Report Shows UTHSC Contributed $4 Billion to Tennessee’s Economy in FY 2017

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The University of Tennessee Health Science Center contributed approximately $4 billion to the Tennessee economy in Fiscal Year 2017, according to a new study designed to gauge the university’s total economic impact on the state.

The 2017 Economic Impact Report was done by Cyril F. Chang, PhD, professor of economics at the Fogelman College of Business and Economics at the University of Memphis. The report, the first for UTHSC since 2011, includes the university’s direct and indirect economic contributions to the economy and confirms that UTHSC’s statewide financial impact continues to grow.

“As a major employer and purchaser of goods and services, UTHSC contributes  substantively to the economic well-being of the communities it serves by creating jobs, stimulating economic activities, and supporting public programs through tax revenues generated directly and indirectly by the economic benefits derived from the presence of UTHSC,” the 2017 report states.

By contrast, the previous report done by the Methodist Le Bonheur Center for Healthcare Economics and the Sparks Bureau of Business and Economic Research at U of M, found UTHSC’s economic contribution to the state amounted to more than $2.3 billion.

For the 2017 report, UTHSC’s approximately $4 billion economic impact was estimated using a model that has been employed by more than 500 universities, government agencies, and nonprofit organizations to estimate the impact of investments and economic activities on their communities. It includes not just the impact or market value of total sales and jobs supported by the main Memphis campus and its campuses in Chattanooga, Knoxville, and Nashville, but the affiliate organizations and community-based social service organizations and foundations that affect the people of Tennessee, the inpatient care revenues earned by local hospitals as a result of the services provided by UTHSC’s clinical faculty, as well as federal, state, and local taxes.

The total direct impact of the four campuses was $2.2 billion. The indirect effect (firms that supply goods and services to UTHSC) was $719.3 million, and the induced effect (increased sales from household spending of income earned as a result of UTHSC) was $1.1 billion.

UTHSC received $146.8 million in state appropriations, or 28.6 percent of the university’s operating budget for FY 2017. “When compared to the total estimated economic impact of $4 billion, the economic contributions of Tennessee’s flagship public medical school to the state economy exceeded state appropriations for university operation by a factor of 27 to 1,” the report said.

In 2017, UTHSC and its affiliated organizations supported 32,333 jobs in Tennessee. The main Memphis campus, generated approximately $3 billion or 74 percent of the total economic impact of the university, Knoxville, $668 million or 16.8 percent, Chattanooga $368 million or 9.2 percent, and Nashville $1.8 million.

Of the total number of jobs generated, 23,914 were in the Memphis area (74 percent), while 5,420 were in Knoxville (16.8 percent), 2,984 were in Chattanooga (9.2 percent), and 15 were in Nashville.

The economic contributions of the university and its affiliated organizations made it possible for taxing authorities to collect $358.7 million in federal taxes and $148 million in state and local taxes to support various public service programs.

The top 10 industries most affected by UTHSC and its affiliates included other institutions of higher education, real estate owners and firms, hospitals, physician offices, full-service and limited-service restaurants, wholesale trade establishments and local government enterprises.