CONTRIBUTION OF HOSPITALS TO NORTH DAKOTA'S ECONOMY

Community hospital administrators in North Dakota were surveyed to determine the amount and type of expenditures made to North Dakota entities in 1997. Estimates of net revenues retained within the state were also solicited. Forty-two of the 44 community hospitals in the state responded. Economic activity from hospitals in the state was divided into two groups--community hospitals and all hospitals. In-state expenditures for Federal and Native American facilities were generated from survey results. Expenditures and returns (direct impacts) from community hospitals in the state were about $832 million in 1997. When the six military, Veteran, state, and tribal hospitals were included, industry-wide direct impacts increased to $904 million. Input-output analysis was used to estimate the secondary economic effects. In-state spending by community hospitals and all hospitals was estimated to generate an additional $1.5 billion and $1.7 billion in secondary economic activity, respectively. Gross business volume (direct and secondary effects) attributable to community hospitals in 1997 was estimated at $2.4 billion, while all hospitals were estimated to generate $2.6 billion in the state. Community hospitals and associated facilities (i.e., nursing homes, clinics) in the state were estimated to directly employ 14,013 full-time equivalent positions. Secondary employment resulting from the business activity created by community hospitals was estimated at 36,174 full-time equivalent jobs. Direct and secondary employment attributable to community hospitals represented 14.8 percent of total state employment in 1997. Direct and secondary employment by all hospitals in the state was estimated at 15,355 and 39,921 full-time equivalent jobs, respectively. Direct and secondary employment attributable to all hospitals represented 16.3 percent of all state employment. Community hospitals and all hospitals were also responsible for about $43.5 million and $48.9 million in state-collected tax revenues, respectively. Comparisons to previous estimates of the economic importance of hospitals revealed that the economic contribution of all hospitals in the state has increased in real terms (inflation adjusted) since 1991, despite reductions in the number of hospitals and hospital beds. Gross business volume, adjusted for inflation, for all hospitals was $1.7 billion in 1991. Equivalent estimates for all hospitals in 1997 was nearly $2.4 billion. Hospitals accounted for about 8 percent of economy-wide personal income and 7 percent of state retail sales. In addition, direct and secondary employment from all hospitals (not including clinics and nursing homes) accounted for 15.4 percent of North Dakota's employment in 1997. Hospitals in the state generate a substantial amount of economic activity and continue to be an important contributor to the state's economy