New Study Explains Why UAMS is Such a Vital Force in Arkansas’ Economy

By todd

“We are proud of our role as one of the state’s most important economic enterprises,” said UAMS Chancellor I. Dodd Wilson, M.D. In FY 2003 (July 1, 2002-June 30, 2003), UAMS spent $683,916,924 on employee salaries, supplies and services, scholarships and grants, and construction.

Together with its affiliates, Arkansas Children’s Hospital (ACH) and the Central Arkansas Veterans Healthcare System (CAVHS), where UAMS College of Medicine physicians and faculty provide clinical care, perform research and teach, UAMS’ total expenditures were about $1.27 billion.

“When we consider the overall economic impact of UAMS and its affiliates, using economists’ customary multiplier of three to reflect “re-spending” throughout the economy, the annual figure is approximately $3.8 billion,” Wilson explained.

UAMS is the state’s only academic health center, its leading biomedical research institution and a major employer. Many Arkansans don’t realize that only 12 percent of UAMS revenue comes from the state. The rest of the revenue comes from clinical income, research grants and contracts, fund raising and auxiliary income, and tuition. Tuition only accounts for 2 percent of the revenue. Revenue from patient visits to the Little Rock campus was $328,455,572.

There are several ways UAMS infuses money into Arkansas’ economy. First, UAMS is one of the state’s largest employers with almost 9,000 employees. The employees at UAMS are important to Arkansas’ tax base. During FY 2003, they paid an estimated $74 million in local and state taxes.

Of those employees, an estimated 7,500 own their homes. While the Little Rock campus of UAMS is located in central Arkansas, about 30 percent of UAMS employees live outside Pulaski County in 69 of Arkansas’ 75 counties, contributing to local economies in almost every part in the state. They boost the economies through their spending as consumers, by purchasing vehicles and shopping for food, clothing and other goods.

In addition, UAMS employees not only live in many counties throughout Arkansas, but they also work in programs throughout the state such as the UAMS Area Health Education Centers (AHECs) and the UAMS Kids First programs, day programs for children with serious health and developmental needs located in 10 sites in Arkansas. Also, thanks to an appropriation from the state’s share of the nationwide tobacco settlement and generous gifts from private donors, the Donald W. Reynolds Center on Aging, located on the Little Rock campus, has established satellites in Jonesboro, Texarkana, Springdale, El Dorado and Pine Bluff, with plans for more satellite locations.

Patients at UAMS and its affiliates generate money for the state economy as they pay for lodging, meals and recreation during extended stays. UAMS draws patients from around the nation and the world. During FY 2003, patients came to UAMS from almost every state and several foreign countries, paying approximately $93 million for inpatient and outpatient care.

For instance, the Myeloma Institute for Research and Therapy at UAMS, the world’s largest center for the treatment of multiple myeloma, generates an estimated $166 billion for the Arkansas economy – economic activity that would not occur without the patronage of out-of-state and international patients. Of the estimated 1,600 patients who each year visit the institute located inside UAMS’ Arkansas Cancer Research Center, 83 percent are from outside of Arkansas, and they spend an estimated $23 million on lodging, meals, entertainment and transportation in the state.

Research conducted at UAMS also brings external funding to the state in the form of grants and contracts from private organizations and federal agencies. In FY 2003, UAMS scientists received approximately $104 million in grants and contracts for research and related activities. UAMS participates in several formal and informal research consortia in the state, including the Arkansas Biosciences Institute (ABI), a consortium housed at UAMS that is funded from the state’s share of the nationwide tobacco settlement. In its first two years, ABI was given $18 million from the Arkansas General Assembly, which thus enabled scientists in the institute to obtain an additional $33 million in external funding.

Through its research, UAMS also creates spin-off companies that provide highly paid technical jobs for many Arkansans. For example, the Center for Toxicology and Environmental Health (CTEH) in Little Rock, a “graduate” of UAMS BioVentures, has grown in six years from eight employees to 60 employees. Another example of a company created by UAMS BioVentures is Safe Foods, Inc. of North Little Rock. Since its founding in 1998 with two employees, Safe Foods has grown and now employs 18 people.

UAMS is the doorway to a dynamic and growing segment of the job market. UAMS offers residency training, degrees and certificates in a wide variety of cutting-edge health care fields. Most of the university’s graduates remain in the state and earn relatively high annual salaries, generating economic benefits for Arkansas throughout their careers. Overall, FY 2003 graduates of UAMS earned an estimated $44,866,308 in their first year of employment – income that moves through the state’s economy just as UAMS’ expenditures did.

Finally, UAMS acts as a safety net health care facility for many Arkansans who don’t have health insurance, who are unable to pay, or who are covered by Medicaid. If UAMS didn’t provide these services, the health condition of many Arkansans would deteriorate and lead to even greater health care costs in the future.