A new economic impact report commissioned by the Health System Alliance of Arizona reveals that Arizona hospitals had a $30 billion statewide economic impact in 2018. Despite this enormous figure, the report indicated it could be quite conservative since hospitals serve as a catalyst for other healthcare-related employment, both on and off-campus. The report, conducted by Rounds Consulting Group, measured the overall economic impact to the state through direct, indirect and induced jobs. 

“Hospitals have been known as a major employer throughout the state, but the findings in this report show how embedded the industry is in Arizona’s economy,” Health System Alliance of Arizona Executive Director Jennifer Carusetta said. “Our hospitals not only provide a critical economic foundation, but will also be a key economic driver moving forward. We are proud to play a role in making Arizona a better place to live, work and raise a family.” 

The findings of the report include:

• The total economic impact of Arizona hospitals in 2018 was $29.8 billion.

• Arizona hospitals had a total employment impact of 184,969 jobs – approximately 7% of the state’s total 2.9 million workers. 

• The direct, indirect, and induced jobs earned a combined $12.3 billion in wages. 

• State and local governments collected $808.7 million in tax revenues from hospitals.

• Construction activity provides a boost to the local community. For example, the construction of a 100,000 square foot building (which is approximately the size of a rural health clinic) provides a total economic impact of $82.0 million.

• In some regions, hospitals created the needed hub for advanced healthcare research and development, as well as medical tourism.

• This economic activity is important for both urban and rural areas. In rural parts of the state, this high wage industry is responsible for a disproportionate amount of a local area’s economy.

• Healthy hospital activities also prop up property values in neighboring areas and are an important connection to the state’s university system.

“The data is clear when it comes to the impact of Arizona hospitals; their reach goes far beyond the examination room,” President of Rounds Consulting Group Jim Rounds said. “There are very few industries that provide direct services to citizens, employ thousands of people and also operate as an economic driver for the entire state. As we enter this new decade and implement policies that put Arizona on the right path for continued success, it is critical that health care be included in the economic vision of the state.” 

“This analysis is critically important for policymakers who are concerned about maintaining and enhancing Arizona’s quality of life,” Arizona Chamber of Commerce and Industry President and CEO Glenn Hamer said. “We need to ensure that Arizona’s health care sector keeps pace with our growing state, delivering outstanding care and plentiful options. Not only are Arizona’s health care systems essential to the state’s economy, but they make it a better place to live and work.” 

The report is the first of series analyzing the overall impact of Arizona hospitals.