Whitepaper: Beyond Patient Care: Economic Impact of Pennsylvania Hospitals, Fiscal Year 2019

Introduction

Hospitals provide access to a broad scope of health care services, including 24-7 emergency care, highly specialized medical services and procedures, and medical education to train the next generation of clinicians. Members of The Hospital and Healthsystem Association of Pennsylvania (HAP) also pledge to care for all, regardless of patients’ ability to pay.

COVID-19 has left devastating health and economic consequences across the commonwealth, especially in the state’s rural communities. Absent a public hospital system, Pennsylvania’s hospitals and health systems provide critical infrastructure that supports public health, coordinating emergency preparation, management, and response; addressing community health needs; and serving as a safety net health care provider.

Hospitals directly impact their communities’ economies in many ways— maintaining and constructing new buildings; providing jobs; purchasing medical supplies, pharmaceuticals, and medical equipment; etc. Hospitals also indirectly impact the economy through business interactions with organizations from other industries, such as employment and cleaning services. Finally, hospitals induce economic activity outside of the hospital—in such industries as real estate, financial investment firms, and restaurants. They also attract federal research dollars to the state, enabling Pennsylvania to develop innovations that improve care for all Americans.

The analysis examines the hospital community’s economic impact on individual regions of the state and on Pennsylvania as a whole. It assesses the effects of hospital spending and employment, documenting that hospitals are among the largest employers across the commonwealth. It also recognizes the role hospitals play in attracting federal and quasi-public research dollars and the broader benefits hospitals provide by training tomorrow’s clinicians and providing charity and unreimbursed care.

While the analysis of this fiscal year (FY) 2019 data demonstrates a robust contribution to the economy, the magnitude of the COVID-19 pandemic will fundamentally alter the data for FY 2020.

Findings from this paper should be used to inform policy discussions about topics that affect long-term hospital sustainability, including but not limited to hospital funding, promoting health equity, prior authorization reform, telemedicine service reimbursement, credentialing process streamlining, adequate Quality Care Assessment support, and bolstering Pennsylvania’s health care workforce.

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Topics: Regulatory Advocacy, State Advocacy

Revision Date: 12/18/2020

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