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Hospitals Are an Economic Engine for Solano

How important are the five privately operated hospitals to Solano County’s economy? 

In fact, they are responsible for more than 11 percent of the local economy, and could grow even more important in the future, according to a new study conducted by Economic Forensics and Analytics.

edchow“Hospitals are an economic engine for the community,” noted Robert Eyler, PhD., an economics professor at Sonoma State University and principal of the independent research and consulting firm in Petaluma. “They generate support for education, jobs, and businesses, all the while continuing their critical mission of providing healthcare services locally.”

  

Mr. Eyler presented the findings of his study at a breakfast meeting of the Solano Economic Development Corporation at the Hilton Garden Inn in Fairfield on Nov. 28. The study was commissioned by the Hospital Council of Northern and Central California, a nonprofit association of hospitals and health systems.

Among the study’s major findings:

  • Employment, as of January 2012, was approximately 4,085 employees (1,800 from NorthBay) slightly more than 2 percent of the total payroll employment in Solano County;
  • Hospitals pay almost $319 million annually in wages; and
  • The number of workers has grown in trend since 2001, and will likely continue to grow.

In addition to NorthBay Medical Center and NorthBay VacaValley Hospital, the study also considered data from Sutter Solano Medical Center in Vallejo and Kaiser Permanente Medical Centers in Vallejo and Vacaville.edc1 

The study also considered the indirect impact hospitals have locally. When other jobs reliant on local hospitals are considered, the entire employment number grows to 7,800 jobs in Solano County.

“Because of their links to education and their demand for skilled workers and medical professionals across multiple job classifications, hospitals heighten their economic impact by paying good wages and salaries and purchasing supplies,” the study said.

When hospitals expand or build new facilities, the economic impact balloons. The study noted that for every $50 million spent annually on hospital improvements or new construction these benefits materialize:

  • An additional $24.5 million bump in business revenue in the community;
  • More than 250 new jobs while the project is taking place, including construction jobs to support an industry otherwise hurt by the slow economic recovery; and
  • Creation of more than $2.27 million in state and local tax revenue.

“As you can see, the three systems in Solano County comprise a pretty powerful economic engine,” NorthBay President and CEO Gary Passama told the audience. “This engine can gain horsepower in coming years if certain economic factors, community priorities and government collaboration can occur.“

Noting that NorthBay could be spending more than $100 million in the next few years to create new facilities and expand NorthBay Medical Center, Gary called on local elected officials to collaborate with economic developers to ensure growth happens.

 

“We need you business leaders, our economic development pacesetters and our government leaders – especially our local, county, state and federal policy makers – to understand what stands in the way of expanding, modernizing and advancing health care in Solano,” he said.

 

“Our economic development promoters and our cities need to look at us just as they would a Pixar or Google,” he added. “Just how wide and welcoming is the red carpet that you would roll out to these firms?”

For state and federal officials Gary asked, “When you are presented with a proposal to create a new legislative mandate, come and visit our hospitals and clinics to learn the impact it would have in the real world.”