Health Care – an Economic Contributor

By Dick Baltus

It doesn’t take an economics degree to understand that local jobs are the lifeblood of any community, especially those of the small, rural variety.

In rural areas, hospitals are typically near or atop the list of a community’s largest employers. In Roseburg, CHI Mercy Health, with its approximately 1,100 employees, is the No. 1 employer. In all of Douglas County, it’s second only to Roseburg Forest Products.

Needless to say, Mercy makes a significant contribution to the economic health of Roseburg and surrounding communities. Its payroll contributes nearly $90 million to local families and, in turn, the local businesses that benefit from employee support.

But it’s more than just the payroll number. The dollars employees earn from working for Mercy have a ripple effect that spreads deep into the Douglas County communities in which they live. As CHI Mercy President and CEO Kelly Morgan says, “The wages we pay have an economic multiplier that produces a profound impact on our regional economy. The wages we pay our people get reinvested in our community when they buy new houses or cars or go to the grocery store or pay their taxes”

Indeed, according to a 2017 report by the American Hospital Association on the economic contributions of hospitals, every dollar spent by a hospital supports $2.30 of additional business activity in the community.

In addition, for every job in the hospital industry there are another two “ripple-effect” jobs in local communities created. These could be anything from jobs in local business that support Mercy’s activities to the restaurants that serve Mercy employees.

Having a strong healthcare community also bodes well for the future of any community’s economy. As members of the enormous Baby Boomer generation continue to age into their retirement years and consider relocating to other communities, the state of local healthcare is one of their primary considerations. Having a state-of-the-art hospital like CHI Mercy and a robust medical staff of 120 active providers (and some 300 altogether) makes Douglas County, with its many other quality of life benefits, a very attractive retirement destination.

That bodes well for local businesses that cater to their needs, whether it’s senior-living facilities, durable medical equipment suppliers or other care providers, such as dentists and optometrists.

The challenge for Mercy in the coming years is how to continue to expand to meet the growing healthcare needs of the community (and continue injecting dollars into the local economy) while addressing the increasing financial pressures it and hospitals nationwide are facing.

With the continued decline in the amount of funding that states and the federal government provide hospitals for caring for Medicaid and Medicare patients, simply maintaining profitability has become a significant challenge.

This is especially true in smaller, rural hospitals like CHI Mercy, which care for fewer commercially insured patients than their urban counterparts. In addition, patients in rural community hospitals typically are poorer, older and sicker than patients in larger cities and require more healthcare resources.

As these pressures have mounted over the years, CHI Mercy Health has worked diligently to maximize the use of its resources and increase its efficiency in order to ensure Douglas County residents continue to have access to the highest-quality healthcare without having to leave their communities.

Of course, one of the keys to keeping the local economy healthy is to continue supporting local businesses, including the local hospital. Every time a patient heads out of town for the same care that is available locally, it’s a double hit to the economy – the local hospital loses needed revenue as do all the business benefiting from the ripple effect.

“We’ve worked hard to expand our medical community to ensure people don’t have to leave town except in the rarest of circumstances,” Morgan says. “Probably 95 percent of care that any Douglas County resident will need in his or her lifetime is available from Mercy and our medical staff. It’s only the most highly specialized care that isn’t economically feasible for us to provide that requires a trip out of town. We’re doing everything we can to keep people local for their care. It’s not just good for the future of CHI Mercy, it’s good for the economic future of all of Douglas County.”

Photos provided by CHI Mercy Medical Center