Medical schools, teaching hospitals have strong economic punch
Academic medical centers such as the Brody School of Medicine are major economic contributors, according to a new study.
(Feb. 2, 2007)
The Brody School of Medicine at East Carolina University contributed to an estimated $14 billion economic impact in North Carolina in 2005, according to a new report from the Association of American Medical Colleges.
The economic boost was 10th highest in the nation, where academic medical centers combined for a $451 billion impact on their states and the nation in 2005, the AAMC said.
North Carolina's medical schools and major teaching hospitals are directly and indirectly responsible for more than 108,000 full-time jobs. The Brody School of Medicine employs 1,954 full-time faculty and staff with payroll expenses totaling $153.4 million, officials said.
"Having been at the medical school for over 20 years and seeing truly dramatic growth in Greenville and the region, I can't help but feel the presence of a dynamic medical school like the Brody School of Medicine is a huge contributor to that growth," said Dr. Nick Benson, vice dean of the school. "Very frequently, I am told by members of the general public the growth around us is directly attributable to the medical school."
Nationally, the report found the 125 accredited U.S. medical schools and more than 400 major teaching hospitals represented by the AAMC employ approximately 1.6 million people and are directly and indirectly responsible for more than 3 million full-time jobs -- one out of every 48 wage earners in the United States.
The overall economic impact of institutions such as the Brody School of Medicine on the North Carolina and national economies takes into account the direct and indirect business volume generated by medical schools and teaching hospitals, including institutional spending; employee spending; and spending by patients, their families, and visitors. According to the report, every dollar spent by a medical school or teaching hospital indirectly generates an additional $1.30 when it is "respent" on other businesses or people, resulting in a total impact of $2.30 per dollar.
North Carolina's medical schools and teaching hospitals also generated more than $547 million in state tax revenue in 2005 through income and sales taxes, corporate income taxes, and capital stock/franchise taxes paid by businesses that collect revenue from state institutions.
In addition, ECU's medical school and other N.C. academic medical centers generated more than $510.1 million in out-of-state medical visitor-related revenue in 2005, including direct spending in local communities by out-of-state patients and their friends and families.
The AAMC report, "The Economic Impact of AAMC-Member Medical Schools and Teaching Hospitals," does not include the economic impact of patient care-related spending at hospitals, nor does it account for the economic benefits of physician-training programs and community service programs. This report was prepared for the AAMC by the consulting firm Tripp Umbach.
For a copy of this report, go to www.aamc.org/economicimpact