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Sizing up impact of hospital

May 18, 2019

When one considers both the for-profit and nonprofit players in Lincoln County’s economy, the economic clout of North Platte’s hospital becomes inescapable.

Forty-four years after its founding by the merger of two smaller hospitals, Great Plains Health ranks behind only the Union Pacific Railroad as North Platte’s largest employer.

Its 950 full-time equivalent jobs in 2017 supported roughly 540 others and generated nearly $96.2 million in Lincoln County payrolls and $67.6 million in local spending, according to a recent Nebraska Public Power District study for the hospital.

“Hospitals are often the centerpiece of economic development,” particularly in rural areas, said GPH Chief Development Officer Fiona Libsack. She spoke during an interview for National Hospital Week, which ends Saturday.

She pegged GPH’s full- and part-time employment at 1,092, just over half that of the 2,024 still employed locally by Union Pacific despite recent Bailey Yard job cuts.

U.P. leaders gave the latter figure while visiting the yard earlier this month, said Gary Person, president and CEO of the North Platte Area Chamber & Development Corp.

GPH’s employment outpaces that of North Platte Public Schools (No. 3) and the Walmart Distribution Center (No. 4), Person said.

Its economic importance is magnified when one accounts for “indirect” and “induced” employment and spending within the county, said NPPD economist Kenneth Lemke.

His study’s “indirect” figures cover economic activity by businesses that supply GPH with medical and nonmedical supplies or services such as security and landscaping.

“Induced” impacts reflect spending by hospital employees, patients and their families at retail businesses, motels, restaurants and entertainment venues.

Lemke said it’s not surprising that GPH plays such a pivotal economic role.

“In counties that have a large hospital, that is usually one of their top employers and one of their better-paying employers,” he said.

That’s also true of Nebraska towns with smaller “critical access” hospitals, said former GPH executive Mike Feagler, the Nebraska Hospital Association’s vice president for finance.

“There are a lot of high-paying jobs in North Platte that would not exist in a community like that without the hospital,” said Feagler, who worked for GPH from 1996 to 2017.

GPH’s economic impact stretches past Lincoln County’s borders, Feagler and Lemke said, through regional patients and GPH employees who commute. Libsack said the hospital’s employees come from 27 different ZIP codes.

Lemke’s study found that GPH spent nearly $26.5 million within Lincoln County in 2017, with employees spending just over $41 million.

When GPH departments buy supplies, they’re expected to buy locally whenever possible, Libsack said. When it isn’t, the hospital seeks suppliers elsewhere in Nebraska. It turns to out-of-state suppliers as a last resort.

“We really try as much as we can as an organization to spend locally, because we know that has a big impact on the economy of our community,” Libsack said.

Other community benefits, she said, are made possible by a sometimes controversial factor: GPH’s nonprofit status.

That status can be traced back before the hospital’s dedication on Aug. 9, 1975, to the Catholic and Lutheran organizations that respectively owned and operated North Platte’s old St. Mary’s and Memorial hospitals.

Both were acquired by Great Plains Medical Center Inc., formed by community leaders in 1971 with an eye toward improving health care quality in the community and region.

At its dedication, the single hospital had 20 physicians on its medical staff, the late Telegraph Editor Keith Blackledge wrote in his 2009 book “That Town Fights About Everything.”

Today’s GPH boasts half again that number — 30 — of available medical specialties. The hospital also operates 30 Great Plains Physician Network free-standing and outreach clinics throughout 38 counties in Nebraska, Kansas and Colorado.

Visiting specialists join more than 90 staff physicians — 4½ times the 1975 number — and GPH’s other 1,000 staffers in providing care, according to GPH’s website and its 2018-19 Community Impact publication. Upgrades in medical technology have followed hand-in-glove.

“The people in North Platte and Lincoln County can get access to a lot of state-of-the-art care,” Feagler added. “Ten years ago, for a lot of this stuff, they’d have had to come to the Omaha or Lincoln hospitals or (go) to Denver to get that.”

Libsack said the hospital didn’t have “a full-blown heart program” until 2011, a year before she joined the GPH staff from Poudre Valley Hospital in Fort Collins, Colorado.

Her husband, Rick, had a heart attack after they moved to North Platte.

“How many in rural America wouldn’t make it without something like a heart program?” said Libsack, who also worked for Scottsbluff’s Regional West Medical Center in the 1990s and early 2000s.

But she added that it’d be much harder for GPH to keep growing its services without the tax exemptions its nonprofit status makes possible.

Lemke’s study showed the hospital paid $258,800 in taxes in Lincoln County in 2017, mainly reflecting North Platte city sales taxes and a limited amount of nonexempt taxable property. GPH’s local suppliers and employees accounted for the rest of the $2.17 million in countywide taxes attributed in Lemke’s study to the hospital’s presence.

A legislative bill by state Sen. Mike Groene of North Platte would limit hospitals’ property tax exemptions to the percentage of its services “that are provided gratuitously.” LB 529 remains in the Revenue Committee.

GPH provided about $30 million in free “uncompensated care” in both 2016 and 2017, according to the 2018-19 Community Impact report.

Lemke’s economic impact study doesn’t include that figure, divided roughly equally both years between bad debt, care for uninsured patients and other “charity” care.

Libsack said GPH offers flexible payment plans and “a very generous financial assistance policy,” which “has allowed us to serve a greater number of people who needed the help.”

But “we wouldn’t be in a position to do that if we were a for-profit company,” she said. And “we offer many services as a nonprofit hospital that, frankly, are not profitable — because our community needs them.”

That includes psychiatric and mental health services, which are considered sufficient only in the Omaha and Lincoln areas under a recent draft “state-designated shortage area” map by Nebraska’s Rural Health Advisory Commission.

Measuring a hospital’s benefits “can’t be strictly economic, (and) it cannot be strictly human services,” Libsack said. “It’s important for our community to understand that, because I can’t imagine living in a community without quality health care.”

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