Kentucky Hospitals Economic Importance to Their Communities

In every community, the local hospital is vitally important, not only for the health care services they provide, but for their contribution to the economy. Because hospitals operate 24 hours a day, 7 days a week, 365 days a year, they employ thousands of workers. The jobs and payroll generated by Kentucky’s hospitals supply tax revenue to state and local governments, and support other Kentucky businesses through the purchase of goods and services. Hospitals also continually make investments in their physical plants to enhance quality of care for their patients. These capital projects are a source of a significant number of jobs for the local community. Local hospitals are important assets to their community’s future economic development because the presence of a hospital is a key factor in attracting new businesses.

Kentucky Hospitals

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  • Employ over 72,000 people and spend $5.1 billion on wages
  • Spend $1.1 billion on capital projects, creating additional local jobs
  • Local Employee Spending $2.6 billion
  • Local Hospital Spending $4.2 billion
  • Total economic benefit to the local community: $7.9 billion
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These dollars have a “ripple effect” as they move through the larger economy, supporting other businesses and jobs in the community.

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The hospitals also

  • Support government through
    $374.3 million in provider taxes that support $1.2 billion in Medicaid spending through federal matching dollars.
    Their employees pay $98.1 million in local taxes and $423.6 million in income and sales taxes.
  • Care for their communities by
    Treating 526,102 inpatients and 11,013,584 outpatients each year
  • Welcoming 44,706 babies into the world
    Providing emergency care to 2,116,304 people
  • Provide benefits to their communities by
    Subsidizing $149.9 million in losses from treating Medicare and Medicaid patients
    Spending $134.9 million on financial assistance and charity care
    Providing other community services, such as health improvement, health professions education and healthcare research
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The data in this report was prepared by the Kentucky Hospital Association using an IMPLAN model designed by Economic Development Data Research Consultant Barry Kornstein, Senior Research Analyst.

About the data: Hospital data in this report are derived from currently available data from the 2020 Medicare Cost Reports (employees, wages, capital expenditures), Disproportionate Share Reports (Medicare and Medicaid shortfalls, charity care), KHA InfoSuite (utilization) and data provided by the hospital. All other data are derived from IMPLAN (informed by Cost Report data).

Inpatient Definition – total of inpatient discharges, total number of swing bed discharge totals, skilled nursing facility discharge totals and/or distinct part rehab discharges (excludes normal newborns)

Outpatient Definition – total outpatient discharges including hospital-owned ambulatory facilities, emergency department and observation discharges. This data does not include physician billing data.

Emergency Room Visits – total number from outpatient and inpatient emergency room discharges.

Births – total number of normal births born inside the hospital.