Health Policy Brief: March 2016

The Contribution of the University of Nevada, Reno School of Medicine to the Nevada Economy

Key Findings

  • In 2015, the University of Nevada, Reno School of Medicine employed 2,126 Nevadans with a combined $118.6 million in payroll and benefits
  • Spending by School of Medicine employees generated an additional 1,363 jobs and $55.9 million in payroll and benefits in Nevada
  • School of Medicine expenditures of $64.9 million on education, research and clinical operations generated an additional $53.4 million in economic activity in the state
  • The total economic contribution of the School of Medicine to the Nevada economy was $292.8 million
  • Every dollar spent by the School of Medicine in 2015 produced an additional $0.596 in economic activity in Nevada that year

Overview

This report, The Contribution of the University of Nevada, Reno School of Medicine to the Nevada Economy, provides the most current estimate of the statewide and regional economic impacts of the University of Nevada, Reno School of Medicine.

The School of Medicine provides undergraduate and graduate medical education, and undertakes a wide range of biomedical research. School of Medicine practice plans offer care to Nevadans in more than 40 medical specialties. The School's physician practice is the largest in Nevada with doctors and surgeons practicing and teaching medicine in Las Vegas, Reno, and rural areas of the state.

The analysis contained in this report reveals that the jobs, payroll, and expenditures made by the School of Medicine generate substantial benefits to the state's economy—contributions typically overlooked in public policy discussions of the role of medical education and training in Nevada.

Findings

Table 1 summarizes employment, payroll and benefits, and operating expenditures of the University of Nevada, Reno School of Medicine and subtotals for the school's operations in northern and southern Nevada for the fiscal year ending June 30, 3015 (FY 15). In 2015, the School of Medicine employed 2,126 individuals and spent $118.6 million on employee payroll and benefits. School of Medicine employees include academic and administrative faculty, medical residents, classified staff, and research assistants, as well as clinical and nonclinical staff employed by the School of Medicine practice plans. An additional $64.9 million was spent by the school on goods and services from other Nevada businesses, including utilities, supplies, and contracts.

Table 1: School of Medicine Employment, Payroll, and Operating Expenditures – 2015
University of Nevada, Reno
School of Medicine
EmploymentPayroll and BenefitsExpenditures
Number of JobsPercentNumber ($)PercentNumber ($)Percent
SOM North 1,173 55.2 52,199,714 44.0 31,878,602 49.1
SOM South 953 44.8 66,420,410 56.0 33,070,799 50.9
Total 2,126 100.0 118,620,124 100.0 64,890,794 100.0

In this report, data and corresponding estimates are developed for two general areas of the School's operations: (1) education and research and (2) practice plans. In 2015, 1,173 individuals were employed by the School of Medicine in northern Nevada (55.2% of all school employees) and 953 individuals were employed in southern Nevada (44.8%).

Table 2 provides information on School of Medicine employment by region and type of employment activity. In 2015, the School of Medicine employed 1,464 individuals in education and research and 662 in its practice plans.

Table 2: School of Medicine Employment – 2015
University of Nevada, Reno
School of Medicine
Education and ResearchPractice PlansTotal
Number of JobsPercentNumber of JobsPercentNumber of JobsPercent
SOM North 969 66.2 204 30.8 1,173 55.2
SOM South 495 33.8 458 69.2 953 44.8
Total 1,464 100.0 662 100.0 2,126 100.0

Two-thirds of the 1,464 School of Medicine employees in education and research worked in northern Nevada (66.2%). In contrast, an even larger majority of the School's 662 practice plan employees worked in southern Nevada (69.2%).

Table 3 contains information on School of Medicine spending on payroll and benefits by region and type of employment activity. In 2015, School of Medicine employees earned $118.6 million in payroll and benefits—of that total, employees in southern Nevada accounted for $66.4 million in earnings and those employees in northern Nevada accounted for $52.2 million in payroll and benefits.

Table 3: School of Medicine Spending on Payroll and Benefits – 2015
University of Nevada, Reno
School of Medicine
Education and ResearchPractice PlansTotal
Number ($)PercentNumber ($)PercentNumber ($)Percent
SOM North 45,681,454 48.1 6,518,260 27.6 52,199,714 44.0
SOM South 49,323,643 51.9 17,096,767 72.4 66,420,410 56.0
Total 95,005,097 100.0 23,615,027 100.0 118,620,124 100.0

Table 4 provides information on School of Medicine operating expenditures by region and type of employment activity. In 2015, School of Medicine spent $64.9 million on operating expenditures: $36.0 million on operating expenses associated with medical education and research and $28.9 million on operating expenditures associated with its practice plans.

Table 4: School of Medicine Spending on Operating Expenditures – 2015
University of Nevada, Reno
School of Medicine
Education and ResearchPractice PlansTotal
Number ($)PercentNumber ($)PercentNumber ($)Percent
SOM North 26,190,825 72.8 5,687,777 19.7 31,878,602 49.1
SOM South 9,784,985 27.2 23,227,206 80.3 33,012,191 50.9
Total 35,975,811 100.0 28,914,983 100.0 64,890,794 100.0

Table 5 summarizes total School of Medicine spending on payroll, benefits, and operating expenditures detailed in the previous two tables. In 2015, the School of Medicine spent $131.0 million on education and research with a majority of that spending taking place in northern Nevada (54.9%). During the same year the school spent $52.5 million in its practice plans, with the vast majority of that spending taking place in southern Nevada (76.8%). Statewide, the School of Medicine spent a grand total of $183.5 million on payroll, benefits, and operating activities in 2015.

Table 5: School of Medicine Total Spending – 2015
University of Nevada, Reno
School of Medicine
Education and ResearchPractice PlansTotal
Number ($)PercentNumber ($)PercentNumber ($)Percent
SOM North 71,872,279 54.9 12,206,037 23.2 84,078,316 45.8
SOM South 59,108,629 45.1 40,323,973 76.8 99,432,602 54.2
Total 130,980,908 100.0 52,530,010 100.0 183,510,918 100.0

Tables 6 through 8 provide estimates of the economic contribution of the University of Nevada, Reno School of Medicine utilizing data contained in the previous tables and economic impact multipliers developed by the IMPLAN Group, LLC for the three geographic regions in each table: northern Nevada, southern Nevada, and the statewide or entire Nevada economy. An important method of assessing the impact of businesses and industry sectors on local economies is through the estimation of multiplier effects.

Multiplier or "ripple" effects are a simplified and compact way of representing the effects of business and employee expenditures—for example, spending by the University of Nevada, Reno School of Medicine — on state and regional economies, such as northern Nevada and southern Nevada. The multiplier is interpreted as the impact of a one-unit change in sales, employment, or income that results in a corresponding total impact on sales, employment, or income in the larger economy. In essence, the multiplier represents the recycling of dollars and income in a specified geographic unit, such as Clark County or the State of Nevada. This recycling creates new job opportunities and additional wages for residents and business establishments in that geographic unit. An appendix to this report contains additional information on multiplier effects.

Table 6 provides estimates of the economic contribution of the University of Nevada, Reno School of Medicine to the northern Nevada economy. In 2015, School of Medicine education, research, and practice plans in northern Nevada generated an estimated $52.2 million in payroll and benefits and employed 1,173 northern Nevadans. When the jobs created by other businesses in northern Nevada, as a result of School of Medicine operations, are included in the analysis, the School of Medicine was responsible for an additional 711 jobs and an estimated total employment impact of 1,884 jobs. Likewise, when the income created by other businesses as a result of School of Medicine education, research, and clinical operating activities is included in the analysis, the school was responsible for an additional $25.4 million in payroll and benefits in other businesses and an estimated total payroll impact of $77.6 million.

Table 6: School of Medicine Contributions to the Northern Nevada Economy – 2015
Contribution TypeDirect EffectIndirect EffectTotal EffectIMPLAN Multiplier
School of Medicine North – Education and Research Impacts
Employment 969 587 1,556 1.6059
Payroll & Benefits ($) 45,681,454 22,255,182 67,936,636 1.4872
Operating Expenses ($) 26,190,825 20,268,608 46,459,433 1.7739
School of Medicine North Practice Plans
Employment 204 124 328 1.5090
Payroll & Benefits ($) 6,518,260 3,175,579 9,9693,839 4.5205
Operating Expenses ($) 5,687,777 4,401,668 10,089,445 1.7739
School of Medicine North Total
Employment 1,173 711 1,884 1.6059
Payroll & Benefits ($) 52,199,714 25,430,761 77,630,475 1.4872
Operating Expenses ($) 31,878,602 24,670,276 56,548,879 1.7739
Total Economic Contributions in Northern Nevada: $134,179,353

Table 7 provides estimates of the economic contribution of the University of Nevada, Reno School of Medicine to the southern Nevada economy. In 2015, School of Medicine education, research, and practice plans in southern Nevada generated an estimated $66.4 million in payroll and benefits and employed 953 southern Nevadans. When the jobs created by other businesses in southern Nevada, as a result of School of Medicine operations, are included in the analysis, the school was responsible for an additional 633 jobs and an estimated total employment impact of 1,586 jobs. Likewise, when the income created by other businesses in southern Nevada as a result of School of Medicine education, research, and clinical operating activities is included in the analysis, the school was responsible for an additional $31.9 million in payroll and benefits in other businesses and an estimated total payroll impact of $98.3 million. Combined, School of Medicine spending on payroll and benefits, as well as the School's operational expenditures on goods and services from other businesses in southern Nevada generated $159.3 million in total economic activity.

Table 7: School of Medicine Contributions to the Southern Nevada Economy – 2015
Contribution TypeDirect EffectIndirect EffectTotal EffectIMPLAN Multiplier
School of Medicine South – Education and Research Impacts
Employment 495 329 824 1.6638
Payroll & Benefits ($) 49,323,643 23,663,807 72,987,450 1.8496
Operating Expenses ($) 9,784,985 8,313,265 18,098,250 1.8496
School of Medicine South Practice Plans
Employment 458 304 762 1.6638
Payroll & Benefits ($) 17,096,767 8,202,448 25,299,215 1.4798
Operating Expenses ($) 23,227,206 19,733,695 42,960,901 1.8496
School of Medicine South Total
Employment 953 633 1,586 1.6638
Payroll & Benefits ($) 66,420,410 31,866,255 98,286,665 1.4798
Operating Expenses ($) 33,012,191 28,046,960 61,059,151 1.8496
Total Economic Contributions in Southern Nevada: $159,345,816

Table 8 provides estimates of the economic contribution of the University of Nevada, Reno School of Medicine to the entire State of Nevada. In 2015, School of Medicine education, research, and practice plans in Nevada statewide totals were an estimated $118.6 million in payroll and benefits and employed 2,126 Nevadans.

Table 8: School of Medicine Contributions to the Nevada Economy – 2015
Contribution TypeDirect EffectIndirect EffectTotal EffectIMPLAN Multiplier
School of Medicine North and South – Education and Research Impacts
Employment 1,464 938 2,402 1.6409
Payroll & Benefits ($) 95,005,097 44,781,983 139,787,080 1.4714
Operating Expenses ($) 35,975,811 29,594,565 65,570,376 1.8226
School of Medicine North and South Practice Plans
Employment 662 424 1,086 1.6409
Payroll & Benefits ($) 23,615,027 11,131,274 34,746,301 1.4714
Operating Expenses ($) 28,914,983 23,786,159 52,701,142 1.8226
School of Medicine Statewide Total
Employment 2,126 1,363 3,489 1.6409
Payroll & Benefits ($) 118,620,124 55,913,256 174,533,380 1.4714
Operating Expenses ($) 64,890,794 53,380,724 118,271,518 1.8226
Grand Total Statewide Economic Contributions in Nevada: $292,804,898

When the jobs created by other businesses in Nevada as a result of School of Medicine educational, research, and clinical operating activities are included in the analysis, the School of Medicine was responsible for an additional 1,363 jobs for an estimated total employment impact of 3,489 jobs in Nevada. Likewise, when the income created by other businesses in Nevada as a result of School of Medicine operations is included in the analysis, the School of Medicine was responsible for an additional $55.9 million in payroll and benefits in other businesses generating an estimated payroll impact of $174.5 million in 2015. Combined, School of Medicine spending on payroll and benefits, as well as the School's operational expenditures on goods and services from other businesses across Nevada resulted in an estimated $292.8 million in total economic activity in Nevada in 2015.

Discussion

The estimates contained in this brief provide a snapshot of the University of Nevada, Reno School of Medicine's current contributions to the state's economy. However, these estimates do not capture every economic contribution of the School, such as the impact of construction and other major capital improvements undertaken by the School of Medicine. Nor does the report capture the economic value of a healthier population and an economically more productive workforce in Nevada—improvements that are, to no small degree, a result of research undertaken at the School of Medicine as well as the medical care provided by physicians who have received their undergraduate and graduate medical education from the University of Nevada, Reno School of Medicine over the past four decades.

In summary, the University of Nevada, Reno School of Medicine has been responsible for substantial economic contributions in both northern and southern regions of Nevada. In 2015, for every dollar spent by the University of Nevada, Reno School of Medicine on payroll, benefits, and operations in southern Nevada, another $0.603 in economic activity was generated in southern Nevada. Similarly, for every dollar spent by the School of Medicine on payroll, benefits, and operations in northern Nevada, another $0.596 in economic activity was generated in northern Nevada. In 2015, University of Nevada, Reno School of Medicine spending on employee salaries and business operations resulted in a total impact of $292.8 million in economic activity in Nevada. In other words, for every dollar spent by the School of Medicine on payroll, benefits, and operations statewide, another $0.596 in economic activity was generated in other businesses across the state. As policymakers consider the medical education and health care priorities for Nevada, they should bear in mind the importance of the University of Nevada, Reno School of Medicine to the state's economy.