Solano hospitals give county's economy a healthy boost

By Melissa Murphy/ MMurphy@TheReporter.comthereporter.com
Posted: 11/29/2012 01:08:40 AM PST

The five hospitals in Solano County are a major drive to the area's economy, according to a report released Wednesday by Economic Forensics and Analytics.

Together, the five privately operated hospitals are responsible for more than 11 percent of the local economy, according to Robert Eyler, an economics professor at Sonoma State University and principal of the independent research and consulting firm in Petaluma. Additionally, the revenue generated by hospitals represents more than 7 percent of Solano's total revenue.

"Hospitals are the economic engines that elevate our community," Eyler said Wednesday morning during a Solano Economic Development Corporation breakfast. "Hospitals contribute a large amount to Solano's economy and community through jobs, business revenues and tax receipts, and by providing what the public cannot easily provide: a safety net."

Hospitals included in the study were Sutter Solano Medical Center in Vallejo, Kaiser Permanente Medical Centers in Vallejo and Vacaville, NorthBay Medical Center in Fairfield and NorthBay VacaValley Hospital in Vacaville.

As of January, there were 4,085 employees at local hospitals, slightly more than 2 percent of the total payroll employment in Solano County, or almost $319 million in wages. These jobs support more than 7,800 additional jobs in the area because of the "multiple layers of spending."

Eyler explained that the employees earn their income in Solano County and turn around and spend that money in the same community.

"Hospitals go way beyond employing medical professionals," he said.

He added that, even in the midst of a recession, health care remained a "bright spot."

While hospital revenues remain flat statewide, Solano County continues to see revenue growth.

Solano County does a better regional job in providing services than the state," Eyler said. "Things are going really well and will likely continue."

The study shows that for every $50 million spent annually in Solano County on hospital improvements or new construction, there is an additional $24.5 million in business revenue earned beyond the $50 million to fund the capital project; capital spending supports more than 250 jobs while the project is taking place, including construction jobs to support an industry otherwise hurt by the slow economic recovery; and capital spending generated more than $2.27 million in state and local tax revenue.

The relationship between health care and education continues to remain strong as well.

Joanie Erickson, director of public relations for Kaiser Permanente, Napa-Solano Area, said local colleges allow the hospitals to keep the workforce close to home.

"There is that symbiotic relationship that we appreciate," she said, adding that Kaiser Permanente is in the process of creating a family practice residency program at its Vallejo hospital.

Gary Passama, president and chief executive officer for NorthBay Healthcare, agreed that the hospitals are a "pretty powerful economic engine."

He added that David Grant Medical Center at Travis Air Force Base also contributes to Solano's economy.

Passama said that, whether we like it or not, come 2014, the Affordable Care Act will have a huge impact and hospitals in California will have to find a way to provide services for some 4.4 million citizens.

"We're all looking to grow to meet these demands," he said. "We need you, business leaders, our economic development pacesetters and our government leaders -- especially our local, county, state and federal policy makers -- to understand what stands in the way of expanding, modernizing and advancing health care in Solano.

"The Affordable Care Act and the rest of this decade will reshape how we do what we do. It will be a wild and bumpy ride at times. But there's great opportunity in Solano to have more and better when it comes to health care."

The complete study, Economic Impact Report for Solano County Hospitals, can be found on the website of the Hospital Council of Northern and Central California, www.hospitalcouncil.net, or at solanoedc.org.

Follow Staff Writer Melissa Murphy at Twitter.com/ReporterMMurphy.

Study looks at hospitals’ economic impacts

By Barry Eberling November 29, 2012

FAIRFIELD — Solano County’s five privately operated hospitals support or generate more than 11 percent of the county economy, according to a new report.

“We don’t often think of hospitals as economic engines,” Rebecca Rozen of the Hospital Council of Northern and Central California said at Wednesday’s Solano Economic Development Corp. breakfast.

The report by Robert Eyler of Economic Forensics and Analytics argues that local hospitals are indeed big economic players. Eyler presented the results to about 125 people who attended the meeting at the Hilton Garden Inn.

Eyler talked about effects that local hospitals have that go beyond their own 4,085 employees and daily services. These ripple effects extend into such areas as hospital workers supporting local restaurants and hospitals buying supplies.

“Very little of economic life in Solano County goes untouched by hospitals,” his report said.

Putting everything together, Eyler found that local hospitals support and generate $1.25 billion in annual business revenue, about 7,830 jobs and $64 million in state and local tax revenue.

Eyler looked at NorthBay Healthcare’s NorthBay Medical Center in Fairfield and VacaValley Hospital in Vacaville, Kaiser Permanente’s Vallejo and Vacaville hospitals and Sutter Solano’s Vallejo hospital. He did not include David Grant Medical Center at Travis Air Force Base.

He also explored the effects of hospital capital projects. Every $50 million that hospitals spend on construction and expansion generates another $24.5 million in business revenues, 250 jobs during construction and $2.27 million in local and state taxes, he said.

NorthBay Healthcare has three capital projects planned over the next four years, with more than $100 million in construction, NorthBay Healthcare President Gary Passama said.

NorthBay Heathcare has announced plans to build what it calls a “health village” with a cancer center and medical fitness center at its VacaValley hospital. It plans to construct a second building at its Administrative Center on Business Center Drive in Fairfield. It plans to do construction work at NorthBay Medical Center.

Eyler said that construction itself is only part of the economic impact of hospital capital projects. The subsequent growth in hospital services when the project is finished creates new business revenue, jobs and wages, which in turn have a ripple effect on the county’s economy.

The study is more than a snapshot in time, Eyler said. Data can be used to determine what assets are needed in the community to support hospital growth, so hospitals don’t have to spend money in other counties.

“The bane of economic development is leakage,” Eyler said.

Reach Barry Eberling at 427-6929 or beberling@dailyrepublic.net. Follow him on Twitter at www.twitter.com/beberlingdr.

Report: Solano hospitals infuse $319M into economy

Sacramento Business Journal by Kathy Robertson, Senior Staff Writer

Date: Wednesday, November 28, 2012

The five privately operated hospitals in Solano County are responsible for more than 11 percent of the local economy — and could grow even more important in the future — according to a study released Wednesday.

The hospitals pay almost $319 million annually in wages, with 4,085 employees in January 2012 accounting for slightly more than 2 percent of the total employment payroll in Solano County.

Annual revenue from hospitals represents more than 7 percent of total revenue generated by Solano County businesses overall. Because of their links to education and demand for skilled workers and medical professionals across multiple job classifications, hospitals heighten their economic impact by paying good wages and purchasing supplies, concludes the study by Economic Forensics and Analytics in Petaluma.

The five hospitals in the report are: Sutter Solano Medical Center in Vallejo, Kaiser Permanente Medical Centers in Vallejo and Vacaville, and NorthBay VacaValley Hospital in Vacaville. The study was commissioned by the Hospital Council of Northern and Central California.

“Hospitals are an economic engine for the community,” Robert Eyler, an economics professor at Sonoma State University and principal of the consulting firm that did the study, said in a news release. “They generate support for education, jobs and businesses, all the while continuing their critical mission of providing health-care services locally.”

For a PDF download of the economic impact study, click here.

Study: Solano County hospitals a major driver of local economy

By Dan Verel, Business Journal Staff Reporter

  

FAIRFIELD — The five privately operated hospitals in Solano County make up more than 11 percent of the local economy, making health care a key driver that could be even more important in the future, according to a new study that details the economic impact of Solano County’s hospitals.

“Hospitals are an economic engine for the community,” said Robert Eyler, Ph.D., an economics professor at Sonoma State University and lead author of the report, which was commissioned by the Hospital Council of Northern and Central California (hospitalcouncil.net). Dr. Eyler is also principal of Economic Forensics and Analytics, which conducted the study. “They generate support for education, jobs and businesses, all the while continuing their critical mission of providing health care services locally.”

Dr. Eyler presented the findings today at a Solano Economic Development Corporation (SolanoEDC.org) breakfast meeting at Hilton Garden Inn in Fairfield.

Hospitals included in the study were Sutter Solano Medical Center in Vallejo, Kaiser Permanente Medical Centers in Vallejo and Vacaville, NorthBay Medical Center in Fairfield and NorthBay VacaValley Hospital in Vacaville.

The study found that as of January those hospitals employed approximately 4,085, slightly more than 2 percent of total payroll jobs in the county. They also pay nearly $319 million per year in wages.
Additionally, the number of workers has grown since 2001 and likely will continue to grow as hospitals add new services, expand or build new facilities. And annual revenue from hospitals represents more than 7 percent of total revenue generated by all Solano County businesses, according to the study.

The wider economic impact of hospitals in the last four years includes:

• More than $1.25 billion in business revenue.
• More than 7,800 jobs in hospitals and outside those health care systems.
• More than $64 million in state and local tax revenue.

“Because of their links to education and their demand for skilled workers and medical professionals across multiple job classifications, hospitals heighten their economic impact by paying good wages and salaries and purchasing supplies,” the study said.

Having a trio of robust health care systems in the county — Sacramento-based Sutter Health, Oakland-based Kaiser Permanente and Fairfield-based NorthBay — prevents precious payroll and the purchase of goods and services from escaping Solano County, according to the report. Otherwise, “economic leakage can occur when hospitals spend on goods and labor outside the local market.”
“They provide services locally, rather than allowing adjacent counties to garner these patients or clients and thereby take income away from Solano County,” the report said.

If local policymakers and developers can continue to attract, retain and expand businesses that help support the growth of hospital services, the local financial and social impact of Solano’s hospitals would increase, according to Dr. Eyler.

The likelihood of those hospitals expanding operations within the county can help propel the county out of lingering economic doldrums, according to the report. Hospital construction could help expand the “financial dimensions throughout the county economy.”

Every $50 million spent annually on hospital improvements or new construction contributes:

• An additional $24.5 million bump in business revenue in the community.
• More than 250 new jobs while the project is taking place, including construction jobs to support an industry otherwise hurt by the slow economic recovery.
• Creation of more than $2.27 million in state and local tax revenue.

The complete study, “Economic Impact Report for Solano County Hospitals,” is posted on the websites of the Hospital Council of Northern and Central California and the Solano Economic Development Corp.

Study Measures Economic Impact of Solano Hospitals

            Results of the economic impact of Solano County's five hospitals – jobs, payroll, new construction and spinoff benefits – will be revealed on Nov. 28 at a breakfast meeting of the Solano Economic Development Corporation.

            Executives of three hospital systems will add their perspective to the findings of Dr. Robert Eyler of Sonoma State University, the keynote speaker who conducted the study for the Hospital Council of Northern California.

Panelists for the event include Max Villalobos, Senior Vice President of the local region of Kaiser Permanente; Gary Passama, President and CEO of NorthBay Healthcare; and Terry Glubka, CEO of Sutter Solano Medical Center.

            "Healthcare and hospitals are critical parts of our economic engine," Sandy Person, Solano EDC president said. "They generate significant benefits in terms of education, jobs and other businesses, in addition to providing essential care to our residents.”

              The event begins at 8:00 a.m. at the Hilton Garden Inn in Fairfield.  Cost is $25 for Solano EDC members and $35 for non-members. To register call 707 864-1855, or e-mail: pat@solanoedc.org.

            Sponsors for the November meeting are: Hospital Council of Northern and Central California, NorthBay Healthcare, Sutter Health and Kaiser Permanente.

 

The program is one of the monthly breakfast meetings sponsored Solano EDC to provide private sector, government and community leaders with information on economic issues and industries.  They are made possible by the Solano EDC Chairman Circle Members; Fairfield-Suisun Sewer District, Solano Transportation Authority; Syar Industries, Solano Garbage Company and Republic Services, Inc.

Political columnist predicts few surprises this election

By Melissa Murphy/ MMurphy@TheReporter.comthereporter.com
Posted: 11/01/2012 01:07:51 AM PDT

Halloween isn't the only scary thing this time of year -- politics are too.

 

That's how Political Columnist Dan Walters on Wednesday painted this year's election with less than a week before voters head to the polls.

 

"It's an odd election in some respects," he said to a room full of city and business leaders at a Solano Economic Development Corporation breakfast.

 

He predicted that in California, President Barack Obama will receive the most votes toward his re-election and it won't be any surprise that United State Senator Dianne Feinstein will hold onto her post representing California.

 

He added that there were two interesting aspects added to the election structure for this year, though, the top two candidates receiving the most votes in the primary, regardless of political party, moved on to the regular election and district lines were redrawn by an independent party with no regard to the location of the incumbents.

 

The Sacramento Bee columnist also added that "almost certainly" the Democrats will not regain control of the House of Representatives.

 

He explained that millions of dollars are being dumped into campaigns for 11 ballot measures in California and it will likely continue.

 

He said Gov. Jerry Brown or "Brown 2.0," as he called him, went straight to the ballot with Proposition 30, which would increase sales tax from 7.25 percent to 7.50 percent statewide and create four high-income tax brackets for taxpayers with taxable incomes exceeding $250,000, $300,000, $500,000 and $1 million.

 

"It isn't doing well," Walters said of the proposition. "He campaigns, (support) goes down. He's not the best salesman for his own measure."

 

He added that the sales tax part of the proposition is likely to blame for it dragging.

 

However, if Proposition 30 doesn't pass, there will likely be a "political war" between counties, schools and colleges who will fight over a "shrinking pot of money."

 

"It's bad tax policy," he said. "We become more dependent on a few wealthy and their success in the stock market. ... It's dangerous."

 

He said the design of the proposition will last longer than Brown is in office, but the money source has an end date.

 

One tax measure Walters believes is likely to pass is Proposition 39, an income tax increase on out-of-state businesses that would not effect California-based companies or residents.

 

Most of the audience, however, has already voted and that made Walters question the need for his talk.

 

He admitted that elections are largely conducted by mail.

 

"Campaigning at the last minute is less effective," he said.

 

Follow Staff Writer Melissa Murphy at Twitter.com/ReporterMMurphy

Columnist gives stories behind state ballot issues

By Barry Eberling
From page A1 | November 01, 2012 | Leave Comment

FAIRFIELD — Political columnist Dan Walters on Wednesday shared views on the upcoming election that go beyond what can be found in advertisements or the voter’s pamphlet.

Walters, who writes for the Sacramento Bee and whose columns appear in the Daily Republic, talked about many of the 11 propositions, including Proposition 40, which addresses redistricting, and Proposition 30, which is a tax measure backed by Gov. Jerry Brown. He compared the behind-the-scenes maneuverings to a popular Mad magazine Cold War comic feature.

“That’s what a lot of this is about, it’s ‘Spy vs. Spy’,” Walters said.

Walters spoke at the monthly Solano Economic Development Corp. breakfast. More than 100 civic and business leaders attended the event at the Hilton Garden Inn.

Proposition 30 would increase the state sales tax by 0.25 percent and increase taxes on the wealthy. Its failure would supposedly trigger $6 billion in budget cuts that mostly affect education, though Walters said education advocates could challenge the trigger cuts in court.

An audience member asked what would happen if the measure fails, which Walters said could well happen.

The hole in the state budget would be $10 billion to $11 billion, not $6 billion, Walters said. That’s because other revenue is less than what the state is expecting.

“Political war would break out,” Walters said. “How many of you are here from county government? You’re going to be right in the middle of those wars.”

Solano County already faces budget challenges with no changes to the political equation. It faces a general fund structural deficit of about $13.7 million next fiscal year, though it can draw on savings to cover the shortfall.

Fairfield City Councilwoman Catherine Moy asked if cities would be affected by Proposition 30’s fate. Fairfield is struggling with budget shortfalls and has warned of drastic cuts if a proposed 1 percent sales tax on the November ballot fails to pass.

“Cities are probably not in this war,” Walters said. “It would be counties, schools and colleges mostly. They would be fighting over a shrinking pot of money. It will be pretty bloody, I expect.”
But Proposition 30 is bad tax policy, Walters said. Revenues would depend largely on how well about 150,000 people are doing in the capital markets, which is volatile. Plus, it guarantees counties would get $5 billion to help pay for state realignment policies, even though the tax is temporary.

Perhaps the best thing in the long run is for the proposed taxes to be defeated, Walters said. Then Brown and the Legislature might look at tax policies, he said.

An audience member asked about redevelopment. The state in February dissolved redevelopment agencies, such as the one formed by Fairfield. In Fairfield’s case, the lost revenue blew a hole in the city budget. Also, the city over the decades used redevelopment to spur economic development, declaring areas such as Green Valley as blighted so it could spend future property tax increases there on infrastructure.

Redevelopment is dead, despite efforts to revive it under a different name, Walters said. Redevelopment became somewhat of a monster over time, though he understands why cities used it as they did, he said.

“I understand why Fairfield declared swampland to be blighted,” Walters said.

Proposition 40 is a referendum on a redistricting commission’s newly drawn lines for state Senate districts. Walters said Republicans wanted it on the ballot because Democrats under the new lines are likely to get a two-thirds majority in the Senate in Tuesday’s election. Republicans had hoped the proposition would prompt the state Supreme Court to suspend the new district lines for the Senate until the referendum got settled.

But the Supreme Court refused and Republicans lost interest in the issue. Republicans don’t really want voters to overturn the new lines now that the Supreme Court gambit for 2012 has failed. That’s because the party has a chance to pick up seats under the new lines in 2014, Walters said.

Proposition 37 calls for the labeling of genetically altered foods. But, Walters said, the initiative is so complicated that no one knows what it would really do.

“Maybe it’s on purpose,” Walters said. “Confusion is the area in which clever lawyers see the potential for a lot of business.”

Walters described the government reforms called for by Proposition 31 as the latest effort in a cottage industry called “Fixing California.” While Walters expressed doubt that Proposition 31 is the solution, he didn’t question that California needs fixing.

Reach Barry Eberling at 427-6929 or beberling@dailyrepublic.net. Follow him on Twitter at www.twitter.com/beberlingdr.