Iowa hospitals add $7.1 billion to economy: study

Health care sector employees 330,000, says state hospital organization

University of Iowa Health Care complex, which houses University of Iowa Hospitals and Clinics, is seen in this photo taken on Friday, April 18, 2014, in Iowa City, Iowa. (Justin Wan/The Gazette)
University of Iowa Health Care complex, which houses University of Iowa Hospitals and Clinics, is seen in this photo taken on Friday, April 18, 2014, in Iowa City, Iowa. (Justin Wan/The Gazette)

Iowa’s hospitals add more than $7.1 billion to the state’s economy and generate more than 132,000 jobs, according to a new report from the organization that represents all the state’s 118 community hospitals.

The Iowa Hospital Association released its latest hospital economic impact report Wednesday, which examines jobs, income, retail sales and sales tax generated by the state’s hospitals as well as the rest of its health care sector.

The 2018 report is compiled based on data from the American Hospital Association’s Annual Survey of Hospitals, according to a news release from the association.

According to the report, Iowa’s 118 hospitals provide $4.8 billion in salaries and benefits and generate another $2.3 billion for Iowa’s economy through “other jobs that depend on hospitals.”

Hospitals provide direct employment for 74,691 people and indirectly for an additional 57,586 people outside the hospital sector.

Iowa’s health care sector in total — which includes offices of health practitioners, nursing home and residential care facilities, pharmacies and other medical and health services organizations — contributes about $17 billion to the state economy.

The health care sector directly and indirectly employs 330,308 people, or about 20 percent of the state’s non-farm employment, according to the report.

2018 Economic Impact of the Health Sector
JobsPayroll and Proprietor Income
Hospitals (State of Iowa)132,277$7,146,950,740
The Entire Health Sector330,308$17,016,130,092

The survey also took a look at how hospital employees spend their money. The Iowa Hospital Association estimates they spend about $1.9 billion on retail sales and more than $114 million in state sales tax revenue.

The University of Iowa Hospitals and Clinics, one of the state’s largest health care systems, adds more than $800 million to the state’s economy through more than 14,000 direct and indirect jobs.

Cedar Rapids-based hospitals employ nearly 9,000 people directly and indirectly in Linn County, bringing about $475 million in economic impact. The Linn County health care sector in total is estimated to have a $1.3 billion effect.

The health care sector throughout Johnson County — which includes the UIHC as well as Iowa City Veterans Affairs and Mercy Iowa City — brings a $1.5 billion impact.

In Wednesday’s news release, Iowa Hospital Association officials touted the importance of hospitals to the local economy in urban and rural areas throughout the state.

“With more than 330,000 jobs, health care is one of Iowa’s largest employers, and hospitals remain by far the biggest contributor to that enormous impact,” said Kirk Norris, chief executive officer and president of the hospital association, in the news release.

“In Iowa cities and counties, hospitals are uniformly among the largest employers. Those jobs bring income to Main Street businesses and support local government services and infrastructure through taxes.”

However, association officials said that the uncertainty around potential changes to Medicaid and Medicare can make it less likely for administration in the state’s hospitals to bring new services or hire additional staff.


“Any time those programs get messed with, for better or for worse, it impacts the hospitals,” Iowa Hospital Association Spokesman Scott McIntyre told The Gazette Wednesday.

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