Critical to Communities: Pennsylvania Hospitals' Economic Impact

Fiscal Year 2021

Pennsylvania hospitals are vital to their communities.

In addition to providing around-the-clock care for all people, regardless of ability to pay, hospitals support their communities by:

  • Employing staff, building infrastructure, and purchasing equipment and supplies
  • Supporting other industries such as facilities, grounds, and fleet maintenance
  • Inducing additional economic activity in sectors such as real estate, financial services, and hospitality
  • Educating and training the next generation of clinicians to care for Pennsylvanians
  • Attracting billions in federal research funding for health care innovation
  • Providing charity care to Pennsylvanians when they need it most
  • Addressing community health needs and, absent a public hospital system, providing critical public health infrastructure to address emergencies such as the COVID-19 pandemic

During fiscal year 2021, Pennsylvania hospitals continued to support their communities, despite the strain of the pandemic, ballooning expenses, and other pressures that threaten their long-term financial sustainability. Ensuring the viability of Pennsylvania hospitals is critical to the health and economies of the commonwealth and its communities.

$168 billion economic impact
Female hospital pharmacy worker selecting medicine

590,000 jobs supported
Male nurse with older male patient discussing medication

$38 billion wages, salaries, benefits
Female worker in hospital kitchen preparing patient meals

Pennsylvania hospitals create family-sustaining jobs.

  • Hospitals support 1 in 10 jobs statewide
  • Hospital jobs support families
  • Pennsylvania hospital jobs pay above average
  • $69,000 average hospital annual wage
  • $65,000 average Pennsylvania annual wage
  • Pennsylvania’s hospitals are top employers

Pennsylvania hospitals support innovation and health.

  • Pennsylvania hospitals and hospital-affiliated medical schools attract federal research funds to advance health care innovation 
  • During fiscal year 2021, 4,377 projects resulted in research funding of $1,769,377,000

Hospitals support healthy communities.

  • 401 nursing schools and nine medical schools affiliated with Pennsylvania hospitals and health systems to train tomorrow’s health care professionals
  • $866 million in uncompensated care (including charity care and uncollected debt)

Hospitals have a growing role in Pennsylvania.

Growth of health care jobs:  Occupations related to health care also are growing steadily in Pennsylvania.

  • A report by Penn State’s Center for Economic and Community Development found an 18.3 percent increase in health care and social assistance sector jobs from 2008– 2019, topping the list of the 11 growing industries across the commonwealth during that timeframe.
  • The Pennsylvania Department of Labor & Industry also projects the health care and social assistance industry will continue to be the biggest industry in Pennsylvania until 2030 and that many health care occupations will be among the top occupations with more than 30 percent growth. 

An aging population:  Demand for clinicians is rising as baby boomers age and live longer. 

  • According to U.S. Census 2021 estimates, Pennsylvania’s population age 65 and older and Pennsylvanians living with disabilities exceed the national average. These numbers are expected to grow. 
  • Projections by the Center for Rural Pennsylvania estimate that, from 2010–2040, Pennsylvania’s 65-and-older population will increase 66.4 percent. Demand for health care for the elderly—often the most frequent users of hospital services—is anticipated to continue its upward trajectory.

Pennsylvania hospitals face challenges.

Hospital challenges
Hospital challenges

As they continue to provide vital health care services and serve as economic engines, Pennsylvania hospitals face significant challenges that threaten their long-term sustainability. These include:

  • Financial challenges:  Soaring expenses are outpacing payments for care. Even with pandemic support, 30 percent of Pennsylvania’s acute care hospitals are operating at a loss, and six hospitals have closed during the last three years.
  • The strain of COVID-19:  Hospitals and health systems statewide reported COVID-19-related expenses and revenue losses totaling nearly $7.2 billion.
  • Workforce shortages:  The entire health care sector faces a historic workforce crisis that has led to surging staffing costs and severe challenges maintaining the clinical and support staff needed to care for patients. A December 2021 HAP survey of Pennsylvania hospitals found average statewide vacancy rates of 45 percent for nursing support staff, 32 percent for clinical nurse specialists, and 27 percent for direct-care registered nurses.
  • Behavioral health:  The pandemic has exacerbated a behavioral health care crisis throughout Pennsylvania and the nation, putting significant operational and financial strain on hospital emergency departments.

Continued federal and state support is imperative to ensure that hospitals can continue to be the economic and health care flagships of their communities. As hospitals recover from the pandemic and rebuild Pennsylvania’s health care infrastructure, they need:

  • Sufficient payment from Medicare, Medicaid, and private insurance
  • Policies that grow the health care workforce by helping hospitals retain valued staff and expand Pennsylvania’s ability to recruit, educate, and train the next generation of health care professionals
  • Flexibility that extends the reach of health care providers by reducing red tape and allowing greater focus on patient care
  • Support to increase behavioral health services throughout all care settings
  • Appropriate payment for telehealth
  • Payment for behavioral health services that better reflects the cost of care and enables behavioral health care organizations to recruit and retain needed staff and providers
  • Sustained state budget support for OB/NICU, burn and trauma centers, and critical access hospitals

Hospitals play a critical role in the health and economies of Pennsylvania communities. Their future is important to all Pennsylvanians.

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HAP Contacts

For more information or with questions, please contact HAP's Research Department. Media inquiries should be directed to Liam Migdail, director, media relations.