US Physicians' Economic Impact: 12.6 Million Jobs and $2.3 Trillion

Marcia Frellick

January 11, 2018

Physicians support 12.6 million jobs in the United States — 17.1 jobs each — and contribute $2.3 trillion to the economy, according to a new report from the American Medical Association (AMA).

The report — prepared by IQVIA, formerly known as IMS Health and Quintiles — breaks down into four sectors the economic benefit of the 736,873 MDs and DOs in the United States (hospital or office-based) who care for patients. In addition to jobs and economic activity, the benefits reach to wages and benefits and state and local tax revenues. Physicians also contribute federal taxes, of course, but this paper did not calculate those contributions.

Physicians contribute $1 trillion in wages and benefits paid to workers, or an average $1.4 million each. Their contribution in state and local tax revenue that support their communities is $92.9 billion (an average of $126,129 for each physician). This paper looked at social insurance taxes (both employee- and employer-paid contributions), personal taxes (state and local and license fees, personal property taxes, etc), business taxes (profits and dividends taxes), and indirect business taxes (such as property and sales taxes).

Contributions Higher Than in Other Professions

Economic output and wages attributable to physicians are higher than for those who work in higher education, nursing or community care facilities, or home health and legal services, according to the researchers. Washington, DC, where legal services wages are higher, was the only exception. "This suggests that physicians compensate their employees well, which allows these employees to purchase services from other industries in the state, thereby stimulating their state's economy," the authors write.

Travis B. Singleton, senior vice president of physician search and consulting firm Merritt Hawkins, told Medscape Medical News that the AMA findings are aligned with the findings of their own research in 2017.

"We conduct a parallel study quantifying the amount of net revenue physicians in various specialties generate annually on behalf of their affiliated hospitals. The average for all specialties is $1.5 million but can be considerably over $2 million, depending on specialty and volume," he said.

Singleton said that the economic impact is often lost in discussions of physician workforce issues.

"Combine their obvious net inpatient and outpatient revenue with the lesser realized community economic impact doctors create and it's clear who drives the bus in healthcare economics," he said.

Doctors' economic impact comes through admitting patients to hospitals, ordering tests, writing prescriptions, hiring staff, buying equipment, and paying for services.

"The physician shortage will absolutely reduce access to care, but it will also blunt economic development in communities nationwide," Singleton said.

The report provides information on the economic impact of physicians nationally and in all 50 states and the District of Columbia. It used three primary data sources: the 2015 AMA Masterfile, 2015 medical practices data from a data aggregator, and the 2015 IMpact analysis for PLANning, an economic impact modeling system developed by the Minnesota IMPLAN Group.

AMA President David O. Barbe, MD, MHA, said in a press release, "The AMA's economic impact study illustrates that physicians are strong economic drivers that are woven into their local communities by the commerce and jobs they create. These quality jobs generate taxes to support schools, housing, transportation and other public services in local communities."

The AMA authors have disclosed no relevant financial relationships.

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