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Economic impacts of Plumas District Hospital studied

Linda Satchwell
Staff Writer
7/7/2010


Plumas District Hospital recently released an economic impact study it commissioned, at a cost of $5,000, through the Center for Economic Development at California State University–Chico.

The study analyzes the economic impact of the district on the local economy and tries to estimate the economic effects of a hospital closure. It does not, however, look at what might lead to closure or whether passage of Measure B would or could lead to closure.

In its introduction, the CED study describes PDH as “a district hospital that relies on patient care reimbursement and payments provided through a hospital property tax assessment district.”

The objective of the study “is to reveal possible consequences of losing this hospital and how that would impact the community’s levels of population, income, and business revenues.”

The CED reported, “Many of the negative effects on the local community, perhaps including some of the most important ones, are difficult to quantify ... while these potential impacts are impossible to quantify, it is quite possible that they are substantial.”

Among the possible or potential adverse factors that are not quantified in the report are: quality of life issues and adverse impact to businesses, which in turn might “have additional consequences for property values and local tax revenues,” leading to a downward spiral.

The CED then turned to those things it could quantify: “The gross economic impact of Plumas District Hospital, the impact of all operations, is nearly $30 million in revenue to businesses and organizations, $14.4 million in labor income (income to employees and business owners), and 288 (direct and indirect) jobs.     “This includes the direct impact of the hospital, itself, and a secondary impact (often referred to as a multiplier effect) of over $8 million in revenue to businesses and organizations, nearly $2.4 million in labor income, and 70 jobs.”

Having determined the economic benefits of PDH operations, the study then assessed its costs. PDH receives regular property tax payments ($349,460 in fiscal year 2008 – 09) and Measure A assessments (anticipated at $554,000 in FY 09 – 10) for a total of $903,460 in property tax payments.

The study points to $21.67 million in hospital expenditures that, if the $903,460 in property tax payments is subtracted, still shows a substantial positive impact to area households.

The study does not, however, address the question: Can the argument be made that PDH would not exist without the Measure A assessment?

The study considered “net migration to and from the district by age,” especially in populations that need care the most — the young and the elderly.

It also looked at how many physicians the hospital could have supported in the year 2000, and then detailed “hospital health care alternatives available to county residents.”

One item of interest is the population migration by age, which points to a large influx of people 60 years of age and older, and a concomitant decrease in every age group except, inexplicably, those in the 30- to 34-year-old age range.

“Older adults are an especially important demographic group for PDH,” according to the study, and the hospital can “expect its potential market to grow in the near future.”

The study offers a warning statement, as well: That population group might choose not to locate to the area if there weren’t a hospital available.

While PDH draws most of its patients from the larger Quincy area, it also has a substantial patient base in Indian Valley.     The study addressed patient “leakage” to other facilities, but most of that is for specialty services that PDH is never likely to offer, such as “major head and neck procedures ... (and) cardiac valve and other major cardiothoracic procedures.”

Finally, the study suggested, “Even if the hospital were to close, households may still lose all $903,460 of income (through regular and Measure A property taxes) annually in the near future.” According to the study, that is a reason to make certain that the hospital stays open.

To see the full study, go to pdh.org and look under News and Events.

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