Press Release Tripp Umbach Report

Contact: Retha Sherrod (202) 828-0975 [email protected]

Embargoed for release until 11:00 A.M. EDT, October 8, 2009: U.S. Medical Schools, Teaching Hospitals Continue to Drive Local Economies Washington, D.C., October 8, 2009—A new report released today by the AAMC (Association of American Medical Colleges) reveals that its member medical schools and teaching hospitals had a combined economic impact of over $512 billion on their state economies and the nation overall in 2008. Prepared for the AAMC by the consulting firm Tripp Umbach, the report found that the 131 accredited U.S. medical schools and nearly 400 major teaching hospitals represented by the AAMC employed more than 1.86 million individuals on a full-time basis, and were directly or indirectly responsible for 3.3 million full-time jobs. This means that one out of every 43 wage earners in the United States depends on an AAMC-member institution for his or her livelihood. “U.S. medical schools and teaching hospitals are substantial economic engines in terms of jobs, state tax revenues, and economic growth,” said AAMC President and CEO Darrell G. Kirch, M.D. “While the recent recession has certainly challenged every sector of our financial system, AAMC-member institutions continue to be strong economic drivers for their communities, their states, and the nation.” Even though the period examined in the report ends in mid-2008—prior to the economic downturn last year—market data during the recession suggest that employment at medical schools and teaching hospitals has remained stable and, in some instances, has increased during the last several months. These data coincide with recent information from the U.S. Bureau of Labor Statistics, which indicated that half of the 30 fastest growing occupations in 2009 were in health care. “Academic medical centers have maintained their status as a recession-proof industry, pumping billions of dollars into the national economy annually,” said Paul O. Umbach, founder and senior principal of Tripp Umbach. The overall $512 billion impact on the national economy, attributable to AAMC-member medical schools and teaching hospitals, includes institutional and employee spending, and --more--

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spending by patients (external to the hospital), their families, and visitors. These direct expenditures are recirculated in local economies as the initial recipients “respend” a portion of this income within a given state. Hence, for every dollar directly spent by a medical school or teaching hospital, an additional $1.30 is generated. Medical schools and teaching hospitals also produced more than $22 billion in state tax revenue in 2007-2008 through income and sales taxes, corporate income taxes, and capital stock/franchise taxes paid by businesses that collect revenue from these institutions. To read the complete report, “The Economic Impact of AAMC-Member Medical Schools and Teaching Hospitals, 2008,” go to: www.aamc.org/economicimpact.

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The Association of American Medical Colleges is a not-for-profit association representing all 131 accredited U.S. and 17 accredited Canadian medical schools; nearly 400 major teaching hospitals and health systems, including 68 Department of Veterans Affairs medical centers; and nearly 90 academic and scientific societies. Through these institutions and organizations, the AAMC represents 128,000 faculty members, 75,000 medical students, and 110,000 resident physicians. Additional information about the AAMC and U.S. medical schools and teaching hospitals is available at www.aamc.org/newsroom.