Hospitals: Modeling Private Hospital Impacts with Industry Impact Analysis

Michael Nealy

January 04, 2022 17:11

INTRODUCTION

If you are trying to model a private hospital, it is possible that you may have detailed data that you want to include in your Economic Impact report. With the Industry Impact Analysis (detailed) you can do just that.

With the Industry Impact Analysis (detailed) event you can enter values for one or more of the following:

Wage & Salary Employment
Employee Compensation
Spending on Intermediate Inputs (and also edit the Spending Pattern)
Output
Proprietor Employment
Proprietor Income
Taxes on Production & Imports
Other Property Income

Once you enter information into one or more of these inputs, IMPLAN will do the work of calculating the Economic Impacts for you! Unlike other event types, if one or more inputs are used, IMPLAN will balance the Industry Leontief Production Function to match these inputs.

EXAMPLE

SETTING UP THE ANALYSIS

Let’s say a new private hospital is going to open in Mecklenburg County in 2026. We are told that this hospital will:

Generate $5M in Output for their first year of operations,
Spend $1.5M is in Labor Income,
Spend $2.5M is in Intermediate Input (II) purchases.

With all of the detailed information we have, running an Industry Impact Analysis (IIA) detailed is the perfect approach!

To set this up, there are a view steps:

Remember Labor Income = Employee Compensation (EC) + Proprietor Income (PI). In our IIA we input this value simply by leaving Employee Compensation and Proprietor Income blank, and specifying Total Labor Income with our known value.
Enter the $2.5M in II purchases in the Intermediate Inputs box. However, if we were not provided this information, we could leave the box blank to allow IMPLAN to estimate the value.
Add $5M as our Total Output value

Notice that we leave all other boxes blank, IMPLAN will compute all other values.

EDITING THE SPENDING PATTERN

If we are given any further information on the proposed spending by Commodity, we can click the Edit Spending Pattern button and edit the percentages of the Industry Spending Pattern. We may know, for example, that they will not be purchasing anything from a retail store; instead using only wholesalers. We can zero out all Retail Services (Commodities 3385-3395) entering zero in the place of the current percentages. Then, choose Normalize in the Advanced Menu so that the Sum of Percentages is again 100% and save to close out the pop-up.

To run our analysis, we drag the Events into the Mecklenburg County Group and hit Run. Note that this example was completed using the 2024 Data set in 2026 Dollars.

RESULTS

Navigating to our Results Screen, you will be taken to the Summary In Depth Overview page.

Notice that we have Direct, Indirect, and Induced effects based on the values that we specified in our IIA Event!