Office-based Physicians Responsible for $1.4 Trillion in Economic Output

AMA, Graham Center Reports Detail Economic Effect of FPs

April 19, 2011 03:05 pm News Staff

In 2009, office-based physicians contributed $1.4 trillion to U.S. economic activity and supported 4 million jobs nationwide, according to a report recently released by the AMA. And AAFP members, who are nearly 90 percent office-based, were top contributors to those numbers.

[Stock photo of $100 bills wrapped in a stethoscope]

Office-based physicians added more to state economies than a number of other industries, including hospitals, nursing homes, home health services and even legal enterprises, says the AMA report The State-Level Economic Impact of Office-Based Physicians( (free registration is required).

The economic impact of office-based physicians varies greatly from state to state and depends on two factors: the number of physicians in the state and the characteristics of the state's economy, says the report.

It uses four variables -- output, jobs, wages/benefits, and tax revenue -- to gauge the economic impact of office-based physicians. Specifically, the report assesses the direct impact of the value of output, jobs, wages/benefits, and taxes produced from patient care activities provided in physician offices, as well as the indirect impact of the same activities generated in industries supported by physicians' offices.

According to the report, in 2009, the office-based physician industry supported

  • $1.4 trillion in total economic output, with each physician supporting an average of $2.2 million in output;
  • 4 million jobs, with each office-based physician supporting 6.2 jobs, including his or her own; and
  • $833 billion in wages and benefits, with each physician supporting $1.3 million in those areas.

In addition, the office-based physician industry generated $63 billion in total state and local tax revenues in 2009, with each individual office-based physician generating an average of nearly $100,000 in state and local tax revenues.

In 2007, the AAFP's Robert Graham Center did a similar study that measured the economic impact of a single family physician and the cumulative effect of FPs in each of the 50 states and the District of Columbia.

The finished work, Economic Impact of Family Physicians, is a series of issues briefs -- one for each state -- that details information on the economic benefits family physicians provide and that includes a state map with federally designated primary care health professional shortage areas.

Andrew Bazemore, M.D., M.P.H., the center's assistant director, told AAFP News Now that both the Graham Center and the AMA used Impact Analysis for Planning, or IMPLAN, data to generate their reports. IMPLAN is an economic analysis system that allows users to create regional models.

According to the Graham Center data, which Bazemore notes are both conservative and nearly 5 years old, California FPs topped the list as economic drivers, with an economic impact of nearly $986,000 per family physician per year. The total annual impact of family physicians in the state was more than $8.2 billion in 2007.

Two other states sit at the other end of the scale. The annual economic impact per family physician in New Mexico was $660,392 in 2007, the lowest amount reported. And the total impact of family physicians per year in Alaska was slightly more than $168.6 million, the lowest state total reported.