Report: Hospitals and nursing homes add billions to state economy

CHEYENNE —  A new report released Thursday found that the direct value added annually to the state’s economy by hospitals and nursing homes is nearly $2.6 billion.
 
The contribution analysis was commissioned by the Wyoming Hospital Association and its for-profit subsidiary, and was conducted independently by the University of Wyoming’s Center for Business and Economic Analysis in 2022.
 
Along with the direct value added to Wyoming’s gross domestic product (GDP), experts found significant impacts in other areas.
 
Hospitals and nursing homes create more than $79 million in state tax revenue, and approximately $520 million in county, state and federal taxes combined.They also support 32,000 jobs, and the 68 hospitals and nursing homes show a total employee compensation of just over $1 billion annually.
 
“It’s no secret hospitals are often the largest employers in our communities,”said Wyoming Hospital Association President Eric Boley in a statement. “WHA has long emphasized the importance of maintaining a strong and sustainable health care infrastructure for both the physical health and economic health of our state. The data shows the impact is even greater than we thought.”
 
WHA Vice President Josh Hannes told the Wyoming Tribune Eagle the report was commissioned to show the extent to which their facilities are drivers of local economies and the state economy. They knew hospitals are the top three to five employers in most Wyoming communities, but the association wanted concrete information when talking with residents, local government officials and policymakers about the industry.
 
He said the timing of its publication also connected to their perception that health care is struggling. Examples he provided were an inability to hire, a lack of being reimbursed appropriately for services, having an insufficient amount of operating capital on hand, or difficulties with health care access and availability to residents.
 
“We just want to be able to communicate in a meaningful way with everyone that health care access and the delivery of care is important in the state, and we have some real challenges,” Hannes said. “But also that this is an industry worth protecting and fighting for because of all the value it adds to the state.”
 
When considering the business-to-business and household- to-business spending associated with hospitals and nursing homes included in the report, the total economic contribution of the industry is 3.5% of Wyoming’s total economy.
 
David Aadland is the director of UW’s Center for Business Economic Analysis, and was a part of the team that conducted the economic analysis. He said the percentage is significant, despite seeming small on a surface level, because there are many different sectors that make up an economy.
 
He also noted the impact the closure of one hospital or nursing home would have.
 
He said shutting one down in the grand scheme of things wouldn’t have a large effect on the state’s GDP and gauged it would be much less than 1% decrease — but the communities would take a hit in their access to services and economic vitality.
 
“This report illustrates the importance of hospitals in Wyoming — and the devastating consequences to local economies should one of our member hospitals or nursing homes permanently close,” said Tim Thornell, WHA board chair and Cheyenne Regional Medical Center CEO.
 
Thornell leads the highest contributor in the state for hospital employee compensation, with Cheyenne Regional Medical Center paying out $233.4 million annually. His hospital is followed by the Wyoming Medical Center in Natrona County at close to $112 million and Teton County’s St. John's Hospital with nearly $64 million in employee compensation.
 
Although hospitals and nursing homes in rural areas don’t contribute hundreds of millions in labor income or value added like areas with larger populations, they are viewed as indispensable by the WHA vice president. There has yet to be a rural hospital closure, but a rural nursing home was lost in 2022.
 
Hannes said it is scary to think about the consequences of losing those facilities.
 
He said he hopes this will be taken into account when walking into the Wyoming Legislature to negotiate policies.
 
He said there has been doubt and criticism placed on the health care industry since the pandemic, because the hospitals were required to adhere to rules and legislation in the name of public safety.There were comments calling them “profit-motivated,” but he said the $120 million annually in uncompensated care, thin operating margins and services provided don’t reflect that.
 
“We want to be clear, in addition to the provision of health care and keeping people healthy, or if they’re sick, helping them heal — that there is a business case to making sure hospitals are protected and strong moving forward,” Hannes said.
 
This story was published on April 21, 2023.