Physicians generate trillions in economic activity
By Erin Redwine
A study released in February shows the important contributions physicians make to the local, state, and national economies. “The State-Level Economic Impact of Office-Based Physicians,” published by the American Medical Association, illustrates the direct economic benefit office-based physicians provide through caring for patients and creating jobs, purchasing goods and services, and supporting state and community public programs.
Findings reveal the office-based physician industry supports $1.4 trillion in total economic output, 4 million jobs, $833 billion in wages and benefits, and $63 billion in total state and local tax revenues. Each office-based physician or physician practice generates an average $2.3 million in output, 6.2 jobs, $1.3 million in wages and benefits, and $100,000 in state and local tax revenues.
Compared to other industries, the study found office-based physicians to almost always generate a greater economic impact than the legal, college, home health, hospital, or nursing industries.
“Although physicians are primarily focused on providing excellent patient care, physician offices and the jobs and revenue they produce are significant contributors to national and state economies,” said AMA President Cecil Wilson, M.D., in an AMA article on the study. “This study illustrates that office-based physicians contribute to both the health of their patients and also to the economic health of their communities.” Texas has more than 42,000 practicing physicians, the second highest number in the country, making it one of the leading states supported by office-based physicians. In 2011, office-based physicians in Texas generated approximately $63.6 billion in economic output, $40 billion in wages and benefits, and $2.1 billion in state and local tax revenues. In 2008, Texas physicians provided almost $24.4 billion in charity care on a nationwide basis.
“Texans benefit directly when the state creates a positive practice environment for physicians,” according to a joint release by AMA and the Texas Medical Association. “By attracting and keeping physicians in the state, the people of Texas have better access to health care and a stronger state economy.”
Researchers analyzed more than 638,000 office-based physicians practicing in the United States as of October 2010. Economic impact was measured across four variables: output, jobs, wages and benefits, and tax revenue. Both direct and indirect effects were included when calculating the total economic impact and data were used from three primary sources: the AMA masterfile, MGMA cost survey, and IMPLAN modeling system.