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3 <br />~~- ~- <br />_ ,~~w; ~=~.~'~~ <br />Economic Development <br />Commission <br />It seems wherever you turn, there are signs of a remarkable surge in hospital <br />construction. Here in the Raleigh/Durham region according to the Triangle Business <br />Journal (1/25/09) there is phenomenal growth in hospital construction. As of January <br />2009 there has been over 1.5 billion dollars of construction proposed or currently <br />underway in hospital construction in the triangle. Most experts agree that this will in fact <br />change the look of area health care and shift market share in unpredictable ways. <br />At this point in time it is very difficult for me to quantify the actual impacts of constructing <br />and servicing a 68-bed, $227 million hospital in Hillsborough. It's my opinion that the <br />UNC health care system submitted some impact numbers in their application to build <br />the facility, to the state's Division of Health Service Regulation's Certificate of Need <br />Section, but how significant an effort in determining the economic impacts remain to be <br />seen and what gets released to the public should be forthcoming. <br />What we would hope to find is a study using input-output models that determine <br />economic multiplier affects developed by the United States Department of Commerce's <br />Bureau of Economic Analysis, the output multiplier considers the "ripple" effect of direct <br />hospital expenditures on other sectors of the economy, such as medical supplies, <br />durable medical equipment and pharmaceuticals. Economic multipliers are used to <br />model the resulting impact of a change in one industry on the "circular flow" of spending <br />within an economy as a whole. <br />Even if the affects are yet to be determined there are many objective conclusions that <br />can be drawn in building hospitals. I believe these basic principles would be relevant to <br />this situation: <br />• Health care attracts external dollars <br />o In this case health care will attract external dollars into the community <br />from <br />- PO Box 1177 • Hillsborough, NC 27278 <br />(919) 245-2325 • FAX: (919) 644-3008 <br />EMAIL: edcmailCa~co.orange.nc.us • WEB ADDRESS: www.co.orange.nc.us/ecodev <br />outside the local area, probably Alamance and Chatham County's. <br />The UNC medical center and health care employees are purchasers of local <br />goods and services <br />o keeps local dollars at home <br />o will have multiplier effects <br />