Report Charts UAMS as ‘Exceptional’ Asset for Arkansas

By Jon Parham

 In 2010, UAMS and its clinical and research affiliates generated more than 34,000 jobs and had an economic impact on our state of more than $3.9 billion.
In 2010, UAMS and its clinical and research
affiliates generated more than 34,000 jobs
and had an economic impact on our state
of more than $3.9 billion.

In 2010, operations of UAMS and its clinical and research affiliates – Arkansas Children’s Hospital and the Central Arkansas Veterans Healthcare System – generated 34,500 jobs, said the report by the Technology Partnership Practice of the Battelle Memorial Institute, the world’s largest non-profit independent research and development organization. The complete report is available online here.

The job total included 17,961 direct jobs by the three organizations along with 16,389 indirect or induced jobs generated by suppliers to the organizations or spending by employees on goods and services. The jobs accounted for more than $1.84 billion in personal income in the state.

The overall impact of expenditures by UAMS and its affiliates totaled $3.9 billion. In calculating the economic impact, Battelle used a statistical model that incorporated the spending by the three organizations, economic activity generated by their activities, spending by their suppliers and spending by employees, then used multipliers to determine how that spending affected the state’s economy.

“UAMS represents an exceptional asset for the entire state of Arkansas,” the study said. “Battelle further concludes that, among academic medical centers, UAMS is well positioned for continued leadership in the science and technology-driven 21st century economy, and that Arkansas is likely to see significant further impacts and benefits from UAMS in the future.”

The report viewed UAMS and its affiliates as “a high priority economic engine for the state,” citing ongoing needs for health care and health care professionals along with the increasing importance of biomedical research to the economy,

“We understand the impact our work has on the state’s economy,” said UAMS Chancellor Dan Rahn, M.D. “Still, I think this only illustrates the scope of our true mission to engage in activities – whether patient care, academic or research – that result in better health now and in the future.”

Among the findings highlighted by the report:

• Inside the six-county Little Rock Metropolitan Statistical Area (MSA), UAMS generates nearly $1.1 billion in economic impact; outside the MSA, UAMS directly generates $58.5 million in economic impact.
• The eight UAMS Area Health Education Centers (AHECs) around Arkansas generate 974 jobs between direct employment (641) and indirect/induced employment (333) as well as being directly responsible for nearly $55 million in economic impact in the state.
• Each year for the past four years UAMS construction has generated an average overall economic output in Arkansas totaling $213 million. UAMS construction activities directly generated 953 annual construction jobs, while these construction jobs, in turn, generated an additional 716 jobs in the economy from suppliers and the spending of construction worker wages in the economy.
• Uncompensated care and charitable care – including unpaid portions from Medicaid, Medicare and other indigent care programs – totaled $168.7 million in fiscal year 2010.
• UAMS research funding for fiscal year 2010 equaled $120.2 million. National Institutes of Health data show UAMS to be in the top 50 percent of medical schools in the United States in terms of NIH funding.
• From a base of five jobs in start-ups in 1998, start-up companies in the biomedical business incubator UAMS BioVentures have grown to now employ 532 personnel in 2010, with a payroll of more than $26.5 million.
• Battelle calculated a societal return (via increased economic productivity) for the 2008-09 UAMS graduating class of 806 students to be at least $31.4 million on an annual basis.

Projected UAMS revenue for fiscal year 2011, which ends June 30, is $1.2 billion. Seventy percent of that total comes from patient care; 15 percent from research grants and contracts; 9 percent from state appropriations; 4 percent from gifts and other sources; and 2 percent from tuition.

The chancellor noted that the largest revenue source has traditionally been UAMS clinical programs. The clinical revenue is needed, Rahn said, to help fuel the research and academic activities in support of the UAMS mission of improving health.

Four observations made by authors of the report:

• Continuing enrollment expansion of the UAMS Northwest regional campus in Fayetteville – now in its second academic year with 95 students – will continue to enhance the UAMS economic impact statewide.
• Noting that UAMS is already a leader in distance education and telemedicine, the report called a 2010 federal grant to UAMS for further expanding broadband connectivity “a significant economic development opportunity” for the state.
• Battelle pointed to the increasing importance of the life sciences and biomedical innovation to the nation’s economy, noting that the segment grew through the recession. “UAMS represents Arkansas’ key institution for participation and growth in the life-science economy.”
• Changes from health care reform, changes in reimbursement rates for care, increasing unreimbursed care and increased competition for research funding are all factors that will affect UAMS in the future, making it critical for UAMS and the state to work together to understand the impact of those challenges.

UAMS commissioned the study to provide a detailed review of the impact on Arkansas by the presence and operations of UAMS. The Battelle report also considered the role of UAMS in providing the physician staffing for the primary health care and research operations of the Arkansas Children’s Hospital and the Central Arkansas Veterans Healthcare System.

UAMS is the state’s only comprehensive academic health center, with colleges of Medicine, Nursing, Pharmacy, Health Related Professions and Public Health; a graduate school; a 540,000-square-foot hospital; a statewide network of regional centers; and six institutes: the Winthrop P. Rockefeller Cancer Institute, the Jackson T. Stephens Spine & Neurosciences Institute, the Myeloma Institute for Research and Therapy, the Harvey & Bernice Jones Eye Institute, the Psychiatric Research Institute and the Donald W. Reynolds Institute on Aging. It is the state’s only Level 1 trauma center. UAMS has 2,836 students and 761 medical residents. It is the state’s largest public employer with more than 10,000 employees, including nearly 1,150 physicians who provide medical care to patients at UAMS, Arkansas Children’s Hospital, the VA Medical Center and UAMS’ Area Health Education Centers throughout the state. Visit www.uams.edu or uamshealth.com.