The Kansas Hospital Association has worked again with the Office of Local Government, K-State Research and Extension, to produce The Importance of the Health Care Sector to the Kansas Economy. New data confirms the health care sector is among the fastest growing in the economy. The entire health sector in Kansas employs more than 226,000 people and is the fourth largest aggregate employer in Kansas.
Kansas hospitals alone employ more than 84,400 people, or 4.3 percent of all job holders in the state. These jobs are essential to serve our communities, but also have a ripple effect on the Kansas economy. For every job in a Kansas hospital, another .88 jobs were supported in other businesses and industries in the state. Kansas hospitals have a total impact of more than 158,400 jobs.
According to the report, hospitals generated approximately $5.7 billion in total income. For every $1 of income generated by hospitals, another $.56 is generated in other business and industries in the state's economy. Thus, hospitals have an estimated total impact on income throughout all business and industry of nearly $9 billion. Funds spent to buy goods and services flow from hospitals to business and ripple throughout the economy. The impact on area retail sales generates more than $3 billion in the Kansas economy each year. Additionally, the hospital sector generates nearly $200 million in state sales tax. The state uses these critical funds for important programs such as education and transportation.
This report documented the relative importance of hospitals and 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 that health care in general, and community hospitals in particular, provide to the state. Kansas community hospitals help to not only stabilize the population base, but also invigorate their communities and contribute significantly to the quality of life.
It would be careless not to reflect on the additional impact expanding KanCare would have on the Kansas economy. The impact of health care services in Kansas grows even more if Kansas can develop a new solution to expand the KanCare program. The Kansas Department of Health and Environment commissioned a study that estimates KanCare expansion would bring $2.4 billion in federal dollars to the Kansas economy from 2016-2018. Without expanding KanCare, fewer jobs across all industries will be created; this rises to 3,830 fewer jobs by 2020. A unique Kansas solution, like our legislation, The Bridge to a Healthy Kansas, will add needed dollars that will assist in growing the economy, creating jobs and supporting the state's budget through increased revenues and cost savings.
Kansas community hospitals are major employers and business partners throughout the state. As we continue to look for opportunities to enhance our state's economy and stabilize our population, a strong health care system, anchored by well-supported community hospitals, is essential.
In addition to this statewide report, county economic impact reports are linked on the home page of the KHA website (new reports will be created this fall). We encourage trustees to use these reports as you discuss the economic impact of your hospital.