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Kentucky Hospitals Important Engines for Regional-Local Economies
Jackson Purchase Medical Center in Mayfield is one of the economic drivers in the Purchase.

(February 1, 2008) - The Kentucky Hospital Association has just released a report showing how Kentucky's 120 hospitals contribute nearly $4.9 billion to the state's economy each year. According to the report, economic impact is driven by payroll and purchasing supplies and services.

Paul Coomes, PhD Professor of Economics in the College of Business, University of Louisville and the author of the report, said, "This economic power represents 3.5 percent of Kentucky's gross state product. Hospitals are primarily about health, healing and wellness. They are places to conduct medical research, fight disease, treat addictions, respond to trauma, repair broken bodies, usher people into the world, and ease the pain of those departing.

However, hospitals are also hubs of employment, payers of wages, purchasers of goods and services, and generators of tax revenue. The importance of hospitals to our communities is really something that can't be overstressed," said Frank Bulter, chairman of the Kentucky Hospital Association board.

Local hospitals will be able to use the data on their specific facilities for recruitment and economic development purposes, while the KHA will share the statewide data with legislators. The data could be handy in confronting any budget cuts.

Mike Rust, President of KHA, said funding is always an issue. Rust also made the point that 72% of hospitals patient revenue comes from government programs.

Rust said, "We know we're in a very tight budget situation. We are very, very dependent on what happens in Washington and Frankfort." A large portion of Kentucky's economic activity would not exist without hospitals. Kentucky's hospitals make a tremendous contribution to the state's economy and financial well-being of the communities they serve.

Details of the report emphasized the economic importance of Kentucky's acute care hospitals to the communities they serve.

The report found that Kentucky's acute care hospitals:

  • Employ 65,000 full-time equivalent personnel;
  • Rank 7th highest among other industries in Kentucky in terms of jobs, but 5th highest in wages and salaries;
  • Provide $3.3 billion in annual compensation to its employees;
  • Contribute directly nearly $4.8 billion in new output annually to the State and local economies -- about 3.5 percent of the Gross State Product;
  • Support other businesses when they purchase the goods and services needed to provide care, with around $2 billion in purchases from other Kentucky firms annually; and
  • Are responsible for $515 million in annual tax revenues to state and local governments in Kentucky.

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