New report shows healthcare drives much of Montana’s economy
HELENA (Daily Montanan) – A new comprehensive report, several years in the making, has been released by the Montana Hospital Association and shows that healthcare systems statewide make up the single largest economic sector by volume, accounting for more than 83,000 jobs, and pay more than $6 billion in personal income, roughly 13 percent of the total.
The report, conducted by the Bureau of Business and Economic Research at the University of Montana, takes an overall look and a county-by-county snapshot of the contributions of the hospitals in each place. The Montana Hospital Association was able to obtain audited data from most of the healthcare facilities so it could calculate the economic impact.
The study compared what Montana’s economy would look like without any hospitals or healthcare — an exercise that Patrick Barkley admits is not a realistic possibility, but a good model for calculating exactly the economic contributions the hospitals make.
Key among the findings were that hospitals contribute to more than $16 billion of output in the state and are tied to 147,455 people coming to the state who would not otherwise be here. Also, in nearly all counties, healthcare is in the top five employers, and in most “urbanized” counties, it’s the leading employer with the exception of Gallatin County.
“(They pay) wages that on average are higher than the overall average in the community,” the study concludes. “Hospitals attract significant dollar flows into the community that originate from outside the local economy, particular federal dollars in support of programs like Medicare.
“Hospitals in particular, and health care in general, are labor intensive services that have a large locally produced component. Therefore, a comparatively large fraction of spending on hospitals is paid out as wages and thus remains in the economy.”
MHA Chief Executive Rich Rasmussen pointed out that whether discussing large healthcare systems or smaller ones, they often both make a similar portion of their county’s percentage of wages. For example, in Yellowstone County, 7.5 percent of all wages paid come from hospitals and healthcare systems. Meanwhile in Wheatland County, the hospital accounts for 8.6 percent.
Healthcare is also the largest employer in the state, capturing 15.8 percent of the workforce. In 50 of Montana’s 56 counties, health care employment ranked in the top five, and it was the top in 21 counties, including Yellowstone County, the state’s most populous.
In a chart of wages paid by healthcare, it nearly doubled the amount of the next closest category, public administration. Healthcare makes up 17.8 percent of the wages.
“Its job growth over the last two decades in Montana has been among the highest of any major industry,” the report said.
In between 2002 and 2020, healthcare grew 2 percent, and still remained higher than other notable categories like arts and entertainment, retail trade, and real estate. During the 15-year period from 2005 to 2019, the total wages increased 16.7 and pay almost 70 percent more than other average jobs.
“In part this study was to answer the question if a community loses a hospital, what does that mean? What policy changes would it impact?” Rasmussen said.