The economic impact of north country hospitals

Feb. 2--LOWVILLE -- Of course Lewis County General Hospital's role is about providing quality health care, but as the largest employer in the county, it's also about more.

"We exist, I believe, for two reasons. The first reason is to provide health services," hospital CEO Gerald Cayer said, "When you reach a certain point... another purpose emerges and that's economic benefit."

The hospital's health care system makes an estimated $114 million annual economic impact, according to the Healthcare Association of New York State's annual report released earlier this month, while operating on an $83 million budget.

"This validates our important economic standing in the county," Mr. Cayer said, adding that the number is even more exciting because it is $1 million more than last year's estimate, indicating the "positive impact beyond service" the hospital has on the community.

Mr. Cayer said the easiest way to understand that impact, which includes the economic ripple effect that radiates out from the health care provider, is to imagine the businesses, sales, products, services and transactions that would not exist "if the hospital tomorrow is gone." The value of those things would total $115 million in the first year.

Those ripple effects also create about 1,000 jobs beyond the 700 full-and part-time employees that work directly at the hospital, the Association estimated. The annual payroll for the hospital's direct employees is $49 million, money which is spent "downstream," Mr. Cayer said, helping to create the larger economic impact.

"The health care system has a positive impact well beyond simply providing healthcare and paying employees," Mr. Cayer said, "This report helps the broader community to understand the important role of the local health system."

The economic impact and job estimates given in the report for hospitals around the state, including those in Jefferson and St. Lawrence counties, do not provide a good measure to compare hospitals, Mr. Cayer said, because their characteristics vary, like the populations they serve, their proximity to other hospitals and the services they provide, among others.

The nine hospitals in the tri-county area range from a $5.3 million economic impact by the smallest hospital, Clifton-Fine in Star Lake, to the $419 million estimated impact by Samaritan Medical Center in Watertown, the largest hospital. The number of indirect jobs created range from 200 to 2,300 from those hospitals, respectively.

Other information provided in the report includes the number of outpatient visits, emergency room visits and, where appropriate, the number of patients admitted and babies delivered in each hospital.

The percentage of Medicaid and Medicare reimbursement is the one measure, as a percentage, that is useful for comparison between the hospitals.

The hospitals with the highest percentage of payment by federal insurance were Clifton-Fine with 74 percent, Lewis County with 67 percent and River Hospital in Alexandria Bay with 60 percent.

Claxton-Hepburn Medical Center in Ogdensburg has the lowest percentage of Medicaid and Medicare payments at 41 percent, followed by Canton-Potsdam Hospital with 43 percent and Carthage Area Hospital with 45 percent.

The report also supplied numbers for the community benefit and investments made by private hospitals. Massena and Lewis County hospitals were not included in this measure because publicly owned hospitals do not file this information according to an Association spokesperson.

That range was between $912,000 and $43 million by Clifton-Fine and Samaritan, respectively.

The estimates produced in the Association's report used 2018 data provided by hospitals like their income, expenses, assets and liabilities on their annual Institution Cost Report used by the Department of Health, the spokesperson said.

Economic impact and job numbers were arrived at using standard "regional multipliers" developed by the federal Bureau of Economic Analysis.

The Association provides "leadership, representation and service to not-for-profit and public hospitals, nursing homes and other healthcare organizations throughout New York state," according to its website, including advocating on policy issues in Albany and Washington and providing education, data analysis and operational assistance to member hospitals.

To browse the full economic impact results, go to https://www.hanys.org/government_affairs/community_benefit/

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