Forecast Economic Impacts of the Spokane Medical School

Update: The original economic study has largely imploded. As of 2014, its bogged down in politics and in fighting between the UW and WSU. There is no longer a target date by which the  Spokane med school would open.

 

It is pouring down rain again today so guess I will make some charts.

Data for these charts comes from “America’s Next Great Academic Health Science Center“, part of the economic study to justify a Spokane medical school.  I chose to create some charts in a different form than those that appear within the consultant’s report. The new charts tell a somewhat different and unexpected story than we’ve heard from the promoters.

According to the study, conservative and aggressive models were created for the estimates. It is not clear whether these charts represent the conservative, aggressive or a combination model.  The report section that I could see does not provide the range of potential forecasts.

As will be explained in a moment, local promoters appear to be counting growth that would occur whether there is a medical school here or not. This discovery was unexpected. While there are issues with the economic study, the larger problem is that its conclusions have been presented in a misleading way by local promoters.

Here is the chart from the study showing the overall economic impacts of a health science center (not a medical school per se).

I created a new chart to break out the components of this forecast economic impact. This chart is not available in the study:

The chart above shows the estimated economic impact of the different components of having a health science center in Spokane.  The largest single component is growth of the health care industry (the pink area labeled “Industry g..” but cut off in the legend) and the second is the nursing school growth. These account for half of the total 2030 estimate – and will almost certainly happen with or without the medical school.

The sum total is $1.6 Billion for Eastern Washington by 2030 and over $2 Billion for the state. As will be shown in a moment, much of this growth would occur whether a medical school was here or not.

The study itself is about the proposed economic impacts of the WSU-Spokane Health Science Center, of which the medical school is one part.  Local promoters have focused on the medical school and claim up to $2 billion in economic benefits from the medical school. That is misleading. Much of the growth described in the study will happen regardless of there being a medical school in Spokane.

The next chart is the same information, but in a form that makes this more obvious. Almost all of the economic impact by 2030 comes from the continuing growth of the health care industry (which would almost certainly happen without a medical school here) and WSU Nursing, which would also likely happen without a medical school here. They also include WSU Pharmacy in the total, which is moving to Spokane. The move was approved before the State approved half the funding to start construction on a new health science building that would house a future medical school.

Next, we look at the employment impact forecast.

Same information as the above chart, but in a different form to make this more obvious.

And again, we see the the large component of employment growth is the hospitals and health care industry itself, followed by a more than doubling in WSU Nursing and Pharmacy program employment in the last few years of the 20+ year forecast period.

They assume that a percent of graduates of the program will stay in Eastern Washington and thereby, increase employment and economic impacts. That’s fine. The implied argument is that health care workers would not come to Eastern Washington unless they were trained here. Interesting argument to put in a promotional study …

However, this thinking is flawed in terms of measuring medical school impact: whether or not there was a medical school here, the market will determine the number of health care workers needed in Eastern Washington. Whether they are produced here or not, most of this health care sector job growth and economic impact will occur anyway.  This is apparent from the pink line in the charts, above – it goes straight up from the very beginning, even though the other parts of the plan are still being implemented.

Don’t confuse what I just wrote – I support having the medical school here – but parts of this economic impact study, and specifically, how it has been presented to the public, are misleading. Major components of this growth would occur with or without the medical school.

Let’s state this another way if you do not understand. Demands for health care services drive the number of jobs. If there is no demand, there would be no jobs.   The medical school does not just create thousands of health care worker jobs unless there is market need. There is a market need and we would prefer to have the benefit of producing those workers locally. But ultimately, whether we produce them locally or not does not matter – if there is a market need, those workers will be trained somewhere and they will fill the available jobs. It does not matter if we have the medical school here or not.  Those jobs will occur anyway if the market demands them.

The genuine economic impacts are those of the health science center and WSU-Spokane itself, not the growth of the health care industry overall.

Finally, the statewide impacts.  And once again, the largest single component is growth of the health care industry. The following chart title is incorrect – this chart refers to the employment impact and the vertical scale is the number of jobs created state wide due to the Spokane Riverpoint campus health science program.

Outside of health care industry growth (which I argue will happen whether or not there is a medical school here), almost all of the growth in the other categories is in the last 7 years of the forecast period. The next chart shows the sum total economic impact for Eastern Washington.  As can be seen, about half the forecast impact occurs in the last 7 or 8 years of the 20+ year period – when the growth curve accelerates.

This puts most of the big growth way into the future when:

• The ability to forecast accurately is the least likely due to it being impossible to make assumptions 14 to 20+ years in the future with any accuracy.
• No one will look back at the original forecast

It appears the economic impacts of a Spokane medical school will be less than that advertised by promoters.  A reasonable guess is that the actual impact will be less than half of the top line number – which is not a bad result either.

Please read past comments on the art and difficulty of forecasting here.

I could be completely wrong but there is a lot of wiggle room in this economic impact forecast.  It would be better to see and understand the full range of forecasts and assumptions. Unfortunately, local promoters have misled the community about the impact of the medical school. An accurate statement would be that the WSU-Spokane health science center will have many economic impacts on the region, but the impact of the medical school is just one component of that.

The first sentence of this news article: “Jun. 11–A four-year medical school in Spokane would support more than 9,000 new jobs by 2030 and generate $1.6 billion in new economic activity, a new study says.” illustrates the effectiveness of misleading public relations. The statement appears to be completely wrong – and twisted into a lie.

Update: Controversy as UW bad mouths the WSU-Spokane medical school program and fails to recruit sufficient 2nd year students for the WSU-Spokane located  UW-WWAMI medical school program.

Data Tables

(Sorry – am unable to paste nice data tables here)

Med School impact in EW economy    2009    2017    2023    2030
WWAMI Med    4.3    17.4    92.4    200.2
WSU Pharm    47.7    64.4    86.4    106.3
EWU Health Sci    19.7    23.6    32.5    40.4
WSU Nursing    38.2    39.5    45.6    54.5
Riverpoint Other    5.6    10.8    21.2    30.5
WWAMI Grads    3.6    24.9    43.3    62.4
Industry growth    60.3    179.6    329.7    493.1
Research comm.    5.1    26.4    136.8    319.2
Institutes research    18.4    41.5    69.2    129.4
Bioscience cluster    9.3    13.6    51.8    207.4
Total    212.2    441.7    908.9    1600
2009    2017    2023    2030

Employment Forecast    2009    2017    2023    2030
WWAMI Med    38    198    796    1595
WSU Pharm    192    291    387    479
EWU Health Sci    61    90    137    167
WSU Nursing    236    295    356    413
Riverpoint Other    36    58    115    187
WWAMI Grads    19    133    231    333
Industry growth    322    958    1758    2630
Research comm.    26    138    684    1596
Institutes research    26    138    684    1596
Bioscience cluster    65    91    360    1440
Total    1103    2374    5004    9276

Spokane Med. School Employment Impact on Washington State
2009    2017    2023    2030
WWAMI Med    47    247    995    1994
WSU Pharm    240    364    484    599
EWU Health Sci    76    113    171    209
WSU Nursing    295    369    445    517
Riverpoint Other    45    72    144    234
WWAMI Grads    30    208    361    520
Industry growth    502    1496    2748    4109
Research comm.    33    172    855    1995
Institutes research    152    258    576    1073
Bioscience cluster    114    233    540    2160
Total    1535    3532    7319    13410