Medical Schools Have Large Economic Impact

$2.77 Billion in West Virginia; 21,000 Jobs

MORGANTOWN, W.Va. – Medical schools and their associated teaching hospitals were responsible for more than $2.77 billion in economic activity in West Virginia in 2005, including nearly 21,000 jobs, according to an in-depth analysis sponsored by the Association of American Medical Colleges (AAMC).

"Medical education is expensive -- but it pays dividends to the state in many ways,” said John Prescott, M.D., dean of the medical school at West Virginia University. “In addition to training urgently-needed physicians to care for the people of the state, the medical schools and teaching hospitals create economic activity and jobs. WVU's three medical campuses, in Morgantown, Charleston and Martinsburg, are vital parts of these communities."

“In addition to the impact of the medical school, the three other schools at WVU – dentistry, nursing and pharmacy – also add to the state’s healthcare workforce and economic success,” said Robert D’Alessandri, M.D., WVU vice president for health sciences.

"The economic benefit of today's medical school is far-reaching and multifaceted," said  Charles H. McKown Jr. M.D., dean of Marshall's Joan C. Edwards School of Medicine. "With its expanding facilities, large number of skilled employees, and access to research funding, medical education may easily be considered the best growing industry for West Virginia in the last half century. The broad spectrum of health care services we provide at Marshall through our skilled faculty and affiliated medical institutions, coupled with the work of our graduates, decreases overall health care costs and lost productivity by West Virginians."

The report found that the 125 accredited U.S. medical schools and more than 400 major teaching hospitals represented by the AAMC employ nearly 1.7 million people 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. This $451.6 billion overall impact on the national economy takes into account the direct and indirect business volume generated by these institutions, including institutional spending; employee spending; and spending by patients, their families, and visitors (excluding spending for patient care and medical services).

AAMC members in West Virginia include the medical schools at WVU and Marshall University, WVU Hospitals, West Virginia United Health System, Charleston Area Medical Center, CAMC Health System and Cabell Huntington Hospital.

Statewide, the report found that AAMC’s West Virginia members had a $1.2 billion in direct business volume and an estimated $1.5 billion in indirect impact.

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.

The study also showed that state and local governments in West Virginia collected some $208 million in taxes as a result of medical school and teaching hospital activities.

The AAMC report, “The Economic Impact of AAMC-Member Medical Schools and Teaching Hospitals,” does not account for the economic benefits of the community service programs and physician training programs that are the hallmark of academic medical institutions. This report was prepared for the AAMC by the consulting firm, Tripp Umbach.

For a copy of this report, go to: www.aamc.org/economicimpact . 

The online version does not include a breakdown of West Virginia economic activity; that information is below:

Economic Impact of Medical Education in West Virginia

Source: Association of American Medical Colleges (2005 data)           


Total State Business Volume Impact


Direct State Business Volume Impact


Indirect State Business Volume Impact


Total State Employment Impact


Total State Government Revenue


Clinical Impact


Medical Education Impact


Research Funding Impact


State Business Volume Impacts

Total State Business Volume Impact


Spending for capital improvements, goods, supplies, services


In-state staff spending


In-state total physician & faculty (employed and contract) spending


In-state resident & student spending


Out-of-state patient in-state spending


In-state spending by out-of-state patient visitors


In-state spending by other out-of-state visitors


Government Revenue Impacts

Total Government Revenue Impact


Individual income tax revenues


Sales & gross receipts tax revenues


Corporate net income tax revenues


Other tax revenues


- WVU -

For more information:
Bill Case, HSC News Service, (304) 293-7087

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