Study: Missouri hospitals vital to creating jobs, increasing state GDP

Saturday, October 29, 2011 | 5:36 p.m. CDT

COLUMBIA — In a time of economic unease, Missouri hospitals seem to be recession-proof. Missouri hospitals have created 265,000 jobs and increased gross state product by $18.8 billion, an MU professor's research found.

“If you imagine the economy without that kind of steady growth contributed by the hospital sector, the recession would have been deeper, and we wouldn’t have had a continued flow of income and jobs,” said Tom Johnson, the Frank Miller Professor of Agricultural Applied Economics at the Truman School of Public Affairs.

Johnson’s study analyzed data from every hospital in the state of Missouri by region. Missouri hospitals account for 6 percent of the state’s economy and another 4 to 5 percent indirectly.

According to his research, the central Missouri region created 27,799 jobs and a $1.6 billion impact on the economy.  The region includes Audrain, Boone, Callaway, Camden, Cole, Cooper, Crawford, Dent, Gasconade, Howard, Laclede, Maries, Miller, Moniteau, Morgan, Osage, Phelps, Pulaski and Washington counties.

Missouri hospitals attract many out-of-state patients, which brings extra revenue to the hospitals. Johnson’s study found this medical tourism created 45 jobs in central Missouri and increased Missouri’s gross state product by $1.4 million. 

“There are few very highly specialized cancer treatment centers around the country, and Missouri hospitals have some of them,” Johnson said. “They are a big attraction for out-of-state patients.”

Missouri hospitals have an even greater stabilizing effect on the economy in rural areas, Johnson said.

“If you compare metropolitan economies with rural economies, the average job in the rural area is at a lower wage rate, requires lower skills and is a smaller contribution to the economy,” Johnson said. “It is true hospital jobs are very similar in rural and urban areas, but if you compare jobs in rural areas, the hospital jobs are relatively better.”

The hospital sector does not fluctuate like other sectors might, Johnson said.

“A lot of our health care expenditures we can’t change because of the economy,” Johnson said. “Our need determines how much we go the hospital.”

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