The report,

which was based on a study prepared by the Economic Forecasting Center

at Georgia State University, revealed that Georgia hospitals had direct

expenditures of more than $8.9 billion in 2000 an increase from $8.7 billion

in 1999. When combined with an economic multiplier developed by the United

States Department of Commerce's Bureau of Economic Analysis, the total

economic impact of those expenditures was $26.7 billion. This output multiplier

considers the "ripple" effect of direct hospital expenditures

on other sectors of the economy, such as medical supplies, durable medical

equipment, and pharmaceuticals. Economic multipliers are used to model

the resulting impact of a change in autonomous spending in one industry

on the "circular flow" of spending within an economy as a whole.

"This

study shows that Georgia hospitals and health systems not only serve to

protect and improve the health of every Georgia resident, they are critical

components to the economic health of the state as well," said GHA

President Joseph A. Parker. "During a time when so many hospitals

throughout the state aresuffering due to sagging Medicare/Medicaid payments,

a declining health care workforce and a growing uninsured population,

it is our hope that local, state and federal lawmakers, along with community

leaders, will join us in our efforts to ensure that Georgia hospitals

can continue to provide top-quality health care services to the residents

of this state for many more years to come."

According to

state statistics, in 2000, 128 out of 173 hospitals in Georgia or 74 percent

had negative operating margins for payments for patient care services.

In addition to continued financial obstacles, Georgia hospitals are also

suffering from a severe shortage of qualified health care workers. According

to a recent GHA survey, vacancy rates for nursing-related positions grew

38 percent from 1999 to 2001. Over the same period, vacancy rates for

allied health positions which includes hospital pharmacists, radiographic

technologists and respiratory therapists jumped 40 percent.

The hospital

economic impact report also measures hospitals' direct economic contribution

to Georgia's working families. Using a "household earnings multiplier,"

the study determines that hospitals generate more than $6.7 billion in

household earnings in the state. The household earnings multiplier measures

the increased economic contributions from households employed directly

or indirectly by hospitals through daily living expenditures.

The report

also concluded that:

After an output

multiplier is applied to the $853 million that Georgia hospitals received

from treating Medicaid recipients in 1999, the total annual economic impact

generated by hospitals and Medicaid is more than $1.9 billion.

Hosiptals in

Georgia provided more than $924 million in community benefits in 2000.

Uncompensated care, which includes indigent care, charity care, bad debt

write-offs and other free care, accounted for 10.4 percent of all hospital

expenses.

Georgia rural

hospitals, often most severely impacted by state and federal budget cuts,

contributed more than $5.9 billion to the state's economy and provided

nearly 60,000 full-time jobs. Furthermore, these hospitals contributed

more than $202 million in benefits to their communities in the form of

uncompensated care.

"Despite

financial hardships, every day of the year, 24 hours a day, Georgia's

hospitals and health systems continue to honor a fundamental promise to

their communities to be there, doors opened, whenever they are needed,"

said Parker. "If that is to continue, we cannot ignore the many issues

which continue to tear at the fabric of our state's entire health care

system."

Established

in 1929, GHA is the leading trade organization of hospitals and health

systems in the state providing education, research and risk management

services to its more than 180 hospital and health system members. Additionally,

it represents and advocates health policy issues benefitting Georgia's

citizens before the state legislature and U.S. Congress as well as before

regulatory bodies.

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