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KY Rural Health Works: Connecting Health Care and Economic Development. Kentucky Rural Health Works. Partners UK Center for Rural Health KY State Office of Rural Health UK Cooperative Extension Service UK Dept. of Agricultural Economics. Mission Statement.

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Kentucky Rural Health Works Development


UK Center for Rural Health

KY State Office of Rural Health

UK Cooperative Extension Service

UK Dept. of Agricultural Economics

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Mission Statement Development

  • Increasing Awareness about the Role of Health Care in Economic Development

  • Providing Tools for communities to invest in health care as an engine of economic growth

  • Conducting applied research to create a solid foundation for policy analysis and educational programming

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Awareness Building Development

Economic Impact of Rural Health Care

  • County, regional and State Level

    • What is the economic impact of the hospital or other health care providers?

      • Jobs provided

      • Income paid

      • Local purchases of materials and services

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How? Development

  • Economic Impact Reports

    • Radio Spots

    • News Releases

    • Ad Campaigns

    • Public meetings

  • Feasibility Studies

  • Other applied research and training

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Public Information Development

  • Economic impact Report maybe the starting point for a media campaign….

    • Press Release

    • Radio Spot

    • Roadside Advertising Boards

    • Flyers and brochures

    • Using information in health and nutrition programming

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Providing Tools… Development

  • Feasibility Study Training

    • Assessing the possibility of adding services, networking to meet

      • Health care objectives

      • Economic development objectives

  • Economic Evaluation of:

    • Preventive care programs

    • Health care access programs

  • Performance Based budgeting

    • Using budget planning to achieve health care strategic goals in communities

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Examples…. Development

  • Demand & Feasibility Studies

    • Demand for new Dialysis unit

    • Prospective use for new rural health clinic

    • Financial Feasibility and Location of new Outpatient surgical unit

    • Response to service demands from new county industrial park

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Applied Research… Development

  • Economic Analysis of:

    • EMS (survey)

    • Telehealth

    • Consumer expenditure patterns

  • State and Federal Level

    • Economic role of Medicaid and Medicare on rural community health sectors

    • State health and economic development planning

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Tools for preventive care evaluation… Development

  • Program Evaluation Tools:

    Determine whether your program is making an economic impact on community


    • Cost savings to health care providers

    • Economic benefits of a healthier population

    • Economic benefit of “Cancer screening program”

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Why? Development

  • To add an element to health care decision making in your community

  • To alter thinking about economic development in your community

  • Promote health network development

  • Address consumer / patient out migration

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Where? Development

  • Health Council or health groups in community

  • Industrial Development Authority

  • Chamber of Commerce

  • Fiscal Court

  • Newspapers, Radio….

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Rural Economic Development Development

  • Target

    • Create jobs

  • Tools

    • Attract new industry

    • Invest in workforce education and training

    • Build new health care facilities or develop healthcare networks, preventive care

    • Beautify Downtown, invest in tourism

  • Evaluation

    • ‘Was the Tool effective in reaching the Objective

    • Economic Impact Analysis “IMPLAN”

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Health Care can be used to achieve Econ Dev DevelopmentObjectives

  • Health Care and Health Education are focused on achieving “Health” targets

    • Nutritional goals

    • Quit smoking

  • Health Care may also play a role in achieving economic development targets:

    • Create jobs

    • Diversify businesses in community “don’t put your eggs in one basket”

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Three DevelopmentTools to Rural Economic Development

  • Invest in:

    • Human Capital

    • Physical Capital

    • Amenities (Public Capital)

  • Just Like your stock portfolio

    • What mix of stocks, bonds, cash do you want?

    • What mix of human, physical and public capital do you want your community to invest in?

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Economic Development Development

Human Capital

Attract Migrants for Jobs or Train Current Residents?

Jobs bring workers or workers bring jobs

Private Capital

Physical Capital

Amenities: public capital

Investments to Attract Employers or Workers?

Amenities (Public) Capital

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Human Capital Development

  • People

    • On the Job Training and Formal Education

    • Entrepreneurship and Risk Taking

    • Influenced by:

      • Culture of region

      • Family and friends

    • Nurses, allied health professionals, Doctors, Dentists, nursing home employees

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Physical Capital Development

  • “Things”

    • Machinery, Computers, Equipment, Buildings

  • Combine physical capital with people “human capital” to produce goods / services

  • It’s a lack of “things” that is slowing economic development

  • Hospital, Clinic, Ambulances, health equipment

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Amenities (Public Capital) Development

  • Environment and Geographical Features

    • Rivers, lakes, caves, forests,

  • Public Events

    • Festivals

  • Public services

    • Schools

    • Roads, bridges, water and wastewater, public safety

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Evaluation Development: Connecting Targets and Tools

  • Need to use the right tools to reach your target

    • Need to use the right prescription for the illness

  • Health Care as physical capital

    • Buildings, equipment

    • Health care purchases support local business

  • Health Care as human and social capital

    • Nurses, doctors, dentists, allied health prof.

    • Develop workforce to expand and retain health care employers

  • Health Care as Public Capital

    • Support industry location, household location

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Evaluation Development: Connecting Targets and Tools

  • Financial Measure

    • Hospital spend money in local community

      • Payroll

      • Goods and Services

  • Non-Financial Measures

    • Health care system helps attract new business to region

    • Preventive care helps promote healthy workforce

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Rural Economic Development in Pictures Development

Human Capital


Target: Create Jobs

Target: Create Jobs


Physical Capital

Public Capital

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Rural Economic Development in Pictures Development

Financial: new doctor’s staff payroll

Target: Create Jobs

Target: Create Jobs

Human Capital: Investing in a young person’s medical education

Non-Financial: attract new employer to town

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What is Economic Impact Analysis II… Development

  • Is to measure changes in an economy due to a change in one industry

  • A change in one industry e.g. opening or closure can have an impact on jobs and income on other sectors of the economy

  • This impact can be measured using what is know as multipliers.

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What is Economic Impact Analysis I….. Development

  • Economic Impact Analysis

    • Is an evaluation model to determine if the tool is right for the target

      • Looking forward

      • Current snapshot

    • Tells Us Two things…

      • Economic impact of the existing health care sector

      • Economic impact of expanding or contracting the health sector

    • It Does Not tell Us:

      • Which tool to use?

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Economic Impact Analysis Development


  • Industries are linked together by their purchases from each other

  • These linked purchases produce jobs and income to local residents and commuters in the local economy

  • For example, hospitals demand goods and services from suppliers, those suppliers in turn demand other goods and services

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Economic Impact Analysis: Three Types of Multiplier Effects Development

  • Direct effects: changes in industries to which a final demand change was made

  • Indirect effects: changes in other industries as they respond to the new demands of the directly affected industries

  • Induced effects: reflects changes in household spending from changes in income due to the changes in production

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Health Care’s Local Financial Linkages Development

  • Hospitals, nursing homes, doctors offices, etc… spend money locally

    • Local spending creates local jobs and local income

    • Examples include

      • Floral shops

      • Waste management

      • Legal and accounting services

      • Pharmacies

    • Some spending is non-local

      • Medical equipment

      • consulting

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County Hospital Expenditure Pattern Development

Purchases per $m in Nursing home sales

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Nursing Home Expenditure Pattern Development

Purchases per $m in Nursing home sales

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Economic Impact Analysis DevelopmentJefferson County Hospitals

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Economic Impact Analysis DevelopmentEstill County Hospitals

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Policy Implications Development

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Health Care and Econ Dev Targets Development

  • Health Care (acute and Preventive) can…

    • Promote job growth,

    • Produce a healthier and more productive population (higher wages, more competitive firms)

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For Health Care Development

  • Recognizing a different role in community

  • Continuing growth in importance of medical transfer payments to rural areas

  • Subsidy or funding support similar to manufacturing

  • Role relative to closure or expansion of facilities

  • Networking and Telemedicine

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For health care…. Development

  • Different roles in

    • Large rural hospital centers

    • Small rural hospitals

    • No hospital

    • Nursing homes play a different role

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For economic development officials Development

  • Subsidy and funding support for health care (Why or Why not?)

  • Capital access financing

  • Attracting Rural physicians, dentists and professionals to shortage areas can be an econ dev policy

  • Workforce development and education

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For economic development officials Development

  • Local industrial authorities

    • Supporting medical facilities in industrial parks

    • Seeing primary versus secondary importance of industry

    • Support health and nutrition education programs for workforce

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Extension Agents Role Development

  • Coordinating a campaign to support the local health care system

  • Bridging the divide between health care and economic development in your community

  • Providing access to economic impact reports and training

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Next Steps….. Development

  • Request an Economic Impact Report

  • Begin a Dialogue in your community with health care, economic development officials and community leaders

  • A follow-up meeting with Extension Agents at State Conference in January

  • A feasibility study training to follow next year