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Physicians Help Communities Prosper

A new study shows the positive economic impact of physicians on communities

IN SMALL TOWNS and big cities across America, physicians care for the sick and prevent illness. They are also creators of economic health, benefitting communities directly and indirectly. Now, a new report quantifies that impact, showing that physicians generate more jobs, higher wages and benefits, and tax revenue compared to other select industries. Physicians also support industries indirectly.

The American Medical Association hired IQVIA to conduct the analysis, which is the latest research effort showing the value of physicians to the economy. The AMA said the findings are important for policymakers and legislators, and it encourages members to share them with elected leaders.
Using the AMA Masterfile, the analysis was limited to 755,802 (73.9%) post-residency physicians whose major activity is the provision of patient care. “Physician” is defined as someone with a medical or osteopathic degree, office-based or hospital-based, employed as well as independent.

Economic Barometers
Direct physician impact is the value of four “vital” economic barometers: output, jobs, wages and benefits, and state and local tax revenue. Indirect impact includes the same barometers, but the values are generated by industries that are supported by physicians.

The total national impact is the sum of both direct and indirect economic impacts. State-level direct impacts are added up to calculate the total direct impact. While indirect impacts within a state are limited to effects within its borders, the report notes that these indirect economic effects often reach into neighboring states. For this reason, the total national economic impact is larger than the sum of the total state economic impact.

In 2015, physicians supported $559.6B in direct wages and benefits in aggregate across all states. The total amount of wages and benefits supported by patient care physicians at the national level was $1,044.9B (including the indirect wages and benefits supported by the industry), or an average of $1,417,958 per physician. At the state level, physicians supported a median of $8.9B and a mean of $16.7B in wages and benefits.

Physician economic impact varies across states and is dependent upon the number of physicians in each state as well as other factors, such as the general economy and the healthcare environment in particular. National health expenditures grew 5.8% in 2015 and accounted for 17.8% of GDP. Physician and clinical services expenditures grew 6.3% in 2015, an acceleration from growth of 4.8% in 2014, and the first time since 2005 that the growth rate exceeded 6.0%. Healthcare spending accounted for 17.2% of GDP in 2012.

MDs and Jobs
In aggregate across all states, the number of jobs directly created by patient care physicians (including the number of physicians themselves) was 3,545,399. The total number of jobs supported by patient care physicians at the national level was 12,575,602; the average physician supported 17.07 jobs in the economy. At the state level, physicians supported a median of 115,752 and a mean of 182,370 jobs. In aggregate across all states, physicians generated $821.6B in direct output in 2015. At the national level, patient care physicians generated $2.3T in total output, or an average of $3,166,901 per physician. At the state level, physicians generated a median of $18.9B and a mean of $32.8B in total output.

MDs v. Other Industries
The analysis compares physician economic impact to several industries (legal services, higher education, nursing and community care facilities, and home health). Physicians supported higher total wages and benefits than other comparable industries except for the legal services industry in the District of Columbia. At the national level, physicians supported $1,044.9B in wages and benefits, compared to $94.9B for home health and to $254.5B for legal services. Nationwide, physicians also supported 12,575,602 total jobs. Across the other industries, total jobs ranged from 2,629,559 for home health to 4,432,916 for nursing and community care facilities.

For Illinois, which has 30,258 physicians providing patient care, the total economic output comes to $73.2B, creating 396,856 total jobs, with total wages and benefits of $34.8B, and generating $3B in local and state tax revenue. The average total taxes per physician are $99,967.

Other industries lagged on jobs, with higher education, 121,211; nursing and community health facilities, 166,726; legal services, 163,750; and home health, 82,625 jobs. To read the complete study, visit the AMA website at

In a separate 2016 survey, the AMA found the single specialty group accounted for the largest share of physicians (42.8%), while 24.6% practiced in multi-specialty groups, 16.5% in solo practice and 7.4% in direct hospital employment. Movement toward hospital-owned practices and direct employment by a hospital appear to have slowed since 2014.

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