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Study: Hospital generates $14.9 million locally




Whitesburg Appalachian Regional Hospital spends about $14.9 million each year on staff salaries and on the purchase of local supplies and services, according to a new study prepared for the Kentucky Hospital Association.

“It is very eye-opening when you get to see the economic impact that the hospital has to the community,” said Ellen Wright, chief executive officer of WARH. “It’s not that the community only needs the hospital for their services they provide and the health care they provide, but is a major economic driver as well. It actually has a larger impact than I imagined.”

According to the recently released study, $7.5 million is generated into the community as the result of WARH and its employees buying products at the local level.

According to the study, the Whitesburg hospital spends about $3.5 million for goods and services from local businesses in addition to WARH employees spending about $3.9 million in local purchases.

“These dollars definitely have a ripple effect. The dollar turns over basically ten times in the economy,” said Joy Freeman, ARH director of health policy and government relations. “Every time that happens it is a huge impact on the community as a whole. We are the largest employer in the area besides the school system.”

The study says WARH contributes $1.8 million in state and local tax revenue. The Kentucky Medicaid program received about $774,000 in provider taxes from WARH. The hospital’s provider tax supports $2.6 million in Medicaid spending when matched with federal funds.

According to the study, about 38 percent of WARH patients are covered by Medicaid or Medicare.

The study calculated that if WARH received a 10 percent cut in Medicaid, Medicare or other programs, it would reduce hospital em ployee wages and salaries by $1.1 million and would result in lost jobs. This would mean a loss of $4.1 million in regional sales and a $1.4 million reduction in regional wages and salaries.

WARH pays about $1 million each year in income and employee sales tax.

Freeman said one of ARH’s goals is to serve all patients regardless of income levels.

In 2006 WARH spent $1 million in treating patients without insurance whose income was below the federal poverty level.

The study was conducted by Paul Coomes, Ph.D. Professor of Economics and Barry Kornstein, senior research analyst, of the University of Louisville.

“Our local payroll here is about $11 million. We have 266 jobs in the community, which are valuable to say the least,” said Freeman.

In 2006, WARH cared for 494 babies and treated 14,551 people in the emergency room. The Whitesburg hospital treated 3,927 inpatients and had 34,204 outpatient visits.


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