an additional 95 cents of indirect output is generated in the state over and above each dollar of direct output created in the practice of medicine. Indirect output captures the value of revenues generated by other businesses as a result of the office-based physician industry, e.g., the sale of equipment to an office or the sale of laboratory services related to a physician visit.
• Texas’ office-based physicians supported 249,010 jobs in 2009. On average, each office- based physician supported 5.8 jobs, including his or her own. The employment multiplier in Texas is 1.91, meaning that 91 additional jobs, above and beyond the clinical and administrative personnel that work in physician practices, were supported for each $1 million of revenue a physician practice generated.
• Physician offices contributed $39.4 billion in direct and indirect wages and employee benefits in 2009. On average, each physician supported $924,413 in total wages and benefits. This includes the payroll multiplier, which concludes that an additional 50 cents in wages and benefits was generated for every dollar of direct employee compensation within the industry.
• Physician offices supported nearly $2.1 billion in local and state tax revenues in the year 2009. The total tax contribution is computed
by summing taxation on employee income, proprietor income, indirect business interactions, households, and corporations.
Key in communities large and small
Looking at the economic impact of physician practices by metropolitan statistical area (MSA), the Lewin Group reported that doctors’ offices in the Houston and Dallas-Fort Worth areas each accounted for more than 65,000 jobs and more than $10 billion in annual wages and benefits. In the economically stressed border region from Brownsville to Laredo and on to El Paso, physicians’ offices contribute $2.4 billion per year in economic output and support nearly 14,000 jobs.
The financial value of a physician’s practice has even been measured in some of Texas’ tiniest towns. Hemphill County (population 3,807) contracted to determine the value of recruiting a primary care physician to its Panhandle community.
The Hemphill County report concluded, “… [Prima- ry care physicians’] economic contributions are as important to a community as their medical contri- butions.” Specifically, the study found:
One solo rural primary care physician generates approximately $1 million in revenue, $1.6 million in income (wages, salaries, benefits, and propri-
Economic Impact of a Solo Rural Primary Care Physician: Clinic & Hospital Activities7 Direct Revenue
Clinic
Hospital Total
Clinic
Hospital Total
Clinic
Hospital Total
$416,170 $864,841 $1,281,011
Direct Payroll $316,175 $499,878 $816,053
Direct Employees 4
12.5 16.5
Multiplier 1.23 1.21
Multiplier 1.13 1.16
Multiplier 1.23 1.25
Secondary Impact $95,719 $181,617 $277,336
Secondary Impact $41,103 $79,980 $121,083
Secondary Impact 1 4 5
Payroll includes wages, salaries and benefits, and proprietor income, when applicable. July 2012 TEXAS MEDICINE 55
Total Impact $511,889
$1,046,458 $1,558,347
Total Impact $357,278 $579,858 $937,136
Total Impact 5
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