatric and substance abuse hospitals ,055 NAICS 6223 Other hospitals 4, ,325 NAICS 623 Nursing and residential care facilities 23, ,646 NAICS Nursing care facilities, skilled nursing 9, ,527 NAICS 6232 Residential mental health facilities 4, ,819 NAICS 6233 Continuing care, assisted living facilities 8, ,369 NAICS 6239 Other residential care facilities 1, ,581 TOTAL 121,510 6,459 57,990 Source: U.S. Bureau of Labor Statistics. HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART I 5

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7 Figure 1 looks at how employment has changed in each segment over the past decade. Since historic data is not available at sufficient detail for the public sector, just private sector employment is reported. Over the past decade, employment in San Diego s health care services sector has grown faster than both population and overall employment. Figure 2 tracks employment in the sector, overall private-sector employment, and the region s population since National University System Institute for Policy Research (NUSIPR) forecasts that locally, all three primary segments of health care services (ambulatory care, hospitals, and skilled nursing facilities) will grow over the next five years at rates faster than either population or overall employment. San Diego has fewer hospital beds per 100,000 residents than the rest of the state and many other metropolitan areas, suggesting that there is room for that sub-segment to grow, especially as the population ages. 6 Increased health insurance coverage should also increase demand and contribute to healthy employment growth in the hospital category. Since 2005, employment in the ambulatory care segment has grown faster than employment in the hospital sector, and we expect this trend to continue. Third party payers and regulators continue to pressure health care providers to deliver health care services on an outpatient basis and the Affordable Care Act is predicted to increase demand for general practitioners and non-acute medical services. 60,000 50,000 40,000 FIGURE 1. Private Sector Employment in Health Care Services, San Diego County, EMPLOYMENT 60,000 50,000 40,000 30,000 20,000 NAICS 621 Ambulatory Health Care Services NAICS 622 NAICS 621 Hospitals Ambulatory Health Care Services NAICS 623 Nursing and Residential Care Facilities NAICS 622 Hospitals NAICS 623 Nursing and Residential Care Facilities 30,000 10,000 20, Source: U.S. Bureau of Labor Statistics YEAR , FIGURE Index 2005of Population, 2006 Health 2007 Care, 2008and Total 2009Employment 2010 Indexed 2011 to , San Diego County (2003 figures = 1.0) 1.5 Employment Health Care Employment INDEX 1.2 Population Source: U.S. Bureau of Labor Statistics. YEAR HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART I 7

8 The two biggest sectors in nursing and residential care facilities skilled nursing (NAICS 62311) and continuing care/assisted living facilities (NAICS 6233) should also see increased employment. The region is projected to experience a significant increase in the number of residents aged 65 and older, the demographic that has the most demand for these services. Wages in these sectors tend to be lower. One possible activity for San Diego economic developers and workforce development professionals is to better understand career pathways in these areas and assist individuals in increasing their skills so they are qualified to move into higher paying professions in health care services. Occupational Forecast It is also possible to disaggregate the health care services sector by occupation and to forecast statewide employment numbers. Table 2 shows forecasts from the state s Employment Development Department for 2020 for the sector s 10 largest occupations. Table 3 lists the sector s 10 occupations forecast to have the most net new openings between now and Table 3 provides the statewide employment outlook for the top 10 healthcare professions in respect to net openings, defined as the sum of job growth in the occupation and the number of current workers expected to reach retirement age between 2010 and TABLE 2. Ten Largest Occupations Forecast, California Health Care Services Sector, 2020 Occupation Forecasted number of jobs Q San Diego County annual median wage Registered Nurses 251,600 $88,212 Nursing Aides, Orderlies, and Attendants 118,900 DATA NOT AVAILABLE Medical Secretaries 97,100 $35,797 Medical Assistants 94,800 $33,717 Home Health Aides 77,500 $24,107 Licensed Practical and Licensed Vocational Nurses 62,100 $49,296 Dental Assistants 47,300 $49,296 Receptionists and Information Clerks 38,900 $27,581 Office Clerks, General 26,500 $31,500 Medical and Health Services Managers 25,100 $110,572 Source: California Employment Development Division TABLE 3. Health Care Services Professions with Largest Predicted Net Increase in Jobs, 2010 to 2020, California Occupation Forecasted change in jobs State of California 2010 to 2020 Q County Annual Median Wage Registered Nurses 47,600 $88,213 Home Health Aides 27,100 $22,963 Medical Secretaries 22,500 $35,797 Nursing Aides, Orderlies, and Attendants 21,800 DATA NOT AVAILABLE Medical Assistants 17,200 $33,717 Licensed Practical and Licensed Vocational Nurses 11,500 $49,296 Receptionists and Information Clerks 8,400 $27,581 Dental Assistants 5,300 $37,211 Medical and Health Services Managers 4,200 $110,573 Physicians and Surgeons, All Other 3,800 $175,427 Source: California Employment Development Division 8 PART I NUSINSTITUTE.ORG SAN DIEGO COUNTY HEALTH CARE SERVICES

9 Economic Impact The health care services sector supports other jobs in the San Diego region. Health care services businesses and workers buy goods and services from other area businesses, indirectly supporting additional employment and economic activity. This cycle repeats itself over and over again as the initial dollars spent circulate multiple times throughout the San Diego economy. To estimate the effect of these recirculating dollars, NUSIPR uses IMPLAN, one of the most widely used models for studying regional economic impacts. One of IMPLAN s biggest advantages is that by tailoring a model to region-specific data, researchers can obtain a more accurate estimation of economic impacts. IMPLAN also disaggregates the impacts between those that are indirect and those that are induced. Indirect impacts are those associated with spending by entities in the health care services sector as they procure goods and services from other businesses in the local economy. Induced impacts are those associated with the spending of wages. We also have made adjustments to avoid double counting, since health care services employment itself causes some demand for health care services. Table 4 shows the direct, indirect, and induced impacts of health care services spending on San Diego County employment. In 2012, every 100 jobs in the health care services sector supported another 63 in the rest of the economy. Table 4 also helps illustrate just how significant the spending of wages by health care services workers is in respect to the overall secondary impacts. As indicated, two induced jobs are supported by the health care services sector for every one job indirectly supported. In total, the sector added more than $17 billion in economic value add to the regional economy in Researchers can also use IMPLAN to measure the impacts of a future increase in demand for health care services. This kind of modeling can be useful to economic developers to help them understand the relative impact they would achieve from different activities and efforts. An increase in spending in the sector could come about, for example, from the introduction of certain health care services that attract patients from outside the region to seek care in San Diego and thus bring new dollars into the region (generation of additional exports). It could also occur if San Diego providers introduction of new products and services reduced the number of San Diegans seeking certain sorts of care and treatment outside of San Diego County (import substitution). Such modeling Table 5 models the economic impact of a $50 million change in demand for health care services in San Diego County in TABLE 4. Economic Impact of Health Care Services in San Diego County, 2012 Impact Type Employment Total Value Added Output (Revenue) Direct Effect 121,510 $9,323,470,064 $15,399,045,740 Indirect Effect 29,201 $2,951,744,134 $4,670,399,307 Induced Effect 57,302 $5,020,907,686 $7,790,191,719 TOTAL 208,013 $17,296,151,883 $27,859,636,767 Source: NUSIPR TABLE 5. Economic Impact of $50 Million Change in Demand, Health Care Services Sector, San Diego County, 2012 Scenario Modeled Direct Jobs Indirect/Induced Jobs Total Jobs $50 million in increased hospital spending $50 million in increased ambulatory care needs Sources: IMPLAN and NUSIPR HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART I 9

10 Part II Special Topics As part of this year s report, NUSIPR is exploring five special topics: (1) the region s economic development advantages in the health care services sector, (2) medical tourism, (3) the relationship between the health care services sector and philanthropy, (4) health care services and construction in San Diego County, and (5) how San Diego County compares to other metropolitan areas with respect to the size of its health care services industry and the wages employers pay. 10 PART II

11 1. San Diego s Economic Development Advantages in the Health Care Services Sector Health care services is a sector that largely serves a region s internal population. 7 Employment is generally determined by population size and by residents demand for health care services. An older population and/or a population with health problems will consume more health care than a younger more healthy set of residents. That is likely why, for example that areas like South Florida that have a high proportion of senior citizens in their population have a relatively high percentage of their workforce employed in the health care services sector. Similarly, a region with a higher percentage of younger adults (and relatively fewer children), such as Las Vegas, tends to consume less health care services and thus sees a lower percentage of the region s workforce employed in this area. The level of employment in health care services also is impacted by the ways that Americans pays for medical care. Higher rates of insurance coverage and higher reimbursement rates, all other things being equal, are likely to lead to a greater number of individuals employed in health care services. That said, there are opportunities at the margins to attract and grow the sector. For example, San Diego can compete for additional health care services investments from the military and the federal government as these investments are not solely determined by endogenous economic and demographic factors. Similarly, regions that have underlying strengths in health care services are more likely to attract and retain programs like the new Center for Medical Interoperability which the San Diego Regional EDC is strongly working to attract that exist at the intersection between the health care services and health care innovation sectors. Moreover, a strong health care services network is vital in maintaining the region s overall health and well-being. A failure to meet the region s health care needs likely has a deleterious impact on workforce productivity and on in-and-out migration flows. Studies of economic development in rural communities have long found a relationship between health care services availability and economic growth, and it is likely that firms in urban areas consider the quality and availability of health care services in their decisions about where to expand and retain operations. 8 San Diego s health care services sector has several economic development strengths that could be leveraged to increase overall regional competitiveness and to attract certain specialized entities. First and foremost, San Diego is clearly positioned as a leader in health care education. The University of California San Diego (UCSD) School of Medicine is among the most highly regarded medical schools in the country and matriculates over 100 medical doctors (MDs) and MD/PhD graduates annually. UCSD Skaggs School of Pharmacy and Pharmaceutical Sciences is also among the nation s best, addressing an important workforce need of both the region s health care services and health care innovation sectors. The region also has several schools of nursing, a vital part of the health care services sector. These schools include National University, Point Loma Nazarene, the University of San Diego, San Diego State University, and California State University at San Marcos. Several San Diego community colleges offer nursing programs, including San Diego City College, MiraCosta College, Mesa College, and Grossmont College. Combined, these educational resources are vital to maintaining health care services quality and access and they provide San Diego an advantage over other regions that need to import a significant number of health care services workers. A second key advantage is the large active military and veteran presence in San Diego County. The Veterans Administration San Diego Healthcare System (VASDHS) operates a 300-bed hospital and five outpatient clinics and serves over 230,000 veterans in the San Diego region. The VASDHS also has one of the largest research programs in the VA nationally. It has an annual budget of $50 million (FY 2013), 193 principal investigators, and 502 projects. 9 In addition, each year hundreds of sailors and Marines discharge from San Diego after having received specialized medical training. This workforce pipeline provides the region an important advantage as it satisfies the sector s demand for highly skilled workers. Third, and a topic that will be explored in much greater depth in subsequent editions of this report, are the synergies between San Diego s health care services industry and the hundreds of San Diego life-science firms and scores of nonprofit research institutions. These synergies create one of the few regions where health care services professionals can simultaneously engage in clinical work, undertake basic research, and commercialize innovations. One topic on which we presently have only anecdotal information, but which will be explored in the future, HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART II 11

12 is the extent to which San Diego benefits more than other regions from the opportunity of patients to participate in early-stage research projects being undertaken by the region s life science innovators. It is also likely the case that San Diego s life science innovators benefit from a workforce filled with thousands of clinicians who can bring practical clinical experience into research laboratories. There are additional synergies with other parts of the region s innovation economy. Wireless technology is becoming more and more ubiquitous in health care services. San Diego is home to the West Health Institute, a consortium of nonprofits, incubators, and early stage financing funds that seek to advance the use of wireless technology in health care. 10 QUALCOMM and other technology innovators are developing products and services in the health care services areas. Baja California is home to more than 27,000 medical device jobs, and the Temecula Valley is home to Abbott Vascular and several other major medical device and medical products companies. 11 Last, but certainly not least, is the advantage that the region has as a center of health care research dollars. Since 2010, the National Science Foundation and the National Institutes of Health have invested an average of $1 billion into research carried out at San Diego institutions (see Table 6). Much of this synergizes with the region s health care services capacity. It is likely that without this research San Diego s health care outcomes would suffer and without excellence in health care services, the region would attract fewer research dollars. Table 6. National Science Foundation and National Institutes of Health Investments in San Diego County: Year National Science Foundation National Institutes of Health , Source: NUSIPR. TABLE 7. San Diego s Accolades for Excellence in Health Care Awardee Year Specifics US News and World Report Hospitals in top 25 in California US News and World Report Hospital top 10 Pediatric Hospital in Nation US News and World Report hospital specialty groups recognized as top 100 in Nation Thompson Reuters teaching hospitals in top 100 in the nation Truven Health Analytics Various 5 hospitals have appeared at least once in list of top 100 hospitals Healthgrades Distinguished Hospitals for Clinical Excellence Various 5 Hospitals received this award in 2013 The Leap Frog Group's Accredition and Standards program area hospitals fully met group's standards Becker's Hospital Review area hospitals in Becker's "100 Great Hospitals in America" Source: NUSIPR. 12 PART II NUSINSTITUTE.ORG SAN DIEGO COUNTY HEALTH CARE SERVICES

13 2. Medical Tourism: Residents from Outside the Region Seeking Care In recent years, economic developers in many regions have identified the promotion of medical tourism as a development strategy. As noted in part 1, every additional $50 million in care provided to individuals living outside the region supports approximately 600 additional jobs in the San Diego economy. Most often medical tourism is thought of as patients traveling internationally to seek care. In a 2008 report, McKinsey & Company estimated that each year between 60,000 and 85,000 foreign nationals travel to the United States to obtain care. Hospitals in Philadelphia and Boston have set up consortiums to work on attracting foreign nationals to seek care. Johns Hopkins Hospital has a stand-alone function to help facilitate the provision of health care services to foreign nationals. 12 Similar functions exist at UCSD and Scripps Health. 13 San Diego s Sharp HealthCare focuses on a specific market: patients who need care who are either traveling to or living in Mexico and has a separate administrative function to support those patients. A less-well-understood market segment is Americans who travel domestically from one region to another to seek care. Several large hospitals and medical centers claim that there is a strong demand for care from out-of-region patients and that this is a sign of their excellence. Both the Texas Medical Center and the Cleveland Clinic, for example, have marketing materials indicating that tens of thousands of patients annually travel from out of state to their locations seeking care. The Mayo Clinic markets heavily its specialized expertise and the well-known patients who travel there to obtain consultations and treatment. Estimating the existing and potential size of the domestic medical tourism market is difficult. There is no nationwide public database on patients that matches home addresses and the location where they received care. While most states have individual data on hospital admissions and discharges, they are subject to privacy restrictions that limit their utility. It is even more difficult to obtain quality data on out-ofarea patients receiving ambulatory care and secondopinion consultations. Nonetheless, there would seem to be opportunities for the region to leverage its nationally recognized leadership in health care services to attract patients from outside the region. San Diego is a desirable location with respect to weather and the accommodations that would be available to a patient s family. Its major hospital networks continue to make large investments in patient care and technology. The region s location on the Pacific Rim and the U.S.-Mexico border should make it a more convenient location for international patients than locations in the country s interior. One initial step toward increasing medical tourism in San Diego would be to collect and aggregate the various awards and accolades the region s hospitals and health care providers have accumulated, shown in Table 7, and use this information to market the region s excellence in health care services. A second step would be for the San Diego Regional Economic Development Corporation and partners in the health care sector to objectively evaluate the value to regions like Houston and Cleveland of using their excellence in health care services as a tent pole for their overall economic development marketing strategies. It could be that medical tourism to these markets is fairly limited. Policies in the Affordable Care Act which encourage more narrow networks of hospitals and doctors may further reduce the ability of patients to seek care outside of their region. However, the reputations of the Cleveland Clinic and Texas Medical Center may provide economic developers with a means of getting out a broader marketing message about those regions commitment to innovation and quality of life. Even if there are few medical tourists attracted to those regions, marketing efforts highlighting a region s world class health care system may have greater economic development marketing benefit than running another advertisement about low permitting costs or the region s business friendly attitude. HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART II 13

14 3. Philanthropy Each year, the generous donations of hundreds of thousands of individuals living in San Diego and throughout the world support San Diego s hospitals and clinics. Philanthropic generosity has allowed San Diego s hospitals and medical service providers to expand treatment options and improve patient care. These donations act in ways similar to how exportoriented businesses bring new money into the region through the export of goods and services to markets outside of San Diego. NUSIPR asked the University of San Diego s Caster Family Center for Nonprofit and Philanthropic Research for assistance in acquiring data on philanthropic donations to the region s health care services organizations. The Center provided IRS tax data, sorted by institution, that identified more than 300 San Diego nonprofits involved in health-related activities. NUSIPR subsequently excluded from the list those that seem principally focused on health-related research or that have a geographic focus well beyond San Diego County. Thirty-eight charities did not receive any reportable grants or donations in 2011, leaving 228 that received in 2011 a combined $428 million. There are 23 entities that received $2 million or more in donations, with nine receiving more than $10 million in Table 8 shows information about these donations in the 2011 tax year. These figures are conservative. They do not include some of the philanthropic donations made to organizations whose mission is broader than just health care services. Moreover, depending on their tax treatment, certain large donations may not be included in the specific tax year we examined even though they were expended by the receiving entity in Given these limitations, we look at these figures as the minimum amount of philanthropy that flowed to health care services organizations in TABLE 8. Philanthropic Donations to Health Care Services Entities, San Diego County, 2011 Tax Year Number of Health Service organizations receiving grants or donations Total grants and donations received by non-profits Average grant/ donation Median total amount of grants and contributions received $465,600,000 $1,894, $57,901 Source: University of San Diego School of Leadership and Education Sciences, Caster Family Center for Nonprofit Research 14 PART II NUSINSTITUTE.ORG SAN DIEGO COUNTY HEALTH CARE SERVICES

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16 TABLE 9. New Medical Office Buildings and Hospital Expansions, San Diego County, Facility Year SQF MEDICAL OFFICE BUILDINGS AND AMBULATORY FACILITIES SYHC Mental Health Center ,018 Makena Medical Center ,000 Kaiser Permanente Bldg ,200 North County Health Services ,000 Loma Alta Village (Building B) ,885 Loma Alta Village (Building A) ,800 Pacific Medical Plaza ,925 4S Health Center ,398 Family Health Centers of San Diego ,398 ECR Corporate Center/Tri City Health ,863 Fallbrook Village Medical Center ,614 Scripps Radiation Therapy Center ,000 Sharp Makena Cancer Center ,000 Bressi Ranch Medical Plaza ,776 Nordahl Medical Center , Pennsylvania Ave ,600 VA Oceanside Clinic ,480 Scripps Proton Therapy Center ,000 CreekView Medical Park complex ,281 Flower Hill Professional Center ,364 Tri City Medical ,476 Shiley Eye Center ,000 Kaiser Carmel Valley ,000 Sharp Rees-Stealy Medical Center - Sorrento Mesa ,000 Sharp Rees-Stealy Medical Center - Downtown ,000 HOSPITALS Palomar Medical Center ,000 Sharp Memorial Hospital ,621 Sculpezio Cardiovascular Center ,000 Source: Cushman & Wakefield of San Diego, Inc. 4. Construction Over the past five years San Diego has seen a significant amount of construction activity in the health care services area. From 2009 through 2013, the county added 979,606 square feet of new medical office space, 11.3% of all office space constructed in the county of San Diego (see Table 9). 14 During that same time, area hospitals added 1.2 million square feet. Major expansions are currently underway at UCSD, Scripps Health, and Kaiser is building a major new hospital in Kearny Mesa. Just prior to 2009, there were major expansions of medical office pavilions in Rancho Bernardo, Carlsbad, and Poway. NUSIPR estimates that every 100,000 square feet of medical office building construction supports 152 direct construction jobs and another 125 indirect and induced jobs. The greater cost of constructing hospitals translates into an even greater economic impact. Construction of 100,000 square feet of hospital space supports 254 direct jobs and another 210 indirect ones. Over the past five years more than 8,000 direct and indirect jobs were supported by capital investments made by the region s health care services providers. These figures do not include any construction undertaken by the military, including major expansions in the health care facilities at several San Diego bases and installations. 16 PART II NUSINSTITUTE.ORG SAN DIEGO COUNTY HEALTH CARE SERVICES

17 5. Comparisons with Other Major Metro Areas San Diego s health care services sector is somewhat smaller than that found in other larger metropolitan areas, even after adjusting for some unique attributes of the data and accounting for the relatively large share of health care provided to residents of our county through the Veterans Administration and the U.S. Department of Defense. It also lags behind the nation in respect to the percentage of the workforce employed in health care services and as a percentage of the population (3.7%). One reason for the relatively low proportion of workers in the health care services sector in San Diego when compared to the rest of the United States or other major metro areas is likely that San Diego skews slightly younger than many large U.S. metropolitan areas. As we age, we tend to consume more health care services, and there is some correlation between the percentage of elderly individuals in the metro area and the number of people employed in the health care services industry. Figure 3 displays this data as a scattergram. FIGURE 3. Large U.S. Metropolitan Statistical Area. Percentage of Population Age 65 and Older and % of Total Employment in Health Care Services Sector; % OF POPULATION AGES 65 AND OLDER Source: U.S. Bureau of Labor Statistics and US Census % OF TOTAL EMPLOYMENT IN HEALTHCARE SERVICES HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART II 17

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19 TABLE 10. Health Care Services Sector Employment in Large U.S. Metropolitan Areas, 2012, Private Sector Employment Only Metropolitan Statistical Area Heatlth Care Services Ambulatory Care Hospitals Nursing and Long Term Care Facilities % of Total Employment Cleveland-Elyria-Mentor, OH 141,384 46,016 62,774 32, % 6.9% Boston-Cambridge-Quincy, MA-NH 308, , ,274 60, % 6.6% Pittsburgh, PA 155,460 64,347 55,444 35, % 6.6% Seattle-Tacoma-Bellevue, WA 146,785 72,697 47,380 26, % 6.2% Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 361, , ,930 90, % 6.0% Baltimore-Towson, MD 163,686 59,507 70,217 33, % 5.9% St. Louis, MO-IL 161,081 55,342 72,870 32, % 5.8% Minneapolis-St. Paul-Bloomington, MN-WI 193,281 77,774 58,130 57, % 5.6% Detroit-Warren-Livonia, MI 227,577 92,043 96,293 39, % 5.3% Tampa-St. Petersburg-Clearwater, FL 140,982 65,721 44,153 31, % 5.0% New York-Northern New Jersey-Long Island,NY-NJ-PA 980, , , , % 4.9% Chicago-Naperville-Joliet, IL-IN-WI 439, , ,008 86, % 4.6% Orlando, FL 98,261 44,064 35,422 18, % 4.4% Phoenix-Mesa-Scottsdale, AZ 183, ,523 53,874 28, % 4.2% Miami-Fort Lauderdale-Miami Beach, FL 244, ,206 71,583 43, % 4.2% Washington-Arlington-Alexandria, DC-VA-MD-WV 225, ,652 70,210 46, % 3.8% Houston-Baytown-Sugar Land, TX 237, ,085 74,745 29, % 3.8% Los Angeles-Long Beach-Santa Ana, CA 489, , ,368 93, % 3.7% San Francisco-Oakland-Fremont, CA 166,591 90,740 43,438 32, % 3.7% San Diego-Carlsbad-San Marcos, CA 118,482 59,918 34,813 23, % 3.7% Atlanta-Sandy Springs-Marietta, GA 189,436 76,738 72,085 40, % 3.5% Riverside-San Bernardino-Ontario, CA 114,221 57,054 34,984 22, % 2.6% U.S. TOTAL 15,854,541 6,423,647 6,031,210 3,399, % 5.1% Source: US Bureau of Labor Statistics. Calculations and estimates from NUSIPR % of Health Care Services Employment to Total Population HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART II 19

20 TABLE 11. Selected Metro Areas, % of Total Employment in Health Care Services and % of Population 65 and Older, 2012 Metropolitan Statistical Area % of Total Employment in Health Care Services % of Population Age 65 and Older New York-Northern New Jersey-Long Island,NY-NJ-PA MSA 12% 13.60% Los Angeles-Long Beach-Santa Ana, CA MSA 9% 11.70% Chicago-Naperville-Joliet, IL-IN-WI MSA 11% 12.00% Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA 14% 13.86% Boston-Cambridge-Quincy, MA-NH MSA 13% 19.46% Miami-Fort Lauderdale-Miami Beach, FL MSA 11% 16.30% Houston-Baytown-Sugar Land, TX MSA 9% 9.20% Detroit-Warren-Livonia, MI MSA 13% 13.90% Washington-Arlington-Alexandria, DC-VA-MD-WV MSA 8% 10.62% Minneapolis-St. Paul-Bloomington, MN-WI MSA 11% 11.40% Atlanta-Sandy Springs-Marietta, GA MSA 9% 9.87% Phoenix-Mesa-Scottsdale, AZ MSA 11% 18.45% San Francisco-Oakland-Fremont, CA MSA 8% 13.30% Baltimore-Towson, MD MSA 13% 13.30% St. Louis, MO-IL MSA 13% 14.10% Pittsburgh, PA MSA 14% 17.71% Seattle-Tacoma-Bellevue, WA MSA 9% 11.56% Cleveland-Elyria-Mentor, OH MSA 14% 15.89% Tampa-St. Petersburg-Clearwater, FL MSA 13% 17.98% San Diego-Carlsbad-San Marcos, CA MSA 9% 11.96% Riverside-San Bernardino-Ontario, CA MSA 10% 11.04% Orlando, FL MSA 10% 13.03% Source: U.S. Bureau of Labor Statistics and US Census Another contributing factor (see Table 11) to the relatively low percentage of the workforce employed in the sector is likely the slightly larger percentage of the population not currently covered by health insurance (16.4% in San Diego and an average of 14.5% among large U.S. metros.) 15 The wages paid in San Diego s health care services sector are similar to those of other large metro areas and slightly above national averages. For example, in 2012, ambulatory care workers earned an average wage in San Diego of $63,692 compared to the national average of $55,955. With respect to hospitals, the national private sector average was $55,500 compared to an average of $64,600 in San Diego. Table 12 shows the average annual wages and employment in ambulatory care for large U.S. metro areas in 2012; Table 13 shows the average annual wages and employment in hospitals in selected U.S. metro areas for Table 14 shows the average annual wages and employment at nursing and long term care facilities in selected U.S. metro areas for PART II NUSINSTITUTE.ORG SAN DIEGO COUNTY HEALTH CARE SERVICES

21 TABLE 12. Average Annual Wages and Employment in Ambulatory Care, Large U.S. Metro Areas, 2012 Metropolitan Statistical Area Employment at Ambulatory Care Offices and Facilities Average Annual Wage San Francisco-Oakland-Fremont, CA 90,740 $78,688 Boston-Cambridge-Quincy, MA-NH 113,145 $66,881 Washington-Arlington-Alexandria, DC-VA-MD-WV 108,652 $65,119 Minneapolis-St. Paul-Bloomington, MN-WI 77,774 $64,085 San Diego-Carlsbad-San Marcos, CA 59,918 $63,692 Pittsburgh, PA 64,347 $62,835 Orlando, FL 44,064 $62,818 Seattle-Tacoma-Bellevue, WA 72,697 $59,634 Tampa-St. Petersburg-Clearwater, FL 65,721 $59,320 Baltimore-Towson, MD 59,507 $58,846 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 134,102 $58,407 Phoenix-Mesa-Scottsdale, AZ 100,523 $58,284 Los Angeles-Long Beach-Santa Ana, CA 255,144 $58,191 Chicago-Naperville-Joliet, IL-IN-WI 180,925 $55,318 Riverside-San Bernardino-Ontario, CA 57,054 $55,136 Cleveland-Elyria-Mentor, OH 46,016 $54,426 Miami-Fort Lauderdale-Miami Beach, FL 129,206 $54,293 Detroit-Warren-Livonia, MI 92,043 $54,250 New York-Northern New Jersey-Long Island,NY-NJ-PA 453,679 $52,769 Houston-Baytown-Sugar Land, TX 133,085 $49,834 Atlanta-Sandy Springs-Marietta, GA 76,738 ND St. Louis, MO-IL 55,342 ND U.S. TOTAL 6,423,647 $55,995 Source: U.S. Bureau of Labor Statistics Note: ND=Not disclosed by BLS per confidentially regulations. HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART II 21

22 22 PART I

23 TABLE 13. Average Annual Wages and Employment in Hospitals, Selected U.S. Metro Areas, 2012 Metropolitan Statistical Area Employment at Hospitals Average Annual Wage Pittsburgh, PA 55,444 $47,857 Orlando, FL 35,422 $48,454 Tampa-St. Petersburg-Clearwater, FL 44,153 $49,911 St. Louis, MO-IL 72,870 $50,383 Atlanta-Sandy Springs-Marietta, GA 72,085 $51,748 Miami-Fort Lauderdale-Miami Beach, FL 71,583 $54,791 Detroit-Warren-Livonia, MI 96,293 $55,689 Chicago-Naperville-Joliet, IL-IN-WI 172,008 $56,032 Baltimore-Towson, MD 70,217 $56,228 Houston-Baytown-Sugar Land, TX 74,745 $57,664 Phoenix-Mesa-Scottsdale, AZ 53,874 $58,028 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 136,930 $59,458 Washington-Arlington-Alexandria, DC-VA-MD-WV 70,210 $59,725 Minneapolis-St. Paul-Bloomington, MN-WI 58,130 $60,617 Riverside-San Bernardino-Ontario, CA 34,984 $62,174 San Diego-Carlsbad-San Marcos, CA 34,813 $64,651 Los Angeles-Long Beach-Santa Ana, CA 140,368 $66,658 New York-Northern New Jersey-Long Island,NY-NJ-PA 332,924 $69,150 San Francisco-Oakland-Fremont, CA 43,438 $89,843 Boston-Cambridge-Quincy, MA-NH 134,274 ND Seattle-Tacoma-Bellevue, WA 47,380 ND Cleveland-Elyria-Mentor, OH 62,774 ND U.S. TOTAL 6,031,210 $55,502 Source: U.S. Bureau of Labor Statistics Note: ND=Not disclosed by BLS per confidentially regulations. HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG PART II 23

24 TABLE 14. Average Annual Wages and Employment at Nursing and Long Term Care Facilities, Selected U.S. Metro Areas, 2012 Metropolitan Statistical Area Employment at Nursing and Long Term Care Facilities Average Annual Wage St. Louis, MO-IL 32,869 $24,026 Tampa-St. Petersburg-Clearwater, FL 31,108 $27,577 Houston-Baytown-Sugar Land, TX 29,334 $27,648 Orlando, FL 18,775 $27,673 Riverside-San Bernardino-Ontario, CA 22,183 $27,733 Phoenix-Mesa-Scottsdale, AZ 28,976 $28,021 Chicago-Naperville-Joliet, IL-IN-WI 86,306 $28,121 San Diego-Carlsbad-San Marcos, CA 23,751 $28,646 Miami-Fort Lauderdale-Miami Beach, FL 43,222 $29,367 Los Angeles-Long Beach-Santa Ana, CA 93,830 $31,282 Baltimore-Towson, MD 33,962 $31,356 Washington-Arlington-Alexandria, DC-VA-MD-WV 46,373 $31,847 Boston-Cambridge-Quincy, MA-NH 60,930 $33,387 San Francisco-Oakland-Fremont, CA 32,413 $33,703 New York-Northern New Jersey-Long Island,NY-NJ-PA 193,442 $35,993 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 90,379 ND Detroit-Warren-Livonia, MI 39,241 ND Minneapolis-St. Paul-Bloomington, MN-WI 57,377 ND Atlanta-Sandy Springs-Marietta, GA 40,613 ND Pittsburgh, PA 35,669 ND Seattle-Tacoma-Bellevue, WA 26,708 ND Cleveland-Elyria-Mentor, OH 32,594 ND U.S. TOTAL 3,399,684 $27,505 Source: U.S. Bureau of Labor Statistics and US Census 24 PART II NUSINSTITUTE.ORG SAN DIEGO COUNTY HEALTH CARE SERVICES

25 END NOTES 1. U.S. Bureau of Labor Statstics. Quarterly Census of Employment and Wages. 2. We derived this estimate from estimates from the May 2013 National Industry-Specific Occupational Employment and Wage Estimates ( That data indicates that physicians comprise 6.13% of payroll employment the Ambulatory Health Care Services sector. That would suggest that in 3,930 physicians are payroll employees of Ambulatory care facilities. We then used a 2011 study done by the San Diego County Medical Association ( The Total Economic Impact of Physicians in San Diego County: $5.4 to $7.6 Billion ; which estimated that that 5,750 physicians work in San Diego in San Diego County in Large-Group, small group, or in solo practitioners, a figure derived from surveys conducted by the American Medical Association. If one assumes that these sources are compatible, that would lead to an estimate of 1,820 physicians working in San Diego in non-payroll positions (limited partners, sole practitioners, etc. etc.). 3. Ibid. 4. For more information on this sector see 2013 Southern California Life Science Economic Impact Report, Collatoral/FINAL%202013%20Report.pdf. 5. This explosive rate of growth may be slowing. Initial figures from 2013 indicate a significant slowing. Health care economists are divided as to whether this slowdown signals a fundamental change or simply reflects the sluggish economic performance in the broader economy. 6. California HealthCare Foundation, California Heath Care Almanac 2012, 7. See the next section for a discussion of an exception. 8. See for example, George M Holmes, Rebecca T. Slifkin, Randy K Randolph, and Stephanie PoleyHealth Service Research; Apr 2006; vo. 41, no. 2: pgs U.S. Department of Veterans Affairs, About the VA San Diego Healthcare System, ( va.gov/about/index.asp) last accessed April, West Health, Fideicomiso Empresarial del Estado de Baja California, The Tijuana-San Diego Bio Border: On the Frontier of Medical Device Manufacturing, Johns Hopkins Medical International, International Patient Services at Johns Hopkins, UC San Diego Health System, International Services at UC San Diego Health System, ucsd.edu/specialties/international/pages/default.aspx; Scripps Health San Diego, Visiting Patient Services, Correspondence from Dan McCarthy, Cushman and Wakefield of San Diego, March 6, It is also likely that the percentage of employment in health care services is below national averages in part because of the greater percentage of Californians that are enrolled in HMOs. HMOs and provider networks have long focused on delivering care more efficiently and, given the high proportion of health care dollars that go toward personnel costs, it intuitively makes sense that employment in regions with a high HMO enrollment would see lower health care services employment numbers State HMO Penetration Rate, Kaiser Family Foundation, HEALTH CARE SERVICES SAN DIEGO COUNTY NUSINSTITUTE.ORG (858) END NOTES 25

26 A Private Nonprofit University Serving the Public Good NUSINSTITUTE.ORG (858) PART I NUSINSTITUTE.ORG SAN DIEGO COUNTY HEALTH CARE SERVICES