Hospitals and health care systems are a powerful economic force in Kansas. The state’s health care sector generated $17.9 billion in income and $31.7 billion in sales, ranking it fifth among all economic sectors in the state.
Hospitals were the biggest contributor in the health sector, generating $9 billion in income and $17.9 billion in sales. Kansas hospitals employ nearly 100,000 of the 240,000 health service employees in the state. The health care sector is the third-largest aggregate employer in the state.
These are just a few of the findings in the January 2021 report, The Importance of the Health Care Sector to the Kansas Economy, which details estimates of the “gross” impact of the health care sector on economic activity in Kansas.
In the report, K-State researchers identify three primary ways health care influences local economic development: health care attracts and retains business, attracts and retains retirees, and creates local jobs.
Jobs are an essential part of the economic impact. However, funds also flow to businesses and throughout the economy as hospitals purchase goods and services. Hospitals generate nearly $4.1 billion in local retail sales in Kansas each year. Additionally, the hospital sector generates more than $270 million in state sales tax. These are critical funds that the state uses for important programs such as education and transportation.
“Hospitals and health services truly are an economic anchor in our state,” says Chad Austin, president and CEO of the Kansas Hospital Association. “This report documents the importance of the health care sector to the Kansas economy. While the estimates of economic impact are substantial, they are only a partial accounting of the benefits health care in general, and community hospitals in particular, provide to the state. Kansas community hospitals help stabilize the population base, invigorate their communities and contribute significantly to quality of life.”
According to the 2021 economic report, Kansas hospitals employ 5% of all job holders in the state. The report calculated economic multipliers, or “ripple effects,” and estimated hospitals account for 95,692 additional jobs throughout all other businesses and industries in the state.
In other words, for each new job in the hospital sector, nearly another job (0.96) was created in other businesses and industries in Kansas. The hospital sector employment had a total impact on state employment of 195,677 jobs.
Furthermore, the entire health sector in Kansas employs about 240,000 people, or 12 percent of all job holders in the state. This puts Kansas ahead of the national average, which is 10 percent of job holders in the U.S. working in health care services.
The total employment impact of the health services sector in Kansas is nearly 407,000 jobs, making it the third-largest aggregate employer in the state. This report confirms health care is directly or closely related to more than 20 percent of all Kansas employment.
The study also found Kansas hospitals generate more than $7.5 billion in direct labor income to the Kansas economy each year. For every dollar of income generated in the hospital sector, another $0.64 was generated in other business and industry. As a result, the hospital sector had an estimated total impact on income throughout all businesses and industries of $12.3 billion.
The full statewide report and links to county reports are located on the Kansas Hospital Association website.
The Kansas Hospital Association is a voluntary, nonprofit organization existing to be the leading advocate and resource for members. KHA membership includes 218 member facilities, of which 122 are full-service, community hospitals. Founded in 1910, KHA’s vision is, “Optimal Health for Kansas.”