UC Davis Health System is an engine of prosperity fueling the economies of Sacramento County, the Sacramento region and Northern California, generating more than 20,000 jobs and nearly $3.5 billion a year in economic output, a new, independent study of the health system’s economic impact has found.
The Center for Strategic Economic Research, an economic and demographic research firm based in Sacramento, recently concluded its study “Economic Impacts of the UC Davis Health System.” A synopsis and copy of the report are available online.
The study found that the health system’s impact is equivalent to that of the entire wood products economic sector in output and all employment in the waste management sector in Northern California. It also found that for every employee or dollar of output directly supported by health system operations, the Northern California economy gains an additional 1.1 jobs or $1.10 of output, respectively.
The center examined the health system’s economic impact on Sacramento County; the six-county Sacramento region, which includes Sacramento, Yolo, Placer, El Dorado, Sutter and Yuba counties; and Northern California (from the Oregon border south to Kern, San Luis Obispo and San Bernardino counties).
The assessment included the entire health system enterprise — UC Davis School of Medicine, UC Davis Medical Center, the Betty Irene Moore School of Nursing and UC Davis Medical Group, the 800-member physicians practice group, with outpatient clinics located throughout the Sacramento region.
Ryan Sharp, director of the Center for Strategic Economic Research, said the health system’s economic impact is enormous.
“The sheer magnitude of the economic impact of UC Davis Health System is close to $3.5 billion of economic output and more than 20,000 jobs,” Sharp said. “There is really nothing of this magnitude that we’ve examined recently.”
The study examined the health system’s economic activities in the following four areas:
- Education: Activities include faculty, staff and operational expenditures within the schools of medicine and nursing, and spending by students and by out-of-area visitors attending continuing medical education conferences and courses.
- Health care: Activities include support staff and operational expenditures within UC Davis Medical Center and UC Davis Medical Group, as well as School of Medicine faculty practicing medicine throughout the health system.
- Research: Activities include faculty, staff and operational expenditures through affiliated research centers and other funded research efforts within the health system.
- Facilities: Operations support activities relate to staff and operational expenditures for operational support services across all areas of the health system, spending on facility construction projects and community giving to targeting program-level activities.
Sharp said the report details the indirect impacts created by the multiplier, or “ripple” effect, as well as the health system’s direct economic impact.
UC Davis Health System has approximately 9,700 employees in Northern California, but supports more than 20,000 jobs through its activities and the activities of its employees, the study found. It has a direct economic output of $1.6 billion, but its indirect output is more than double that — nearly $3.5 billion in the north state, the study found.
Those impacts are created, for example, by the demand generated by UC Davis Health System that prompts suppliers of goods and services to respond by increasing economic activity, causing an indirect impact on the local and regional economies. Induced impacts are created through employee spending on goods and services from local establishments, which is sustained as a result of health system paychecks and other expenditures. The study found that the multiplier effect shows that for every employee or dollar of output directly supported by health system operations the Northern California economy gains an additional 1.1 jobs or $1.10 of output, respectively.