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Medicine as an Economic Engine

March 08, 2010

Buffalo News

March 7, 2010

The economists call them “Eds and Meds.”

They are universities and hospitals, institutions found in many cities, even those with otherwise decaying economies, that can be the basis for a financial rebirth that creates high- skilled, high-wage jobs not easily outsourced, offshored or otherwise made obsolete.

Merge the two, as in a medical school, and, analysts say, it creates the potential for the kind of economic growth that can ripple through a local economy. It is touted as a way for economic recovery to be partially channeled into urban centers, rather than only to the suburbs.

Academic medicine, as the blend of universities and medical centers is called, is coveted as the basis for much economic development in rust belt cities where, one analyst said, bell towers are replacing smokestacks as signs of economic health. Cities in that mold include Cleveland and Pittsburgh.

And Buffalo.

“The intersection of health care and health science education, that’s the basis for a new economy,” said David Dunn, vice president of health sciences at the University at Buffalo. “The return on investment is a home run.”

Across the state of New York, alliances of higher education and health care already provide a boost to the state’s economy worth $85.6 billion a year, according to a new study by a group representing the 15 public and private medical schools that operate in New York State. That’s $37.2 billion in direct impact, plus a multiplier factor of 2.3 that calculates another $48.4 billion in indirect activity from the academic health care dollars being spent throughout the economy.

According to the numbers put out last week by the Associated Medical Schools of New York, one dollar out of every $13 in the state’s overall economy, and one job out of every 11, comes from the state’s medical schools and their affiliated hospitals and research centers. It is, according to the organization’s leaders, a significant return on investment for a state that provides a relatively small amount of funding for medical schools, including the University at Buffalo’s School of Medicine and Biomedical Sciences.

From 1995 to 2008, the group says, the overall New York economy grew 186 percent, while the impact of academic medicine was up 270 percent.

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