Ripple Effect

Health Care Services Generate Another 23-Cents In Retail Sales In Local Economy

By Deb Hadachek Telescope News –

Health care services continue to be an economic driver inRepublic County.

In both Kansas and Republic County, the health care sector ranks fifth among all economic sectors behind agriculture, government and other trade services.

Health services employs 310 people, nine percent of all job holders in the county, according to a 2017 study prepared by the Office of Local Government at Kansas State University. Health-related businesses, which include the hospital, doctors, pharmacies, dentists, chiropractors and others, generated $13.2 million in income, says the study.

Employment in the ag sector was 736; and 499 government employees. Total ag labor income was $44 million, and government income was $25 million.

But the study says the full impact of the sector goes beyond the number of people employed and the wages they receive. The employment and income levels in the health sector have a significant impact on employment and income throughout other industries in the market area.

This secondary impact or“ripple effect” comes from local businesses buying and selling to each other and from area workers spending their income for household goods and services; the ripple effect spreads the economic impact of the health sector throughout the community economy.

“In the report, K-State researchers identify three primary ways health care influences local economic development: health care attracts and retains business, attracts and retains retirees, and creates local jobs,” says Tom Bell, president and CEO of the Kansas Hospital Association.

The study indicates that for every $1 generated in the hospital sector, another 23 cents in sales ripples through the economy. That means another $3.3 million in retail sales, says the report.

According to the Centers for Medicare and Medicaid Services, U.S. health care spending grew 3.9 percent in 2017, reaching $3.5 trillion or $10,739 per person. As a share of the nation’s Gross Domestic Product, health spending accounted for 17.9 percent.

A decade ago, national health care spending was $7,737 per person, and accounted for 15 percent of the GDP.


At Republic County Hospital in FY2018, approximately 75 percent of patients were Medicare-eligible, and about 10 percent were covered by Blue Cross/Blue Shield.

The hospital had $13.8million in gross revenues, of which $7.2 million was for outpatient services.

The hospital paid $6 million in wages and $1.8million in benefits to employees.