Mon-Vale Health Resources, Inc., the mid-Monongahela Valley’s largest health care system, continued to have a strong impact on the region’s economy. That point is emphasized in a report, Pennsylvania Hospitals: Partners for Economic Prosperity, released by The Hospital and Healthsystem Association of Pennsylvania (HAP). The study summarizes numbers for 2005 and reaffirms the positive effects Pennsylvania’s hospitals have on their communities.

“ Our Health System is a cornerstone of our community, providing quality care to all who seek the services we offer at Monongahela Valley Hospital and sites located off campus throughout the area,” Louis J. Panza Jr., president and chief executive officer of Mon-Vale Health Resources, Inc., parent company of Monongahela Valley Hospital, said. “At the same time, we also are an economic catalyst to the region by providing stable, well-paying jobs; stimulating multiple business opportunities in other fields; purchasing local goods and services, and contributing to the tax base at the local, state and federal levels.”

To give an idea of that economic impact, Panza said total spending within the health system in 2005 was $112,674,238. The ripple benefit was another $127,783,853, which means the total benefit of MVHR spending eclipsed $240-million ($240,458,091).

In the category of salaries, MVHR employees received $45,942,406 during 2005. The ripple benefit figure was $34,456,805 and the total output of salaries reached $80,399,211.

To further highlight the MVHR economic impact, for the year involved in the HAP study, the $45,942,406 expended in salaries and benefits in turn generated federal, state and local tax revenues in excess of $13-million. Since moving to its current location in Carroll Township in September 1978, MVHT has fueled the local economy in salaries alone to the tune of over three-quarters of a billion dollars. In keeping with its mission, the health system also provided more nearly $2.5-million in charity care during last year alone.

“ Those figures help represent our confidence and investment in and our obligation to our community,” Panza said.

“ Like our mid-Monongahela Valley communities, many communities throughout the Untied States not only count on their hospitals and health systems for medical care, but also as their largest employer,” Panza continued. “In addition to providing quality health care, hospitals and health systems play a critical role in keeping local and regional communities economically viable. That has been a vital part of our Mission throughout our history and we remain firmly committed to meeting that responsibility.”

In addition to the spending and salaries figures, the HAP report shows that Mon-Vale Health Resources, Inc. had 1,176.6 full-time employees system-wide in 2005 and generated 1,032.9 ripple jobs for a total of 2,209.5 in the region. As the largest employer in the mid-Monongahela Valley and the second largest in Washington County, MVHR employs over 1 percent of all persons working in the county.

“ It also is important to note that MVHR has been ranked constantly among the 50 largest Pittsburgh-based employers by regional publications, and that puts us in some very select company,” Panza said.

While Mon-Vale Health Resources accounts for nearly 1,200 of the more than 2,000 FTEs noted in the accompanying Economic Impact box, the other 1,032.9 ripple benefit jobs are generated in other ways. For instance, when a member of the MVH Medical Staff opens a practice in this area, he or she hires a variety of staff. And like MVHR employees, those workers also purchase goods and services locally.

Panza explained that the labor income multiplier for hospitals is 1.86. This means that every dollar spent in employee compensation in the health system setting results in 86 cents of wages to other Pennsylvania industries. The federal Bureau of Economic Analysis further notes that the employment multiplier for Pennsylvania hospitals is 1.996, suggesting that for every hospital job, one additional job is supported within the state.

Non-payroll expenditures for MVHR’s health system include the purchase of utilities, food, drugs, furniture, appliances, transport vehicles, rental space and storage. These expenditures for 2005 totaled an additional $66,731,832.

“ During our 28-year presence at the site in Carroll Township, our health system has continued to grow with numerous major projects on campus and in our community – i.e., The Residence At Hilltop assisted living community, Mon-Vale HealthPLEX and the MVH Center for Fitness and Health, Mon Valley Care Center and Spartan Medical Facility, Valley Outpatient Rehabilitation sites in five locations, Healthy Directions,” Panza said. “We also have constantly invested in capital improvements involving cutting edge equipment and technology and traditional equipment such as beds and monitors for patient evaluation.”

As noted in the HAP study, capital needs are not determined in isolation on a per project basis. A health system’s strategic plan is the driving force – short- and long-term goals and the steps needed to achieve them. And as the Healthcare Financial Management Association points out, a hospital’s financial plan is just one component of operationalizing the strategic plan and includes actions to ensure necessary operating margin and profit margin, funds allocated to capital projects, and projections regarding the margin and other financial indicators necessary to cover capital costs and debt service.

How do the MVHR numbers stack up against those elsewhere in Pennsylvania? According to the HAP report, Pennsylvania’s hospitals and health systems annually:

• Provide a total contribution of nearly $71-billion to the Commonwealth’s economy with $29.8-billion in direct total spending and $41.1-billion in secondary spending.
• Support the employment of nearly 550,000 Pennsylvanians with more than 275,000 in direct employment and some 275,000 in secondary employment.
• Generate total labor income of nearly $21.4-billion.

“A common misconception among the public, payers and sometimes even health care professionals themselves is that a health system can operate at a break-even point as long as it is covering its day-to-day cash needs,” Panza said. “But the reality is that, to access capital – i.e., obtain a loan – when a hospital needs it, the hospital must have the same fiscal health as any other enterprise.
“ I’m pleased to say that in doing all of this and, at the same time, facing numerous challenges that threaten our day-to-day operations, Monongahela Valley Hospital and Mon-Vale Health Resources, Inc. have been able to maintain a pattern of fiscal responsibility, which is vital to our Health System and, more important, to our community.”

Panza said statistics detailed in the HAP report, and others like it, “constantly signify our independent Health System’s role as a complete, viable and vital community resource.”

“ They offer a reminder of the mandate that we must be here to serve the health care needs and the economic well-being of our community,” he said.

Summary of MVHR’s Economic Benefit to the Region’s Economy