Hefty Numbers: The Economic Impact of Physician Practices

Here’s a different, but important, look at the impact of physician practices: Massachusetts office-based physicians contribute $31.7 billion in economic output to the state and support 112,000 jobs. Those were some of the findings from a first-of-its-kind analysis done for the American Medical Association by The Lewin Group, a national healthcare policy research and management consulting group based in Virginia. The study reported on the economic impact of nearly 20,000 office-based physicians in the Commonwealth for the year 2009.

The study also found that Massachusetts office-based physicians support $23.5 billion in total wages and benefits and generate $1.5 billion in total state and local tax revenues.  

Reacting to the findings, MMS President Alice Coombs, M.D. said the report clearly shows the economic significance of the physician workforce as part of the state’s number one industry, as well as the critical need to improve the physician practice environment in the state, which, according to MMS annual evaluations, has been in a continual state of decline.

“A good physician practice environment produces many benefits,” Dr. Coombs said. “Patients will have more and better access to care, the state will have a stronger economy, and we will be better able to recruit and retain physicians to enhance our health care delivery.”

Additional key findings from The Lewin Group’s research: in comparison to other industries, office-based physicians almost always contribute more to local economies than the hospital, legal, nursing home, home health, or legal industries, and physicians provided an estimated $24.4 billion in charity care nationwide in 2008.

The complete report on Massachusetts is available here. AMA commissioned a national report, as well as individual reports for each state, and those are available from the AMA’s website.

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