SPECIAL REPORT What Health Care Means for Texas’ Fiscal Health
From the giant Texas Medical Center to a solo practitioner in a tiny Panhandle hamlet, physicians’ practices fuel the economic engines that grow Texas. The economic benefit of doctors’ offices goes beyond the hundreds of thousands of direct jobs they support, including the quite-quantifiable ripple effect of those jobs and tax dollars through the local economy. It also takes in health care’s obvious, but somewhat less tangible, contribution to Texas’ continued economic development.
Health care is a vital component of the Texas economy, generating tens of billions of dollars in revenue each year and providing hundreds of thousands of jobs. For example, the 49 hospitals and other institutions that make up the Texas Medical Center in Houston employ more than 93,000 people.1
Indirectly, the Texas Medical
Center generates some $14 billion for the Houston economy.2
Industry
Office-based physicians Colleges and universities* Nursing homes and
residential care facilities Hospitals Legal
Home health
Industry Total Output, Jobs, and Wages & Benefits in Texas, 2009 Output ($ in millions) $63,556 $9,375 $13,225
Jobs
249,010 64,376 159,836
$66,314 $40,949 $15,627
*Includes junior colleges and professional schools
For the entire Houston metropolitan area, however, physicians’ offices have an even greater impact. More than 11,000 office-based physicians generate $16 billion per year for the local economy, comprising more than $10.6 billion in wages and benefits.3
The U.S. Census Bureau has identified
offices and clinics of medical doctors, osteopathic physicians, and other health practitioners as the third largest employment sector in Texas.4
The ripple effect of physicians’ practices
An April 2011 study the Lewin Group conducted for the American Medical Association put dollar figures on exactly how much doctors’ offices
54 TEXAS MEDICINE July 2012
contribute to the Texas economy. That report found that Texas office-based physicians generate significantly more economic output (i.e., medical and non-medical sales revenues) than the legal industry; produce more jobs than colleges, universities, and nursing homes combined; and pay more in wages and benefits than all the Texas hospitals.5
The Lewin Group concluded that, in Texas:
• Office-based physicians created a total of $63.6 billion in direct and indirect economic output in 2009. The output multiplier for office- based physicians in Texas is 1.95, meaning
293,940 151,227 220,172
Wages & Benefits ($ in millions) $39,392 $3,457 $6,403
$24,082 $12,597 $5,767
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