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University of Iowa News Release


March 1, 2007

Hospitals Provide Big Economic Boost

Hospitals in Johnson County employ 9,888 workers, making the group of hospitals the county's largest employers with a total economic impact of $669,133,329, 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 the Department of Veterans Affairs (VA) Iowa City Health Care System.

In addition, employees at those hospitals spend $251,012,397 on retail sales and contribute $12,550,620 in state sales tax revenue.

"These facts and figures emphasize just how significant a role health care plays in the overall economy at all levels across the country. 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," said Barry Sharp, VA Iowa City Health Care System Medical Director.

The IHA study examined the jobs, income, retail sales and sales tax produced by hospitals and the rest of the state's health care sector. The study was compiled with software that other industries have used to determine their economic impact.

"Mercy Hospital exists to meet the needs of patients in our area. 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," said Ronald R. Reed, president & CEO, Mercy Iowa City.

The study found that Iowa hospitals directly employ 70,320 people and create another 80,174 jobs outside the health care sector. As an income source, hospitals provide $3.1 billion in salaries and benefits and generate almost another $2.2 billion through other jobs that depend on hospitals.

"The economic impact of our hospitals here in Iowa City extends well beyond the county line," Donna Katen-Bahensky, director and CEO of University of Iowa Hospitals and Clinics. "Our employees live outside the county and we serve patients from across the state, the region and even the globe."

Statewide, community hospitals provide more than 150,000 jobs that add $5.3 billion to the state's economy, according to the IHA report. In addition, Iowa hospital employees spend $1.7 billion on retail sales and contribute more than $84 million in state sales tax.

"As a major employer and business partner, Iowa hospitals are critical to the well-being of the state's economy," said Kirk Norris, IHA president. "A strong health care system, anchored by community hospitals, is essential as Iowa continues to look for opportunities to expand and grow its economy."

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

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

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