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The Contributions of Health Care Services to the Wisconsin Economy with a Focus on Hospitals

EXECUTIVE SUMMARY

The intent of this study is to update prior analysis documenting the contribution of hospitals to the Wisconsin economy. For this update we use the most recently available data (2016) and expand the analysis to also consider non-hospital related health care sectors.

  • The health care sector remains one of the fastest growing sectors in the U.S. and Wisconsin. Employment in the health care sector in Wisconsin grew by 29.6 percent from 1998 to 2017, while total employment grew by 12.3 percent. Employment in hospitals grew by 24.0 percent over the same period. Nationally, health care sector employment grew by 49.0 percent, hospital employment by 27.9 percent and total employment grew 23.8 percent, also over the same period.
  • The Great Recession strongly affected employment growth in hospitals and the recovery has been modest. The Great Recession had only modest impacts on the growth of employment in the broader health care industry.
  • Growth in wages and salary has been strong since 1998 with some evidence of a dampening effect from the Great Recession when Wisconsin is compared to the national average. The typical wage and salary job in Wisconsin paid $38,848 in 2017 (an increase of 61.8% from 1998), but in the broad sector of health care, the typical wage and salary job paid $52,788 (an increase of 82.3% from 1998) and the typical hospital job paid $57,253 (a 95.5% increase). This is a reflection of the large share of occupations in health care, and hospitals in particular, that require higher levels of education.
  • Compared to national averages, hospitals remain a relative strength for the Wisconsin economy with a Location Quotient of about 1.13 (greater than 1 indicating a strength).
  • After accounting for the multiplier effect, the health care sector contributes almost 571,900 jobs (15.6% of total Wisconsin employment), $32.67 billion in labor income (17.1% of state total), $45.19 billion in total income (14.4% of state total), and $74.41 billion to industrial sales/revenue (11.9% of state total).
  • Hospitals contribute almost 209,400 jobs (5.7% of total Wisconsin employment), $12.13 billion in labor income (6.3% of state total), $17.3 billion in total income (5.5% of state total), and $30.62 billion in industrial sales/revenue (4.9% of state total).
  • The state and local government tax revenues generated by that economic activity is $1.06 billion for hospitals and $1.99 billion for non-hospital related health care for a total of $3.06 billion.
  • For every additional ten jobs created in hospitals an additional nine jobs are created elsewhere in the Wisconsin economy. For every $1,000 of additional labor income created in hospitals an additional $600 of labor income is created elsewhere in Wisconsin and for every $1,000 in additional revenue generated by hospitals an additional $860 industrial sales/revenues is generated.

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