Medical Center serves as economic engine for the region

September 05, 2006
Many in this region think of New Hanover Regional Medical Center as simply a place to seek care when they are sick or injured. But the medical center serves another vital role in Southeastern North Carolina. It is an economic engine for the region, providing high-level professional jobs, purchasing goods and services that propel other businesses and helping attract other industry. With an overall impact of almost $1.2 billion annually in New Hanover County alone, an argument can be made that New Hanover Regional is as important to the economic health of the region as it is to the physical health of its patients. This economic role is crucial as the Wilmington area strives to attract the kind of jobs that will drive economic growth in the 21st century. Many of the region’s most attractive professional and management positions are available because of the presence of a thriving medical center. Measuring the medical center’s economic impact can be done on many levels. First, the hospital employs 4,570 people and will pay them $209 million in FY 2006. That’s money that gets spent, and taxed, on goods and services, or is invested in the local community. The hospital is the largest employer in the region and along the Interstate 40 corridor to Raleigh. New Hanover Regional is also projected to spend about $23 million locally on supplies, utilities, purchased services, rent, and repairs and maintenance. Many businesses sustain themselves by supplying the hospital. The medical center recently embarked on a four-year building project, investing $220 million in this community. Many of those working on this project will live here, eat here, shop here and spend money here, all of which will contribute to the local tax base. Another economic component is the businesses that rely on the presence of the hospitals and its employees. A quick drive down 17th Street, past its multiple restaurants, office buildings and hotel, illustrates this point. The N.C. Department of Health and Human Services, Office of Research, Demonstrations and Rural Health Development has developed a method to quantify the impact of health care on North Carolina counties. Using 2003 numbers, the project determined that New Hanover Regional’s impact on New Hanover County alone included:
  • $857.9 million worth of estimated value of goods and services resulting from NHRMC’s presence
  • $338.8 million worth of payroll, to include wages and benefits. This includes hospital employees, plus those whose employment depends on the hospital. With an estimated 66 percent of personal income spent in retail stores, hospital-related payroll resulted in purchases that brought an estimated $14.5 million in sales tax to New Hanover County.
  • 8,325 employees, full- and part-time, attributed to NHRMC or related to its presence in the county economy.
  • The total impact, then, was $1.196 billion, and the overall impact of all health services, including physician practices, pharmacies and other related businesses that would not locate here without a strong medical center, hit $2.8 billion in New Hanover County. All those numbers have grown substantially in the subsequent three years. There are still other important ways to measure the economic impact of New Hanover Regional on the region. While, as a non-profit organization, the medical center pays no property taxes, it will provide $33 million worth of charity care this year and another $58 million of care for which it does not collect, for an overall total of $91 million in uncompensated care. Another $14 million is contributed to provide services at no cost to the community – such as VitaLine, the 24-hour free nurse telephone service, and a pharmacy that provides medications for the poor – or to subsidize services it provides at a loss, such as trauma and psychiatric care. The medical center receives no local tax subsidy for any of its services. New Hanover Regional keeps the region’s workforce well and back on the job, and the presence of a first-rate medical center is a requirement before any major industry would think of locating in Southeastern North Carolina. Finally, retirees consider the quality of a community’s health care before settling on a place to live So while New Hanover Regional is proud to be measured in terms of the quality of health care it provides, the community should be aware of the economic health it provides as well.