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Augusta Health’s Economic Impact Detailed in New Study

The Daily Progress
April 3, 2014

A new study of Augusta Health’s economic impact says the health system contributed to a total of more than 3,600 jobs in Waynesboro, Staunton and Augusta County and more than $400 million in annual economic output in 2013.

Augusta Health is responsible for nearly 8 percent of the total employment in its service area.

The analysis by Chmura Economics & Analytics was offered Tuesday to area government leaders from Waynesboro, Staunton and Augusta County. Augusta Health President/CEO Mary Mannix said the study offers a context for people to draw their own conclusions about the hospital.

Economic development leaders say the study confirms much of what they already knew about Augusta Health. While the hospital’s 2,423 employees make it the largest employer in the region, economic development officials say the hospital’s strong reputation makes it an important recruitment chip for new industry coming to the area.

“Augusta Health makes it very easy to sell health care in the area,” said Amanda Glover, Augusta County’s director of economic development. “One of the concerns folks coming from metropolitan areas is that they are accustomed to a level of health care. It is easy to sell the area because we have such a great hospital.”

Recent recognition has included Augusta Health being named one of the 100 top hospitals by Thomson Reuters in 2011 and 2012, and one of the 100 best hospitals in 2012, 2013 and 2014 by Healthgrades.

Glover said she has asked for a copy of the Chmura study so she can use it to show to industrial prospects.

Dennis Burnett, the executive director of the Shenandoah Valley Partnership, a marketing and recruitment organization for the Shenandoah Valley, said the hospital’s commitment to investment is another factor for potential industry.

“When we are hosting prospects they want a sense of community,” Burnett said. “They want to see that providers in the region are investing in the community. One of the biggest things we can use is that our health care systems continue to reinvest in the community.”

The Chmura study shows that between 2011 and 2016, Augusta Health has invested and plans to invest $129.3 million in building and equipment. The total annual impact of the capital investment is $9.4 million in spending and 69 jobs.

Mannix describes Augusta Health’s operation as “capital intensive and very expensive.” She said two roofs are being replaced on the 20-year-old hospital, and said Augusta Health is also replacing its chiller system. Mannix said there has been a commitment to purchasing “state of the art medical equipment.”

Mannix said while there is $28 million in debt remaining from the original hospital building, Augusta Health pays cash for other projects.

Waynesboro City Councilman Frank Lucente told Mannix that the hospital’s impact goes beyond its economic impact.

“It would be a real tragedy if the hospital was not here, a real blow to the community,” Lucente said. “It (the impact) goes beyond economics. Others would leave.”

Burnett said beyond the hospital’s appeal to prospective employers, it supports the area’s current industry.

“Look at what they do with our current employers with occupational and physical therapy,” he said. “If someone gets injured they can get treatment immediately.”

Chris Chmura, the president and chief economist of Chmura Economics & Analytics, said the future employment picture in the region for healthcare and social services jobs is a bright one.

While those areas are the largest local employment sector now with 20.7 percent, Chmura anticipates 2,000 additional jobs over the next decade.

“It is a good area to go into,” she said.

Hospital offered more than $29 million in community benefit

A study released Tuesday about Augusta Health’s economic impact estimates that the hospital had a community benefit of nearly $29.4 million in 2012.

The study, performed by Chmura Economics & Analytics, said the largest portion of that total came in charity care, right at $8 million. Hospital Spokeswoman Lisa Schwenk said charity care are documented case where a recipient of health care sought financial assistance because they would have difficulty paying for it.

More than $4.8 million came in a shortfall for Medicaid and nearly $3.8 million for Medicare. Hospital Chief Financial Officer Bob Riley said the shortfall is the result of the payments only being about 60 percent of the cost of services.

The hospital had a bad debt expense of nearly $5 million. Schwenk said these were the costs for services that were uncollectible.

Schwenk said the $4.8 million in community benefit programs include community screenings and health fairs and a treatment program in Fishersville for those with chronic conditions who have no insurance. Riley said prescriptions are also filled for those who have no insurance.

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