Whitepaper: Beyond Patient Care: Economic Impact of Pennsylvania Hospitals, Fiscal Year 2020

Introduction

Pennsylvania’s hospitals provide access to a broad scope of health care services, including 24-7 emergency care, highly specialized medical services, procedures, and medical education to train the next generation of clinicians. Members of The Hospital and Healthsystem Association of Pennsylvania (HAP) also contribute to cutting-edge research and medical innovations while pledging to care for all people regardless of patients’ ability to pay.

Hospitals directly impact their communities’ economies in many ways—by maintaining and constructing new buildings, providing jobs, as well as purchasing medical supplies, pharmaceuticals, and medical equipment. 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 services, and hospitality. They also attract federal research dollars to enable Pennsylvania to develop innovations that improve care for all Americans.

Since the onset of the pandemic during 2020, COVID-19 has greatly impacted the health and economy of the commonwealth. Pennsylvania has seen more than one million (1,122,399) COVID-19 confirmed cases and 28,568 COVID-19 related deaths.1 The financial toll of the pandemic for Pennsylvania’s hospitals through March 2021 has been estimated to be nearly $6.5 billion due to lost revenue associated with decreased utilization and increased costs.2 Absent a public hospital system, Pennsylvania’s hospitals and health systems provide critical infrastructure that supports public health. They address community health needs and serve as safety net health care providers. They also coordinate emergency preparation, management, and response.

This analysis examines how, even during the COVID-19 pandemic, the hospital community continued its vital economic role regionally and across the state. It assesses the effects of hospital spending and employment, documenting that hospitals remain among the largest employers across the commonwealth. It also recognizes the role hospitals play in attracting federal research dollars and the broader benefits hospitals provide by training tomorrow’s clinicians and offering charity and unreimbursed care.

Findings from this paper should be used to inform policy discussions surrounding topics that affect long-term hospital sustainability. This includes, but is 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: Federal Advocacy, State Advocacy

Revision Date: 10/6/2021

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