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Doc groups play up economic impact

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Physicians are regarded as smart, successful and helpful when you’re sick—but not usually as a big driver of the economy. Now, however, physician trade groups are arguing that docs are good for business, too.

Indiana has 11,549 office-based physicians generating $14.7 billion in economic activity a year, according to a report released in February by Virginia-based The Lewin Group. The report was sponsored by the American Medical Association and state affiliates including the Indiana State Medical Association. It uses multipliers to estimate the economic ripple effects of wages paid and supplies or services purchased by office-based physicians.

By way of comparison, a 2009 study of Indianapolis-based Eli Lilly and Co. conducted by Indiana University's Indiana Business Research Center concluded the company and its (then) 15,500 state employees contributed $8 billion to the state’s economy. The studies used different methodologies, thus aren’t comparable scientifically. They did, however, use the same economic multipliers.

The Lewin study calculated that each physician hires about two employees directly and supports nearly three more through economic ripple effects. Wages of all those jobs total $9.6 billion.

“Hoosiers benefit directly when the state creates a positive practice environment for physicians,” the medical associations wrote in a report about the Indiana numbers. “By attracting and keeping physicians in the state, the people of Indiana have better access to health care and a stronger state economy.”

You’d expect lobbying organizations for physicians to say nothing less. Although the economic argument is relatively new.

In general, economic developers view physicians somewhat like retailers—they’re vitally needed, but don’t tend to create a lot of wealth. A manufacturer—of pharmaceuticals, for instance—is seen as creating wealth by adding value to raw materials, and in Lilly’s case, bringing wealth from around the world.

So don’t expect to see property tax abatements for physicians any time soon.

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  • In addition
    Although physician practices may not 'create wealth' like a manufacturer, they do provide for some high paying jobs (nurse, radiology techs, etc) which can mitigate the Indiana brain drain.
    They can keep dollars and employment in the rural areas rather than people seeking services in larger metro areas.
    And without quality local medical care, businesses may not locate in a small town.

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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