Health care, higher ed sustain economy

Development Strategies Inc. presented the results of study at the Springfield Area Chamber of Commerce on Aug. 22.

Health care has a $4.5 billion economic impact on the Springfield metropolitan area economy annually, according to the study, while higher education contributes nearly $900 million a year.

The impact of the two sectors on employment is even more telling. The area’s two dominant medical centers employ 19,500 people, according to the survey, and generate an additional 31,800 jobs in the area. Higher education employs 6,800 and creates 6,700 more jobs.

Those 64,700 jobs are roughly equivalent to the sum of the 49 largest employers in the Springfield metro area, which comprises Greene, Christian, Dallas, Polk and Webster counties.

Only the retail sector, with its 13.1 percent of local workers, employs more people in the area than health care’s 11.6 percent share of the work force.

“It is clear these two major economic sectors play an above-average role in supporting the metro Springfield economy,” the report states.

Both sets of numbers are conservative estimates. The figures on education do not include other purchases – food, clothing, entertainment, etc. – made by students coming into the area.

The health care numbers only include CoxHealth and St. John’s – the only two institutions that provided information for the study. Independent health care providers also did not participate.

The study is the second the chamber has sponsored. Results of a similar study on local agribusiness, released in November 2005, showed a total economic impact of about $3.2 billion in the five-county area.

Following the money

One of the most important features of both economic sectors, according to the study, is that they draw large numbers of people – and large amounts of revenue – from outside the area.

The study shows 30 percent of health care patients and more than 25 percent of higher education students come from outside of the metro area.

“Health care has a very strong ‘location quotient’ compared to the national economy, indicating that it is a crucial sector for attracting income to metro Springfield,” the report states.

The health care sector also produces the largest portion of personal income for the region; health care workers account for 11.1 percent of total income, according to figures from the U.S. Department of Commerce.

The study notes that since the second-largest producer of jobs is the largest producer of income, health care jobs pay more than average. The average health care worker in the Springfield area makes $47,300, while median household income in the area is about $30,000, according to the U.S. Census Bureau.

That trend should continue in the future, according to Development Strategies President Robert Lewis, as the demand for health care jobs continues to outpace supply.

Meeting the need

The study also made predictions on growth in need in the two sectors statewide.

Higher education is expected to grow by about 25 percent between 2002 and 2012, slightly higher than the 19.4 percent growth predicted for Missouri employment as a whole.

Health care employment is another story; need in that sector is expected to grow by more than 60 percent during that time.

The education community is going to be responsible for supplying many of those workers. It’s a challenge for which Chamber President Jim Anderson says the community is prepared.

“It already is happening – there have been some great strategic alliances formed, and I think you’ll see more in the future,” he said.

Examples are training programs between CoxHealth and MSU, and St. John’s and Southwest Baptist University. Both hospitals also have their own schools of nursing.

Jim Baker, vice president for research and economic development at Missouri State University, is chairman of the chamber’s higher education and health care task force, which commissioned the study for $27,000.

He said that because the two sectors are dependent on each other, efforts must be made to strengthen both.

“We’re going to spend a lot of time with the presidents of the universities and the heads of health care … to make sure we provide a work force that will sustain the health care sector of this region,” Baker said.

“It’s in all of our best interests to make sure that stays a strong part of our economy.”[[In-content Ad]]