EcoNorthwest Economic Assessment for Public Funding Report 

Background

Umpqua Valley Development Corporation is exploring the feasibility of developing the Souther Oregon Medical Workforce Center ("Center") in Roseburg, Oregon. The Center would provide training for high-demand health care positions, offer affordable and accessible post-secondary medical education, serve as a pipeline of skilled allied and mental health providers, and ensure ongoing access to local quality health care. 

 

The Center is designed to address shortages of health professionals and training programs in rural Oregon. Of the 26 counties in Oregon, 26 are fully or partially designated as Health Professional Shortage Areas (HPSAs) by the Federal Health Resources and Services Administration. Twenty-four of these counties are rural. At the same time, health education programs in Oregon are predominatly located in the urban areas and lack sufficient capacity to address projected health professional needs in the state.  Additionally, these programs are highly competitive, with admission rates ranging from six percent to 35 percent. At the local level, the Roseburg Veterans Affairs Health Care System (Roseburg VA) has an ongoing need for graduates of accredited nursing programs to support its operations. 

 

Regionally-based medical training programs are essential for addressing southern Oregon's health care needs. Over 75 percent of nursing program graduates end up working within 100 miles of their school, and Oregon-born health professionals working in southern Oregon have a lower turnover rate (10 percenter) than those born outside the state (14 percent). 

 

Umpqua Valley Development Corporation has partnered with George Fox University to explore the development of the following programs: Doctor of Medical Science, Doctor of Physical Therapy, Doctor of Psychology, Doctor of Nurse Practitioner, Bachelor of Science in Nursing, Registered Nurse to Bachelors, Master of Social Work, and Bachelor of Social Work. Other academic institutions may be recruited to develop more programs. IN addition to providing local health training, the Center plans to use rural clinical rotations and a number of market-based cost savings mechanisms to encourage graduates further to work in rural Oregon. 

Conceptional location.

Public Economic Value

​Shortages of health care professionals lead to inefficiencies and high-cost burdens to Oregon’s health care system. While graduates of workforce development programs often acquire higher-paying jobs that benefit them privately, their role in reducing costs to the health care system provide additional quantifiable benefits. This economic value analysis isolates components of value:

  1. accrue broadly to Oregon residents,

  2. accrue directly from graduates of the Center,

  3. have an empirical basis,

  4. are conservatively estimated, and

  5. can be used to evaluate the return on investment for public financing.

Monetized benefits of the Center include:

  • Reductions in staff turnover costs: $2 million,

  • Reductions in preventable hospitalizations: $21.5 million,

  • Reductions in hospital readmissions: $14.4 million, and

  • Reduced reliance on public assistance programs: $119,000.

The benefits total $38.1 million over a 20-year time horizon and a seven percent discount rate. 

Additional likely benefits are difficult to monetize directly but include: 

  • Increased clinical productivity,

  • Reductions in emergency room diversions,

  • Reductions in travel and wait time for specialized care,

  • Improved Veteran health care access and

  • Improved community mental health outcomes.

Consideration of these additional benefits indicates that our estimate is likely a conservative lower bound.

Financial Feasibility

George Fox University has a strong record o operating successful medical training programs at their campus in Newberg, Oregon. Using operational cost estimates and accreditation timelines provided by the university and accounting for building maintenance and debt service costs, this analysis evaluates at what point the Center will become cash flow positive and is able to pay off all operating debts incurred during the start-up years. Under standard assumptions, our analysis indicates that the Center is expected to become cash flow positive by 2024 and pay off all operating debts by 2029. Given that each program requires a different amount of initial investment, programs would become cash flow positive at a different pace. The earliest is the Master of Social Work program (2012), while the latest is the Doctor of Nursing Practice program (2025). Sensitivity analyses that evaluate scenarios with five percent lower enrollment or five percent higher labor costs do not affect the year the Center becomes cash flow positive but do affect the amount of financing required to cover the short-term operating debt. 

Economic Impacts

Construction and operations of the Center will lead to increased economic activity in the region, both through direct spending as well as indirect spending that ripples through the regional economy. An economic impact analysis calculates these direct, indirect, and induced gross economic contributions of spending related to the Center and produces estimates in terms of changes income, jobs, and gross economic output. During construction, the Center would support 260 jobs with $33.8 million total economic output in the year 2020. During operaiton, the Center would support 148 jobs with $13.8 million total economic output annually. Spending by students would support a total of 35 jobs with $3.7 million in total output annually. 

Bottom Line

Construction and operations of the Center will lead to increased economic activity in the region, both through direct spending as well as indirect spending that ripples through the regional economy. An economic impact analysis calculates these direct, indirect, and induced gross economic contributions of spending related to the Center and produces estimates in terms of changes income, jobs, and gross economic output. During construction, the Center would support 260 jobs with $33.8 million total economic output in the year 2020. During operaiton, the Center would support 148 jobs with $13.8 million total economic output annually. Spending by students would support a total of 35 jobs with $3.7 million in total output annually. 

Umpqua Valley Development Corporation

info@umpquavalleydevelopmentcorporation.com