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.