Across Missouri, hospitals anchor regional economies

This article was published in the May issue of Missouri Business magazine.

To care for another person. To make others well again. To heal illness and lift the well-being of an entire community.

To Mark Laney, MD, working in health care is nothing short of a sacred profession.

“The level of commitment, care, engagement, achievement and excellence displayed by our caregivers across the organization is nothing short of amazing,” said Dr. Laney, president and CEO of Heartland Health and Mosaic Life Care. “Our corporate culture is one that we hold dear. We do sacred work.”

Courtesy of Mosaic Life Care.

Courtesy of Mosaic Life Care.

Dr. Laney preaches this message to the caregivers who serve patients at Heartland Regional Medical Center in St. Joseph along with dozens of clinics in the region.

Dr. Laney’s team handles about 17,000 inpatient visits each year and nearly one million combined outpatient and clinic visits. Even with that quantity, Heartland Health and Mosaic Life Care leaders are focused on quality, reflected by the numerous national accolades it has earned in recent years.

But the Heartland Health and Mosaic Life Care system — like health systems statewide — is more than a health-care provider. It’s a powerful economic engine.

In 2013, the health system had more than 3,800 employees on staff and its annual payroll was more than $232 million. Economic multipliers translate that investment into a nearly $390 million benefit to the local economy. Even more, ongoing construction projects are injecting more than $44 million into the region.

As a large employer and corporate citizen, Heartland Health and Mosaic Life Care are making major contributions toward the prosperity of the communities and region they serve.

“Because of its nature, the majority of the jobs at Heartland Health and Mosaic Life Care are high-skilled and above-average-pay to high-pay jobs,” said Brad Lau, senior vice president of economic development at the St. Joseph Chamber of Commerce. “These jobs obviously have a multiplier effect in the community in terms of housing and other goods and services.”

The same holds true in communities across Missouri, where hospitals serve as anchors for health and growth.

Statewide, hospitals provide employment to more than 152,000 Missourians. In 2012, annual wages were $7.5 billion, with an additional $1.9 billion in provided benefits.

But hospitals’ impact on the state’s economy goes well beyond basic employment statistics. That’s just the tip of the syringe.

“Hospitals are here to serve a community need — making people better,” said Herb Kuhn, president and CEO of the Missouri Hospital Association. “In succeeding at this mission over the decades, our hospitals have become indispensable employers, key corporate citizens and catalysts for local development.”

Economic magnet

For nearly 20 years, the Kansas City Chiefs held their pre-season training camp in River Falls, Wisc. But in the late 2000s, the Chiefs were looking to move closer to home, eventually choosing St. Joseph.

Courtesy of the Kansas City Chiefs.

Courtesy of the Kansas City Chiefs.

It was a major economic win for the city, which started hosting the Chiefs’ training camp in 2010. Each year, tens of thousands of fans fill the city to watch practices and see the football stars up close. They stay in local hotels, eat at local restaurants and use other St. Joseph services.

In choosing St. Joseph, the strong football facilities at Missouri Western State University (MWSU) were a major plus. But having such an advanced hospital in the city was also a deciding factor.

“There is no doubt that without a trauma center and advanced MRI and X-ray equipment just minutes from MWSU, the Kansas City Chiefs would not have considered St. Joseph for its Summer Training Camp, simply because it had to have those services in the event a team member was injured during practice,” said Lau, with the St. Joseph chamber.

It’s not just sports. Leaders across many industries make health care a major consideration when searching for sites for relocation and expansion.

Lau said he often touts Heartland Health and Mosaic Life Care when meeting with growing companies.

“It gives companies an assurance that the community has a key resource to maintain the health and well-being of their employees, can provide occupational medical services, and more importantly, will provide wellness and preventative services so their employees are productive in the workplace,” he said.  It gives companies a sense that St. Joseph has a secure environment in which to grow and expand their business in terms of capital investment.”

The same conversations are happening in communities around the state. Fortunately, Missouri’s economic development officials have a lot to brag about.

St. Louis and Kansas City are home to major health systems and hospitals that draw patients nationally and from abroad — medical tourism is a $1.6 billion industry in Missouri. Springfield, Columbia and other regions also boast nationally-recognized providers. With strong hospitals in every direction, most Missourians are never far from the care they need.

“We are fortunate to have 155 hospitals in Missouri,” Kuhn said. “Because medical issues often require urgent attention, having a high-performing hospital nearby is clearly one a community’s most important assets.”

In addition to improving the health of a region and providing a resource for local employers, hospitals also have a way of enhancing a region’s entire economy.

They provide good jobs, they bring patients to town and they regularly expand and remodel, boosting several industries along the way.

A December 2013 study by the Missouri Hospital Association estimated that in addition to the people actually employed by hospitals, 140,982 additional Missouri jobs were either created indirectly by hospitals or induced by hospital investment.

These jobs netted Missouri workers an additional $5.8 billion in wages in 2012. The industries that see the greatest gains from strong local hospitals are real-estate, food service, employment services and wholesale trade.

The study found that every Missouri hospital job creates another 1.12 jobs in businesses across Missouri.

That’s two-for-one growth. Not a bad prescription for an economy still in recovery mode.

New pressures

When the national recession hit Missouri, the impact was widespread. Like the rest of the nation, the job losses in Missouri were hardest felt in industries such as construction and manufacturing.

In fact, every sector in Missouri saw declines, except for one: the combined education and health services sector. Hospitals were a major factor.

While the rest of the state was headed toward losing more than 111,000 jobs, hospitals actually added 16,000 jobs.

Even as the recession lifts in many industries, Missouri hospitals are actually finding themselves under greater strain today than before. The new pressure comes as Missouri’s hospitals are wedged in the middle of the ongoing debate over the federal Affordable Care Act.

“Hospitals were far from immune from the effects of the recession. However, their continued hiring during these years provided a great stabilizing effect in many Missouri communities,” said Kuhn. “With nearly $4 billion in federal payment cuts between 2013 and 2019, hospitals are now shedding jobs and reducing investment. These cuts were designed to be offset by new revenue from individuals purchasing insurance in the marketplace and through Medicaid. In Missouri, this new coverage isn’t materializing.”

Missouri lawmakers have refused to accept offered federal funding to bring Medicaid coverage to the state’s low income workers. The effects of this decision are amplified in rural areas, where hospitals not only provide access to care but also offer some of the best employment opportunities for local residents. Today, some of these hospitals are in danger. This is a big problem.

Compared to urban areas where residents have easy access to clusters of hospitals, rural providers commonly serve broad regions. In fact, 41 of Missouri’s 115 counties are without a hospital today, meaning many rural residents must drive out of county to receive care.

Preserving Missouri’s network of rural hospitals is a concern today as many of these providers are facing unprecedented financial strain due to industry changes and the state’s unwillingness to accept additional Medicaid funding.

And if small rural hospitals falter, local economies would feel the blow.

Another pressure felt by all Missouri hospitals, large and small, is increasing costs for uncompensated care. In contrast to most industries, hospitals large and small are all bound to provide care for everyone who needs it, regardless of their ability to pay.

As the recession hit and unemployment increased, thousands of Missourians were losing their access to health insurance. However, they were still going to their local emergency departments when they needed care. In many cases, hospitals ended up absorbing the cost of caring for the newly uninsured.

In 2012, scenarios like this amounted to more than $1.17 billion in uncompensated care provided by Missouri hospitals.

Supporting communities

Yet even as Missouri’s hospitals experience financial strain, numbers show they continue to be key supporters of their local communities, giving to charities and leading efforts to improve health.

In St. Joseph, Heartland Health and Mosaic Life Care sponsor a number of local causes. Education for 4th grade students in 22 schools and a weight-loss competition that has helped more than 16,000 people in northwest Missouri lose more than 90,000 pounds, among other efforts, link the health system to community members.

“Heartland Health and Mosaic Life Care is very civic minded. It encourages its employees to be engaged in the community,” Lau said.  “The system is generous in its financial support of economic development, the arts and other non-profit entities that foster its mission and make St. Joseph a better place to live and work.”

This kind of work happens statewide. In 2012, Missouri’s hospitals provided more than $1.3 billion in educational efforts, donations and community support. That commitment to community health reflects an understanding among hospital leaders that preventing illness is often the best way to treat it.

That helps ensure a healthier Missouri for tomorrow, with the promise of lowering rates of illness and lessening insurance costs for employers. In many ways, stronger hospitals lead directly to a stronger economy for all Missourians.

“When we think about the health of our state’s citizens and the health of our economy, we believe both ideas converge around our hospitals,” said Kuhn.

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