By the numbers: Rural Doctors and Rural Economies

A rural physician has great economic impact. Gerald Doeksen's studies demonstrated that a rural physician was worth 17 jobs and $343,706 in economic impact each year, considering the ambulatory component alone. Further studies by Doeksen and others can be found at the site, noting that health care is 10 - 15% of the local economy and one of the top 2 employers. For a calculation of total economic worth of RPAP since 1971 see model/medsch/by the numbers.XLS  the RPAP grads have contributed 2.2 billion dollars to the economy of rural Minnesota alone, with the most common impact figure.   Economics Medical Education and Rural Health     NPR item on Rural Reimbursement

 The Oklahoma Physician Manpower Training Commission has placed physicians for over 25 years. OPMTC physicians have served for 3100 physician FTE years. The cost to the state was 100 million for GME and 18 million for scholarships and 11 million for administrative/other. These physicians have returned $3.6 billion dollars of direct and indirect impact on an investment of 130 million dollars with 2.7 billion in impact in rural areas. This is just the dollar contribution. Obviously some physicians would have made these choices anyway. The commission has estimated that 15% of the physicians that they have placed would not have been there without the state investment, this has meant 445 million dollars going to the communities most in need in the state for only 130 million in tax dollars. Their figure for the impact of each physician on the community including practice, direct jobs, and indirect on hospital and nursing home and pharmacy was $954,000 per physician per year.   25+ Years Oklahoma Physician Manpower Training Commission from Center for Health Policy Research, Center for Health Sciences, 2345 Southwest Blvd  Tulsa, OK 74107

From National Center for Rural Health Professions in Rockford IL
each doctor or dentist in rural IL generates 1.94 additional jobs due to business and household spending
every nurse means 1.3 additional jobs
every dollar earned by the doctor, dentist, or nurse means $1.59 generated in the local economy
health care jobs were 9.2% of all local income in rural IL, in many cases second only to schools
16% of rural Illinois residents were employed in health care and related fields

Figures from the University of Minnesota note a rural physician as worth 1 million a year in economic impact.

Studies at the Center for Rural Health in Hazard note a figure of 2 million a year, based on the ambulatory component plus the physician's share of the hospital impact (4 - 5 inpatients average).

I saw this review and it is certainly consistent with the above figures. Each year, the average physician generates $1.54 million in inpatient and outpatient revenue for his or her affiliated hospital, according to a recent survey by Merritt, Hawkins & Associates. Primary care physicians bring an average of $1.27 million annually to their hospitals, while non-PCPs generate an average of $1.59 million per year.

A town of 2000 generates 3 million dollars in health care (figures by George Wright in Textbook of Rural Medicine p 286). $417,000 of this is rural primary care office visits. Using a 1.5 multiplier gives a $600,000 in economic impact figure for each year of practice.

Calculations of impact of RPAP with various methods at the following link at model/medsch/by the numbers.XLS

People in small towns continue to need well-trained physicians. The medical leaders in many of our medical schools and those that run governmental programs think it is perfectly acceptable to send a series of temporary rookie doctors to take care of them. Rural people know better. Their associations, especially the NRHA, know that those who take care of our nation need the best care. As rural medical educators, we believe in this too, and that is why we are working with the NRHA to graduate more and better rural doctors who will stay in and be a critical part of rural communities.

Just one example: medical leaders think that the major reason for the lack of physicians in small towns is the poor rural economy (Why Doctors Don't Go). They ignore two facts. 1) Physicians are key elements of the rural economy. Each rural physician generates 2 million dollars a year in economic impact (KY Center for Rural Health). 2) Medical schools can choose students that will choose rural practice (Rabinowitz).

If medical schools choose students likely to return to rural communities, then the poor rural economy will not be an issue. Policies at medical school or nationally that continue to foster shortages in physicians promote economic hardship and stagnation for rural communities and peoples.

Programs such as the Rural Physician Associate Program (9 months in rural preceptorship in MN at M-3 year) may cost $800,000 a year, but compare this investment each year since 1971 with the cumulative 7 billion dollar economic impact realized by Greater Minnesota alone, not to mention the impact of graduates to rural areas in other states. It would be difficult if impossible to find a similar program with such impact on rural areas.

Programs such as the Physician Shortage Area Program (at Jefferson Med School directed by Howard Rabinowitz) and the Rural Health Opp Program at Nebraska have minimal costs. These programs reach out to the right kind of high school and college students to get them admitted. The impact of the Jefferson PSAP is enormous with 21% of the rural family physicians in the state with the largest rural population, all of this with only 1 % of the state's medical students in a small track each year.

Executive Summary of The Current Economic Impact of Nebraska's Rural Hospitals on County Economies   RUPRI and NE Assoc of Hosp and Health Systems:

In 1993, Nebraska's 77 rural hospitals employed 13000 workers with a $250,000,000 payroll, the most prominent impact. This varies from 77 jobs and 1 million to 1300 jobs and $25 million. In the smallest towns with a hospital, this impact is clearly a critical part of the employment base.

Reports on Phelps County NE

Economic Contribution of UNMC Dept of Family Medicine

Economics Medical Education and Rural Health


Rural Health and Economics Senate Testimony


Someone once said, "It's the economy stupid" Well this summary is the economy in a nutshell. Rural physicians are key young professionals. Similar efforts can encourage other types of young professionals. With the young professionals goes the leadership and the economic impact and the health care and the education and the retention and the potential for recruitment and the potential for new jobs. With this comes a more balanced age distribution in rural areas. Given at least a bit better share of public health, health resources, and education resources, small towns will not just survive, they will thrive.

There's a paper by Doeksen et al

Measuring the Economic Importance of the Health Sector on a Local

Economy: A Brief Literature Review and Procedures to Measure Local Impacts (1997)


The consequences to the community of a closed pharmacy go beyond health care. Professor Gerald Doeksen at Oklahoma State University heads up the Operation Health Works project, which helps communities quantify the economic impacts of the health care sector. According to him, every job at a local pharmacy creates 1.2 to 1.6 other jobs in the community. And every dollar paid in salary generates 1.2 to 1.6 more dollars. For small, rural communities those numbers mean a lot. from fall edition of Rural Health News, story by Tom Rowley