Economic Impacts of Northeastern Nevada Regional Hospital on the Economy of Elko County - December 2017
On December 5, 2017, the Director of the University Center for Economic development, Tom Harris, made a presentation of the results of a study that estimated the economic impact of Northeastern Nevada Regional Hospital on the economy of Elko County. Some of the major points of the presentation and study are listed below:
• For residents of Elko County, NNRH provides access to vital health care services 24 hours a day, seven days a week, and 365 days a year.
• NNRH plays a critical role in the economic vitality of Elko County by creating jobs and income for Elko County residents through normal hospital operations, physician recruitment and retention, new service development and hospital construction activities.
• NNRH plays a key role for future Elko County economic development efforts. Industries seeking to locate or relocate into an area rate the quality of local labor force and health care as two top factors for location or relocation. As for recruitment of the retired population, this population cohort rate public safety and quality of local health care as the top two factors for location.
• Through its workforce, NNRH significantly impacts the quality of life and community sustainability.
• Expenditures by NNRH and its employees impact the economic activity of Elko County through the multiplier effect.
• To derive total NNRH output, employment, and labor income impacts, the Minnesota IMPLAN Group, Inc. microcomputer input-output model was employed.
• NNRH spent $33.5 million locally on operations in FY 2015. When the expenditures by other businesses because of NNRH are included in the analysis, NNRH generated a total of $48.6 million in spending in the Elko County economy.
• NNRH employed 358 individuals living in Elko County in FY 2015. When the employment created by other businesses because of NNRH is included in the analysis, NNRH total activities generated and supported a total of 519 jobs in the Elko County economy.
• NNRH generated $23.6 million in labor income in FY 2015. When the income created by other businesses because of NNRH is included in the analysis, the NNRH was responsible for $30.6 million in labor income for the Elko County economy.
• NNRH hosts two University of Nevada Medical School Internal Medicine residents a year. These students live in Elko County and their living expenditures are made in Elko County. Using the IMPLAN microcomputer input-output model, the total employment, labor income, and total output impacts of these two residents are estimated to be 0.54 employees, $14,586 labor income, and $66,913 total output impacts respectively.
•One of the most important roles of the local health care sector, which the Hospital Sector is part, is "keeping local health care dollars at home." If Elko County residents to have medical procedures performed outside the county, this represents a loss to the economy of Elko County as well as expenditures of family members who travel with these patients.
• For this paper, the employment, labor income, and output impact losses of medical procedures such as appendectomy, knee replacement, and heart stent performed outside Elko County are estimated. In addition, the economic impacts of family members accompanying these patients to Salt Lake City are estimated.
• From data provided by NNRH, average commercial insurance reimbursement are $30,700 for an appendectomy, $50,000 for a knee replacement, and $60,000 for a heart stent.
• For the family member accompanying the patient to Salt Lake City, U.S. General Services Administration domestic hotel and per diem rates for Salt Lake City are used. Transportation costs were derived from State of Nevada per mileage reimbursement. In addition, for an appendectomy and knee replacement procedures the family member stays in Salt Lake City for two days while for a heart stent the length of stay expands to four days.
• The total employment impacts of an appendectomy, knee replacement, and heart stent are 0.3357, 0.5357, and 0.6514 employees, respectively. • Total labor income impacts of an appendectomy, knee replacement, and heart stent are $19,602, $31,806, and $338,301, respectively.
• The total economic impacts to the Elko County economy from an appendectomy, knee replacement, and heart stent procedures outside Elko County are $45,020, $72,995, and $87,989, respectively.
• Lastly, NNRH performed 56 appendectomies, 97 knee arthroscopies, and 135 heart stents in 2015. If all of these procedures occurred outside Elko County, the total employment loss to Elko County from lost appendectomies, knee replacements and heart stent procedures would have been 18.8, 52.0, and 87.9 employees, respectively. Total labor income from appendectomies, knee replacements, and heart stents performed outside of Elko County would have been approximately $1.1 million, $3.1 million, and $5.2 million respectively. As for total economic output impacts in 2015 from lost appendectomies, knee replacements, and heart stents performed outside Elko County would be approximately $2.5 million, $7.1 million and $11.9 million, respectively.
• In addition to its quantitative impacts on the Elko County economy, the presence of a hospital improves the region's attractiveness. Businesses consider hospital proximity in their location decision, as do residents, especially retirees and those in childbearing years.
• These impacts demonstrate that NNRH is a critical player for current and future economic development in Elko County.
• Economic development agencies, business groups, and local leaders should be aware of the importance of NNRH as a key partner and primary sector for current and future economic development opportunities in Elko County. You can get a copy of the University Center Technical Report from the University Center for Economic Development Website.
To see full technical report click HERE
Nevada Land Ownership - February 2016
View Map of the Month here.
On September 28, I made a presentation at the annual conference of the Nevada Association of Counties (NACO) in Las Vegas, Nevada. This presentation was part of a session that discussed public land issues. This blog discusses my presentation and a voice-over-power point of my presentation is part of the Map of the Quarter which covers public lands in Nevada.
One of the unique characteristics of the Western United States is the degree of public land ownership or administration. For the eleven contiguous Western States approximately 47% of the land base is federally controlled. For Nevada, approximately 87.6% of its land acreage is under federal ownership. However for many of Nevada's counties such as Esmeralda, Lander, Lincoln, and White Pine counties over 90% of their land base is administered by the federal government (Zimmerman and Harris, 2000).
For the NACO presentation several points were made in the presentation that are enumerated below:
- A unique land base in Nevada is the checkerboard lands. Some 4.2 million acres in the Central Pacific Railroad corridor along Interstate Highway 80 is designated as checkerboard because of its blend of BLM and private ownership parcels. This intermix of public and private lands makes for difficult economic development because not one large piece of contiguous private land is available for large economic development projects.
- The state of Nevada has 110,567 square miles of land. In a referenced study by Dickens (Dickens, 1982), this makes Nevada the 7th largest state in land area. However if the public lands were subtracted from the total Nevada land acreage, Nevada would be the 10th smallest state in the union.
- Also in 2015, Nevada received $23.3 million in Payment in Lieu of Taxes (PILT) while New Mexico received $34.5 million and California received $42.2 million. Nevada had 56.8 million acres in federal land whole New Mexico had 22.8 million and California had 40.0 million. Because New Mexico has 33 counties compared to Nevada's 17, the PILT payment calculation favors the state of New Mexico.
- Bureau of Land Management (BLM) is the largest public land manager in the state. In 2012, BLM managed approximately 47.8 million acres or 67.5% of Nevada's land base (Nevada Land Management Task Force, 2014). However one must be cognizant that the operational expenditures and payrolls of BLM for the state and many of its counties is an important economic base for current and future economic development.
- For Fiscal Year 2013, BLM had direct employment of 4,691 jobs with an output of $542.0 million in the State of Nevada (Bureau of Land Management, 2015). Employing economic multipliers, the overall impact to Nevada's economy from BLM operations were $1.0 billion in economic activity and employment impacts of 7,664 jobs (Bureau of Land Management, 2015). The operational expenditures of BLM and the expenditures of BLM payrolls by its employees impact many Nevada county economies currently and into the future.
- In the voice-over-power point, several economic impact studies are covered which discuss how amenity values impact local economic activity and development. Past studies of the knowledge-based worker shows that they prefer to live high amenity areas in which public lands of the West are part. An argument suggests that recent advances in communication, decoupling of knowledge based versus manufacturing centers now allow people to do their work in remote rural locations. The development of internet capabilities has reduces the vast distances in the West were once thought a hindrance but may not be so with communication developments. Also rapid growth in passive income (Dividends, Interest, and rents and Transfer Payments) has brought public lands as amenities for future economic development.
- Other authors found public land amenities may be important but they are not sufficient to stimulate a sustaining economic growth. Studies have shown that on one hand the beauty of the landscape and the other the access to regional metropolitan centers continues to be an asset. Commuting range, population densities and access to airports are still important factors for economic development.
Given the dominance of public lands and public land management in the Western United States, its importance along with surface and groundwater management will continue to be important natural resource issues for the West and nation for some time.
- S. Department of Interior. "Socioeconomic Impacts in Nevada". Bureau of Land Management: Washington D. C., 2015.
Dickens, R. "Statehood, Sovereignty, and Sagebrush Rebellion", State Sovereignty As Impaired by Federal Ownership of Land, Legislative Council Bureau, State of Nevada, Carson City, Nevada, Bulletin No. 82-1, January 1982.Nevada Land management Task Force. "A Report of the Nevada Land Management Task Force to Nevada Interim Legislative Committee on Public Lands: Congressional Transfer of Public lands to the State of Nevada". Carson City, Nevada, July 18, 2014. Zimmerman, J. and T.R. Harris. "An Update of Federal and State Land-Based Payments in Nevada", University of Nevada, Reno, University Center for Economic Development, UCED 2000/01-06, September 2000.
Economic Edge - February 2016
With the location of Tesla/Panasonic in the Reno Area and Faraday in the Las Vegas Area, the interest in technical education or technically qualified local workforce has increased. In addition, one of Governor Sandoval's targeted economic sectors is Advanced Manufacturing. Given the interest in technical workforce how one can analyzes the state's workforce for addressing the needs of these technical sectors.
A study by Jaison Abel, Todd Gabe, and Kevin Stolarich will be a paper reviewed in this quarter's Economic Edge. The paper is published in journal Growth and Change. This paper investigates job skills across urban and rural hierarchy. This paper provides a procedure that could be applied in Nevada to judge the state and area work skills.
Often we read about the skill level of a local labor force by education levels. This is called vertical analysis of labor force skills. This type of analysis would leave one with estimates of percentage of total labor force with a high school education, college education, graduate education, etc. Horizontal analysis would be an occupational analysis to derive the skill levels of the local labor force. This type of analysis employees the U.S. Department of Labor's Occupational Information Network or what is often called the O*NET database. The O*NET data base is quite extensive and yields information as to workforce skills of different occupations which is meaningful given technical industries may require specialized skills that a vertical analysis does not yield.
The results of the analysis looked at different groupings of urban and rural counties. They found occupation clusters most prevalent in urban areas are scientist, engineers, and executives while rural areas are skewed to machinists, makers, and laborers. Given that the urban occupations require skills that employ resource and social skills as well as complex modeling skills these professions in urban areas are also ones that yield higher wages.
As for Nevada, the use of horizontal analysis of the labor force would provide leaders with information as to specific occupations needed for advanced manufacturing industries. Also the horizontal analysis would provide information as to educational programs needed to increase state labor skills to more effectively capture the employment opportunities of advanced manufacturing.
The papers used for this blog were:
1. Jaison Abel, Todd Gabe, and Kevin Stolarick. Workforce Skills Across the Urban-Rural Hierarchy. Federal Reserve Bank of New York Staff Reports, Staff Report No. 522, February 2012
2. Jaison, Abel, Todd Gabe, and Kevin Stolarich. "Skills Across the Urban-Rural Hierarchy", Growth and Change, Vol. 45, No. 4, 2014.
Leadership - November 2015
October and November were busy months for the Nevada Leadership Program. After co-hosting the 2015 Nevada Chapter of the American Planning Association's Annual Conference in September (held at the Joe Crowley Student Union) with the NVAPA, the Nevada Leadership Program held two community workshops, one in Kingston, Nevada and one in Austin, Nevada, on October 23, 2015 and October 24, 2015. Community members in Austin and Kingston were invited to participate in an overview of a branding study the University Center for Economic Development is currently working on for the Lander Economic Development Authority in partnership with University of Nevada Cooperative Extension. On Monday, November 2, 2015, the Nevada Leadership Program conducted a day-long Conservation District Leadership Development Workshop in Ely, Nevada. Approximately 15 attendees participated in the workshop that helped kick-off the 2015 Annual Meeting of the Nevada Association of Conservation Districts. On November 7, 2015, a strategic planning community workshop was held in Fernley, Nevada as the University Center for Economic Development and the Bureau of Business and Economic Research work with the City of Fernley to complete a new strategic and communications plan for the City.
You can also get more information from Nevada Leadership Program and get regular updates regarding Nevada Leadership Program activities, including pictures of past events, on the Nevada Leadership Facebook page.
Agriculture - December 2015
Most major grains and oilseeds prices in the U.S. are not at the unsustainable high levels of the past few years, particularly as the demand created by the federal Renewable Fuels Standard (RFS) has mostly been met. The extended upward boosts from biofuels demand have abated, as have recent supply disruptions around the world have abated. The November release of the USDA's Agricultural Prices report indicates prices that are settling to levels that reflect expected long-term averages. While corn prices reached that level last year, soybeans, wheat, and sorghum are among the major crops with still declining prices although those are nearing expected bottoms, as well. Corn prices are actually up a modest 3% from one year ago, while wheat prices have fallen 13% over the same span, reflecting improved global supply conditions. Soybeans have also continued a downward slide, losing 12% over the past year. Overall national hay prices are off 16%. The monthly Nevada Hay Prices report indicates that in Nevada, alfalfa prices have fallen 30% from one year ago, while other hay is off more than 15%. Most of those declines have occurred since the first hay cuttings of 2015.The implications for the lower crop prices are lower food prices, and significantly lower livestock feeding costs, giving livestock and products producers a break. In Nevada, dairy rations and winter feeding for beef cattle, particularly in the northern part of the state will cost less.
That break is needed as most livestock producers are seeing steep declines in prices they receive for animals and products. Nationally, beef cattle prices have dropped $33 per cwt from a year, a decline of 20%. Furthermore, the slide in cattle prices is not over, with further losses expected in coming months. The Fallon Livestock Exchange offers timely actual sales price data for the Northwestern and Central Nevada region. The exchange's market report for the end of June indicated a range of 500-600 pound steer prices of $271-$290. The report for early December shows that comparable prices dropped to a range of $169-$197. Using the midpoint price of both ranges suggests a price decline of more than one-third in less than six months.
While milk prices ticked up slightly in October from the previous month, compared to October 2014, national average prices are $7.20 per cwt, or almost 30% lower. According to the Nevada Dairy Commission, Class I milk prices declined $6.50 per cwt, or 27% for Northern Nevada. In Southern Nevada, the drop in Class I prices was even greater, $7.60 per cwt, similar to the 30% national decline. In the past two years, Class IIIa prices have become much more important in Northern Nevada, with the Dairy Farmers of America whole milk powder plant operating in Fallon. The decline in Class IIIa milk prices in recent months has been much less precipitous than for other grades, implying that the milk plant is offering some support to local milk producers. In November those prices were $1.47 per cwt lower than one year ago, for a decline of 8%. However, those prices were much lower earlier in 2015, as demand for whole milk powder imports by China fell sharply. Overall, the declines in beef cattle and milk prices in the past few months have outpaced the decline in feed costs. As a result, profitability for Nevada beef cattle and dairy producers dropped.