Hospitals: Modeling Private Hospital Impacts with Industry Impact Analysis


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 new Event Type in IMPLAN called Industry Impact Analysis (detailed) released in Version 6, you can do just that. In this Event Type, you can enter values for Wage & Salary Employment, Employee Compensation, and spending on Intermediate Inputs (and also edit the Spending Pattern) or Output. You can also enter values for Proprietor Employment, Proprietor Income, Taxes on Production & Imports, and Other Property Income to reflect the data that you have, but note that you can just as easily leave these values blank if they are unknown. And that's it. IMPLAN will calculate the Direct Effect for you.


Let’s say a new private hospital is going to open in Mecklenburg County in 2021.  We are told that this hospital will generate $5M in Output for their first year of operations, of which $1.5M is in Labor Income, and $2.5M is in Intermediate Input (II) purchases.  With all of the detailed information we have, running an Industry Impact Analysis (IIA) would be the perfect approach!


Remember that Labor Income = Employee Compensation (EC) + Proprietor Income (PI), and we know that Labor Income = $1.5 Million. In IIA we could input this value simply by leaving Employee Compensation and Proprietor Income blank, and specifying Total Labor Income with our known value.


Next, we’ll 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. 

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 3403-3413) 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.


Now, all we have to do is add $5M as our Total Output value, leaving the boxes for Other Property Income and Taxes on Production & Imports blank because those are unknown to us. After doing so our IIA event should be looking like this.


Now drag the Events into the Mecklenburg County Group and hit Run. Note that this example was completed using the 2019 Data set in 2021 Dollars.  Navigating to our Results screen, you’ll notice that we have Direct, Indirect, and Induced effects based on the values that we specified in our Event!



Introducing Industry Impact Analysis (Detailed)

Hospitals: Considerations when Conducting Hospital Economic Impacts


Written January 4, 2022

Updated October 12, 2023