As a former health care human resources executive, I'm often drawn to the local hospital in whatever city I'm visiting. A city's health care environment reflects its social, cultural and economic state. Because the local medical center complex is often the largest employer in town, it would seem that strong fiscal returns would be rewarded to those cities that strategically aligned their economic development efforts to capitalize on growing this sector. Unfortunately, the health industry has historically been viewed as a local disaster, replete with quality of care issues, bureaucratic inefficiencies and high costs.
While the spiraling costs, the inefficiencies, and the future of reform are often talked about, little attention is given to health care jobs as springboards to enliven local and regional economies. The steady parade of doctors, nurses, technicians and support staff at our medical establishments provide cities with a huge multiplier effect on nearby housing, restaurants and retail businesses. The trickle-down effect spreads outward to hospital manufacturers, suppliers, pharmaceutical companies, and other ancillary firms that serve as the lifeblood of a functioning health care system. The economic activity of the medical business extends well beyond hospital walls; it's a high-octane job engine, with the buying power of health professionals helping to sustain struggling communities.
With current U.S. unemployment rates stagnating at high levels, the robust quantity of workforce activity resonating through hospital corridors is good news for our nation's cities and regions. According to the U.S. Department of Labor, 1.7 million new jobs have been added to the health care sector since 2001. This figure includes employment gains in health insurance, construction, pharmaceuticals, biotech, the life sciences and other complementary fields. More impressively, the DOL estimates that by 2018 there will be a 21% employment increase in health practitioners (1.6 million jobs) and a 29% increase in health care support roles (1.1 million jobs). Health care also currently boasts the lowest unemployment rate of any industry, and salaries average a respectable $43,700.
Cleveland, Ohio, is a prime example of a city that has undermined its economic potential by permitting dubious redevelopment efforts – centered on sports complexes and museums – to overshadow assets such as the Cleveland Clinic and the University Hospitals Health System, which together encompass 51,000 employees.
Like most Rust Belt cities, Cleveland sorely needs an infusion of jobs outside of the long diminished blue collar sector. It could build collaboratively on its health care niche, creating complementary clusters of medically related firms in the life sciences and health information systems that would bring new opportunities and life to the area. The city's world-class medical establishments could supply the ideal springboard for branding Cleveland as a global medical hub, rather than as the home of the Cleveland Cavaliers and the Rock and Roll Hall of Fame museum.
One Cleveland-area organization, BioEnterprise, is taking the lead in fueling the growth and commercialization of health care companies in the bioscience sector. A collaborative effort between top medical and higher education institutions in the region, BioEnterprise is a promising attempt to alleviate Cleveland's persistent difficulties in generating jobs and economic growth.
The potential economic impact of new health related establishments is also gaining attention in Shawnee, Kansas, where the Economic Development Council is pursuing plans for a Biosciences Development District to attract high-paying job opportunities. And in Solano County, California, local leaders have made savvy use of existing infrastructure, new capital investments and local tax policies to fuel growth in the emerging medical sciences corridor between Sacramento and San Francisco.
To build a successful future around health care jobs, cities must make creative use of their local and regional assets. For example, a four-year medical school in Spokane, Washington, according to a recent report entitled “America's Next Great Academic Health Center,” would support more than 9,000 new jobs by 2030 and generate nearly 1.6 billion in new economic activity for the area.
Here’s a concept of a model for job creation and economic growth: the Medical District Oriented Development (MDOD). These multidisciplinary districts would consist of a cluster of complementary stakeholders: health care entities (hospitals and medical centers, imaging facilities, community health centers, and private and specialty clinics); durable equipment manufacturers and providers, and pharmaceutical and life science research institutions. Livable communities, these districts would include housing, retail, and transportation options operating on the fringe of the medical campus setting.
Unlike the much discussed Transportation Oriented Development paradigm, MDODs would not be faced with the “cart before the horse” issue; there wouldn't be a question of whether to create demand before building the infrastructure or vice-versa. The magic behind MDODs would be a health care sector that already possesses a mature yet growing cadre of physicians, nurses, technicians and researchers who would serve as a captive audience for new development initiatives.
In Sacramento, the U.C. Davis Medical Center campus possesses many of the building blocks of a successful medical district. As the flagship safety-net hospital for Northern California, the Medical Center has successfully collaborated with local task forces and associations to support the redevelopment of nearby neighborhoods, bringing new jobs to the immediate area. It has also spawned new workforce housing, restaurants and other amenities in an area that has faced hard times.
In addition to collaboration between municipalities and medical institutions, and leveraging a region’s local assets, what else can cities do to manifest economic prosperity through health care centers? Chip and Dan Heath, the bestselling authors of Switch: How to Change Things When Change Is Hard, note that successful transformations begin when this question is asked: What's working now and how can we do more of it? For city leaders, the question becomes: How can we capitalize on the booming health care sector through new investments in multidisciplinary medical districts, including housing and transportation options?
When cities and regions choose to create synergies between their communities and their medical campuses, the prognosis is promising for an economic cure.
Photo: Christiana Care health workers submit Magnet Recognition Program documents to the American Nursing Credentialing Center.
Michael P. Scott is an associate with Centro, Inc, a Denver-based consulting firm focused on the future of our city centers. He can be reached at michael@becentro.com
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