The Economic Impact of a New Regional Hospital for the Shoals
In 2010 RegionalCare commissioned an economic impact study to determine the economic benefits for the Shoals area which would result from building a new regional medical facility, operation of the facility and recruiting new physicians into the area. The focus of the impact study was to estimate the employment, earnings, and sales taxes generated by different phases of the project.
Construction of the regional medical facility is expected to take thirty months and will increase employment and income within various sectors of the local economy. Obviously, the economy will experience a direct increase in construction employment and earnings as the facility is built and when construction materials are purchased within the region. Additional employment and income are indirectly created when direct earnings are spent in the Shoals.
- Total 30 Month Employment (Direct + Indirect) = 4,509.74 jobs
- Total 30 Month Earnings (Direct + Indirect) = $320.9 million
Once the facility is completed the hospital will also directly employ numerous employees and will make purchases from local vendors. Employment and earnings from operations make a significant contribution to the local economy.
- Total Employment from Operations (Direct +Indirect) = 2,645.47 full-time jobs
- Total Earnings from Operations (Direct + Indirect) = $124,545,066
RegionalCare plans to aggressively recruit an additional 70 physicians to the Shoals. A new $20 million medical office complex will be constructed to house physician practices.
Each year with all practices operational:
- Direct Jobs (70 physicians plus 154 staff positions) = 224 jobs
- Indirect Jobs = 598 jobs
- Total sustainable jobs created in Colbert and Lauderdale Counties = 822 jobs
Each year earnings with all practices operational:
- Direct Earnings: $16,021,488
- Indirect Earnings: $39,423,093
- Local spending by new practices: $12,360,532
- Total Earnings: $67,805,112
Sales Taxes Generated for Local Government (County and City—Lauderdale and Colbert)
Sales taxes are generated from three sources: direct expenditures, indirect expenditures and material purchases. Total earnings from these sources are adjusted to reflect the amount spent on items subject to the sales tax and to account for leakages from the local economy.
- Total County Sales Taxes (30 month construction phase): $1,987,856
- Total City Sales Taxes (30 month construction phase): $3,896,198
Total earnings are adjusted to reflect the amount spent on items subject to the sales tax and to account for leakages from the local economy.
- Total yearly county sales taxes generated: $348,701
- Total yearly city sales taxes generated: $1,120,085
Total Economic Impact – Present Value
Sustainable employment as a result of construction and operation of a new regional medical facility is estimated to be in excess of 3,400 jobs. To more accurately assess the current value of long-term investments, economists utilize present value analysis. The value of future economic benefits (i.e. earnings and taxes) is expressed in today’s dollars by discounting revenue earned in future years back to the value of dollars in the present.
- Total Earnings (2011 dollars): $1,065,360,896
- Total City and County Tax Collections (2011 dollars): $12,614,021
Thus, construction and operation of the new medical facility is expected to contribute more than $1 billion dollars to the Shoals Economy in the next five years.