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Georgia hospitals contribute $47.8 billion to state economy, directly and indirectly support jobs

Despite that, many Georgia hospitals continue to face a number financial challenges resulting in cutbacks and fewer services.

Jeff Lagasse, Associate Editor

Children's Hospital of Georgia in Augusta (Google Earth)Children's Hospital of Georgia in Augusta (Google Earth)

Hospitals played a huge role in bolstering Georgia's economic health by pumping nearly $47.8 billion into the state's economy in 2015, according to a recently released report by the Georgia Hospital Association. The findings also revealed that hospitals supplied more than 141,000 full-time jobs and indirectly created nearly 344,000 jobs in the state.

Yet despite their importance to the state economy, many Georgia hospitals continue to face a number financial challenges that have resulted in reduced services and employee cutbacks. Since the beginning of 2013, six Georgia hospitals have closed, and others -- especially those in rural areas -- are struggling to keep their doors open.

According to the most recent Georgia Department of Community Health Hospital Financial Survey, 42 percent of all hospitals in Georgia had negative total margins in 2015, while 68 percent of rural hospitals in the state lost money in the same year.

[Also: See which hospitals earned an 'A' from Leapfrog]

A huge strain on hospital finances continues to be the explosive growth of uncompensated care. According to the GHA study, in 2015, Georgia hospitals absorbed more than $1.74 billion in costs for care that was delivered but not paid for.

"Throughout Georgia, hospitals are the only source of medical care for most uninsured residents," said GHA President and CEO Earl Rogers in a statement. "Add to that a growing number of residents who actually have insurance but cannot pay their high insurance deductibles, and hospitals end up absorbing even more losses. These dynamics are not sustainable long term."

A recent study by the Kaiser Commission on Medicaid and the Uninsured found that in 2015 Georgia had the second highest percentage of uninsured residents in the country at 14 percent.  Only Texas, with 16 percent, had a higher uninsured rate. To make matters worse, Medicaid pays Georgia hospitals, on average, only about 87 percent of actual costs, meaning hospitals lose 13 cents on every dollar spent treating a Medicaid recipient.

[Also: See which hospitals earned an 'F' from Leapfrog]

The report also showed that the presence of a hospital is a major source of jobs in any given community, both directly and indirectly. In 2015, Georgia hospitals employed 141,350 people. But when an employment multiplier is applied, it indicates that hospitals supported nearly 344,000 full-time jobs in the state. The employment multiplier considers the "ripple effect" of direct hospital expenditures on the economy, such as medical supplies, durable medical equipment and pharmaceuticals and several different retail establishments that depend on the hospital and its employees for business.

The hospital economic impact report also measured hospitals' direct economic contributions to Georgia's working families. Using a household earnings multiplier, the study determined that hospitals generate over $15.2 billion in household earnings in the state. The household earnings multiplier measures the increased economic contributions from individuals employed directly or indirectly by hospitals through daily living expenditures.

Twitter: @JELagasse

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