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University of Iowa News Release


Nov. 1, 2006

Hospitals Boost Local, State And National Economy

Hospitals in Johnson County employ 9,682 workers, making the group of hospitals the county's largest employers with a total economic impact of $586,911,801, according to a study from the Iowa Hospital Association (IHA).

Three hospitals are located in Johnson County, including Mercy Iowa City, University of Iowa Hospitals and Clinics and Veterans Affairs (VA) Iowa City Health Care System.

"Mercy Hospital exists to meet the needs of patients in our area," said Ronald R. Reed, president & CEO of Mercy Iowa City. "The area hospitals are fortunate to have benefited from the growth of area businesses. When businesses expand, they employ more people. And when more people move to the area, the hospitals respond to their health needs. We are fortunate to live in the technology corridor."

According to the IHA study, Iowa's health care sector directly and indirectly provides 355,374 Iowa jobs, currently equal to one-fifth of the state's total employment. The health care sector includes hospitals, employed clinicians, long-term care services and assisted living centers, pharmacies, and other medical and health services.

"These figures are truly extraordinary," said Donna Katen-Bahensky, director and CEO of UI Hospitals and Clinics. "They certainly speak volumes about the important roles that our hospitals play in the economic vitality of our communities."

The IHA study found that Iowa hospitals directly employ 69,416 people and create another 79,316 jobs outside the health care sector, or so-called "spin-off" jobs. Johnson County hospitals create 3,850 "spin-off" jobs.

"These facts and figures emphasize just how significant a role health care plays in the overall economy at all levels across the country," said Barry Sharp, medical director of the VA Iowa City Health Care System. "I believe most people realize the direct impact health care organizations have on them personally, but are not aware of the increasing percentage the health care sector has on the overall economy. The fact that I find most amazing is the increasing number of spin-off jobs created by the direct patient care organizations."

It is a success story that might be news to some, but the health care sector is now driving the U.S. economy and "has become the main American job program for the 21st century," as was reported in a recent issue of BusinessWeek magazine.

With more than $2 trillion in spending, "health care is propping up local job markets in the Northeast, Midwest and South, the regions hit hardest by globalization and the collapse of manufacturing," BusinessWeek reported. The magazine reported that with the housing market faltering, the strength of the health care economy may well save the nation from recession. "In August, health-services employment rose by 35,000, double the increase in construction and far outstripping any other sector," the publication's reporters noted.

Statewide, Iowa's community hospitals generate nearly 149,000 jobs that add more than $5 billion to the state's economy, the study found. In addition, Iowa hospital employees by themselves spend $1.8 billion on retail sales and contribute more than $88 million in state sales tax revenue.

"Iowa hospitals tend to be one of the largest employers in their communities," said Kirk Norris, IHA president. "Hospitals are essential partners for existing businesses and an important component to bringing more industry to Iowa and improving the state's economic future."

As an income source, Iowa hospitals provide $2.9 billion in salaries and benefits and generate almost another $2.2 billion through other jobs that depend on hospitals.

STORY SOURCE: Mercy Iowa City, University of Iowa Hospitals and Clinics, VA Iowa City Health Care System.

CONTACTS: Tim Ahlers, 319-688-7340,; Tom Moore, 319-356-3945,; Kirt Sickels, 319-338-0581, ext. 7104,