Findings Brief Economic Impact Assessment
McGehee Hospital
Operations and Strategic Projects 2015 – 2017

This brief presents the findings of an economic impact assessment of the ongoing operations of McGehee Hospital in Desha County Arkansas. Additionally, impact assessment findings for two of McGehee’s current strategic initiatives are presented.

McGehee Hospital’s annual total economic impact on Desha County is estimated at $13,170,068 for the year 2015. These effects are largely driven by the influence of the Hospital employee’s income stimulating additive economic activity as their spending filters through the economy. McGehee Hospital employees 104 people and its economic effects generate an additional 37 permanent jobs in Desha County.

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In the summer of 2017 McGehee Hospital will be opening its newly constructed Rural Health Clinic. This strategic initiative to expand the organizations infrastructure and capacity to provide primary care services for Desha County represents a $2.2 million investment and is estimated to yield $2.75 million in community level benefits during the year of construction. Estimated local direct employment in the construction of the facility is 15 workers with an additional 4 Desha County jobs being supported by the construction, primarily in the food services industry.

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A cornerstone of McGehee Hospital’s strategy for the future is the expansion of their primary care service capacity. With the addition of the new Rural Health Clinic, McGehee is initiating an effort to recruit new primary care physicians to their facility. It is estimated that recruitment costs for each additional physician will be $75,000. Based on our analyses, each physician recruited would generate $819,503 in total economic output in Desha County and adding 16 permanent local jobs. This represents nearly an $11 to $1 return on investment for the $75,000 recruitment cost per physician.

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About this brief:

This brief was prepared for the McGehee Hospital by faculty from the Rural Health Innovation and Transformation Program of the Fay W. Boozman College of Public Health at the University of Arkansas for Medical Sciences. Anaylses were conducted using IMPLAN 3.0 software. Much of the financial data utilized in the analyses were provided by McGehee Hospital. The analysts particularly wish to thank Bill Couch, CPA, FHFMA for his assistance in obtaining the data and for his guidance in developing revenue projections.

Release Date: 11/15/2016

About the Analysts:

Michael E. Morris, Ph.D.: Dr. Morris joined the faculty of UAMS in 2011, teaching finance and operations management courses. His doctorate is in health services research with a focus in health systems finance. Prior to entering academia, he was a senior level management consultant for over 20 years specializing in revenue cycle improvement. He holds professional certifications in healthcare management, healthcare finance and Lean Six Sigma.

Saleema A. Karim, Ph.D.: Dr. Karim joined the faculty of UAMS in 2014, teaching introduction to healthcare financial management and operations management. She completed her doctorate degree in Health Services Research from the University of North Carolina at Chapel Hill. Her past experience includes working at Emergency Health Services and the Nova Scotia Trauma Program in Halifax, Nova Scotia, focusing on quality improvement.

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