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Mary Hardin

Last modified: Thursday, February 1, 2007

Indiana's medical school and teaching hospitals make major economic impact

February 1, 2007

INDIANAPOLIS -- A new report from the Association of American Medical Colleges reveals that its member medical schools and teaching hospitals had a combined economic impact of $451 billion on their states and the nation in 2005. In the Hoosier state, Indiana University School of Medicine and partner teaching hospitals, which include Clarian Health, Richard L. Roudebush VA Medical Center, St. Vincent Hospitals and Wishard Health Services, had a combined economic impact of $7.37 billion.

Indiana's medical school and major teaching hospitals are directly and indirectly responsible for more than 52,459 full- and part-time jobs (full-time equivalents, or FTEs). This number includes the IU School of Medicine, which has full-time equivalent employment of more than 3,452 faculty and staff and 1,030 medical residents and fellows. FTE employment levels at the major teaching hospitals include:

  • Clarian Health — 11,981
  • Roudebush VA — 1,550
  • St. Vincent Health — 11,605
  • Wishard Health Services — 2,331

Nationally, the report found that the 125 accredited U.S. medical schools and more than 400 major teaching hospitals represented by the AAMC employ nearly 1,670,000 individuals and are directly and indirectly responsible for more than 3 million full-time jobs—one out of every 48 wage earners in the United States.

The overall economic impact of institutions such as IU School of Medicine on Indiana and the national economy takes into account the direct and indirect business volume generated by medical schools and teaching hospitals, including institutional spending; employee spending; and spending by patients, their families, and visitors (excluding spending for patient care and medical services). According to the report, every dollar spent by a medical school or teaching hospital indirectly generates an additional $1.30 when it is "re-spent" on other businesses or individuals, resulting in a total impact of $2.30 per dollar.

Indiana's medical school and teaching hospitals also generated more than $254 million in state tax revenue in 2005 through income and sales taxes, corporate income taxes, and capital stock/franchise taxes paid by businesses that collect revenue from state institutions.

In addition, Indiana University School of Medicine and its partner teaching hospitals generated more than $80 million in out-of-state medical visitor-related revenue in 2005, including direct spending in local communities by out-of-state patients and their friends and families. IU medical school is a major sponsor of meetings and conferences, drawing scores of visitors each year whose spending boosts the state's economy.

The AAMC report, "The Economic Impact of AAMC-Member Medical Schools and Teaching Hospitals," does not include the economic impact of patient care-related spending at hospitals, nor does it account for the economic benefits of physician training programs and community service programs such as programs through the IU School of Medicine Office of Medical Service Learning. This report was prepared for the AAMC by the consulting firm, Tripp Umbach.

For a copy of this report, go to: