Health Policy Brief: May 2017

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

Key Findings

  • In 2016, the University of Nevada, Reno School of Medicine (UNR Med) employed 2,142 Nevadans with a combined $127.1 million in payroll and benefits
  • Spending by UNR Med employees generated an additional 1,345 jobs and $58.8 million in payroll and benefits in Nevada
  • UNR Med expenditures of $72.3 million on education, research and clinical operations generated an additional $60.1 million in economic activity in the state
  • The total economic contribution of the School of Medicine to the Nevada economy was $318.3 million
  • Every dollar spent by UNR Med in 2016 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 economic impact of the statewide operations of the University of Nevada, Reno School of Medicine (UNR Med) for the fiscal year ending June 30, 2016.

UNR Med provides undergraduate and graduate medical education, and undertakes a wide range of biomedical research. UNR Med 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 (UNR Med) and subtotals for the school's operations in northern and southern Nevada for the fiscal year ending June 30, 2016 (FY 16). In 2016, the School of Medicine employed 2,142 individuals and spent $127.1 million on employee payroll and benefits. UNR Med employees include academic and administrative faculty, medical residents, classified staff, and research assistants, as well as clinical and nonclinical staff employed by the UNR Med practice plans. An additional $72.3 million was spent by UNR Med on goods and services from other Nevada businesses, including utilities, supplies, and contracts.

Table 1: School of Medicine Employment, Payroll, and Operating Expenditures – 2016
University of Nevada, Reno
School of Medicine
EmploymentPayroll and BenefitsExpenditures
Number of JobsPercentNumber ($)PercentNumber ($)Percent
SOM North 1,188 55.5 58,530,990 46.1 37,369,254 51.7
SOM South 954 44.5 68,521,156 53.9 34,975,137 48.3
Total 2,142 100.0 127,052,146 100.0 72,344,390 100.0

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 and care provided by UNR Med clinicians. In 2016, 1,188 individuals were employed by UNR Med in northern Nevada (55.5% of all UNR Med employees) and 954 individuals were employed in southern Nevada (44.5%). Table 2 provides information on UNR Med employment by region and type of employment activity. In 2016, the School of Medicine employed 1,527 individuals in education and research and 615 in its practice plans.

Table 2: School of Medicine Employment – 2016
University of Nevada, Reno
School of Medicine
Education and ResearchPractice PlansTotal
Number of JobsPercentNumber of JobsPercentNumber of JobsPercent
SOM North 999 65.4 189 30.7 1,188 55.5
SOM South 528 34.6 426 69.3 954 44.5
Total 1,527 100.0 615 100.0 2,142 100.0

Two-thirds of the 1,527 UNR Med employees in education and research worked in northern Nevada (65.4%). In contrast, an even greater majority of the School's 615 practice plan employees worked in southern Nevada (69.3%).

Table 3 contains information on UNR Med spending on payroll and benefits by region and type of employment activity. In 2016, UNR Med employees earned $127.1 million in payroll and benefits - of that total, employees in southern Nevada accounted for $68.5 million in earnings and those employees in northern Nevada accounted for $58.5 million in payroll and benefits.

Table 3: School of Medicine Spending on Payroll and Benefits – 2016
University of Nevada, Reno
School of Medicine
Education and ResearchPractice PlansTotal
Number ($)PercentNumber ($)PercentNumber ($)Percent
SOM North 52,498,793 50.8 6,032,196 25.5 58,530,990 46.1
SOM South 50,897,072 49.2 17,624,084 74.5 68,521,156 53.9
Total 103,395,866 100.0 23,656,280 100.0 127,052,146 100.0

Table 4 provides information on UNR Med operating expenditures by region and type of employment activity. In 2016, UNR Med spent $72.3 million on operating expenditures: $44.5 million on operating expenses associated with medical education and research and $27.8 million on operating expenditures associated with its practice plans.

Table 4: School of Medicine Spending on Operating Expenditures – 2016
University of Nevada, Reno
School of Medicine
Education and ResearchPractice PlansTotal
Number ($)PercentNumber ($)PercentNumber ($)Percent
SOM North 32,397,811 72.8 4,971,443 17.9 37,369,854 51.7
SOM South 12,109,537 27.2 22,865,600 82.1 34,975,137 48.3
Total 44,507,347 100.0 27,837,043 100.0 72,344,390 100.0

Table 5 summarizes total UNR Med spending on payroll, benefits, and operating expenditures detailed in the previous two tables. In 2016, UNR Med spent $147.9 million on education and research with a majority of that spending taking place in northern Nevada (57.4%). During the same year UNR Med spent $51.4 million in its practice plans, with the vast majority of that spending taking place in southern Nevada (78.6%). Statewide, UNR Med spent a grand total of $199.4 million on payroll, benefits, and operating activities in 2016.

Table 5: School of Medicine Total Spending – 2016
University of Nevada, Reno
School of Medicine
Education and ResearchPractice PlansTotal
Number ($)PercentNumber ($)PercentNumber ($)Percent
SOM North 84,896,604 57.4 11,003,640 21.4 95,900,244 48.1
SOM South 63,006,609 42.6 40,489,683 78.6 103,496,292 51.9
Total 147,903,2138 100.0 51,493,323 100.0 199,396,536 100.0

Tables 6 through 8 provide estimates of the economic contribution of the University of Nevada, Reno School 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, Washoe 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 2016, UNR Med education, research, and practice plans in northern Nevada generated an estimated $58.5 million in payroll and benefits and employed 1,188 northern Nevadans. When the jobs created by other businesses in northern Nevada, as a result of UNR Med operations, are included in the analysis, UNR Med was responsible for an additional 720 jobs and an estimated total employment impact of 1,908 jobs. Likewise, when the income created by other businesses as a result of UNR Med education, research, and clinical operating activities is included in the analysis, UNR Med was responsible for an additional $28.5 million in payroll and benefits in other businesses and an estimated total payroll impact of $87.0 million. Combined, UNR Med spending on payroll and benefits, as well as the School’s operational expenditures on goods and services from other businesses in northern Nevada generated $153.3 million in total economic activity.

Table 6: School of Medicine Contributions to the Northern Nevada Economy – 2016
Contribution TypeDirect EffectIndirect EffectTotal EffectIMPLAN Multiplier
School of Medicine North – Education and Research Impacts
Employment 999 598 1,597 1.598925
Payroll & Benefits ($) 52,498,793 25,905,582 78,404,375 1.493451
Operating Expenses ($) 32,397,811 26,185,142 58,582,952 1.808238
School of Medicine North Practice Plans
Employment 189 115 304 1.605852
Payroll & Benefits ($) 6,032,196 2,938,778 8,970,974 1.487182
Operating Expenses ($) 4,971,443 3,847,310 8,818,754 1.773882
School of Medicine North Total
Employment 1,188 720 1,908 1.605852
Payroll & Benefits ($) 58,530,990 28,515,245 87,046,234 1.487182
Operating Expenses ($) 37,369,254 28,919,393 66,288,647 1.773882
Total Economic Contributions in Northern Nevada: $153,334,881

Table 7 provides estimates of the economic contribution of the University of Nevada, Reno School of Medicine to the southern Nevada economy. In 2016, UNR Med education, research, and practice plans in southern Nevada generated an estimated $68.5 million in payroll and benefits and employed 954 southern Nevadans. When the jobs created by other businesses in southern Nevada, as a result of UNR Med operations, are included in the analysis, UNR Med was responsible for an additional 633 jobs and an estimated total employment impact of 1,587 jobs. Likewise, when the income created by other businesses in southern Nevada as a result of UNR Med education, research, and clinical operating activities is included in the analysis, UNR Med was responsible for an additional $32.9 million in payroll and benefits in other businesses and an estimated total payroll impact of $101.4 million. Combined, UNR Med spending on payroll and benefits, as well as the School's operational expenditures on goods and services from other businesses in southern Nevada generated $166.1 million in total economic activity.

Table 7: School of Medicine Contributions to the Southern Nevada Economy – 2016
Contribution TypeDirect EffectIndirect EffectTotal EffectIMPLAN Multiplier
School of Medicine South – Education and Research Impacts
Employment 528 341 869 1.645013
Payroll & Benefits ($) 50,897,072 23,515,822 74,412,894 1.462027
Operating Expenses ($) 12,109,537 10,237,306 22,346,842 1.845392
School of Medicine South Practice Plans
Employment 426 283 709 1.663768
Payroll & Benefits ($) 17,624,084 8,455,436 26,079,520 1.479766
Operating Expenses ($) 22,865,600 19,426,476 42,292,076 1.849594
School of Medicine South Total
Employment 954 633 1,587 1.663768
Payroll & Benefits ($) 68,521,156 32,874,121 101,395,277 1.479766
Operating Expenses ($) 34,975,137 29,714,666 64,689,803 1.849594
Total Economic Contributions in Southern Nevada: $159,345,816

Table 8 provides estimates of the economic contribution of the School of Medicine to the entire State of Nevada. In 2016, UNR Med education, research, and practice plans in Nevada statewide totals were an estimated $127.1 million in payroll and benefits and employed 2,142 Nevadans. When the jobs created by other businesses in Nevada as a result of UNR Med educational, research, and clinical operating activities are included in the analysis, UNR Med was responsible for an additional 1,345 jobs for an estimated total employment impact of 3,487 jobs in Nevada. Likewise, when the income created by other businesses in Nevada as a result of UNR Med operations is included in the analysis, UNR Med was responsible for an additional $58.8 million in payroll and benefits in other businesses generating an estimated payroll impact of $185.8 million in 2016. Combined, UNR Med 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 $318.3 million in total economic activity in Nevada in 2016.

Table 8: School of Medicine Contributions to the Nevada Economy – 2016
Contribution TypeDirect EffectIndirect EffectTotal EffectIMPLAN Multiplier
School of Medicine North and South – Education and Research Impacts
Employment 1,527 959 2,486 1.627941
Labor Income ($) 103,395,866 47,820,071 151,215,936 1.462495
Operating Expenses ($) 44,507,347 36,980,888 81,488,235 1.830894
School of Medicine North and South Practice Plans
Employment 615 386 1,001 1.627941
Labor Income ($) 23,656,280 10,940,911 34,597,191 1.462495
Operating Expenses ($) 27,837,043 23,129,632 50,966,675 1.830894
School of Medicine Statewide Total
Employment 2,142 1,345 3,487 1.627941
Labor Income ($) 127,052,146 58,760,982 185,813,128 1.462495
Operating Expenses ($) 72,344,390 60,110,520 132,454,910 1.830894
Grand Total Statewide Economic Contributions in Nevada: $318,268,038

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 2016, for every dollar spent by UNR Med on payroll, benefits, and operations in southern Nevada, another 61 cents in economic activity was generated in southern Nevada. Similarly, for every dollar spent by UNR Med on payroll, benefits, and operations in northern Nevada, another 60 cents in economic activity was generated in northern Nevada. In 2016, University of Nevada, Reno School of Medicine spending on employee salaries and business operations resulted in a total impact of $318.3 million in economic activity in Nevada. In other words, for every dollar spent by UNR Med on payroll, benefits, and operations statewide, another 60 cents 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 and public medical education to the state's economy.