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The Family Physician as Economic Stimulus*

Though we usually focus on the essential services they provide, physicians and their practices are a viable source of economic impact on their communities.

Using economic data from the IMPLAN database, we evaluated the annual economic impact of family physicians (FPs). Using MGMA data, we estimated that one full time family physician creates an average of five full-time supporting staff positions and created a linear input-output social accounting matrix to estimate direct, indirect, induced and total economic impacts on their communities. In 2007, the economic impact of one family physician was $904,696 on average, with sizable state to state variation. 

Multiplied by their total number nationally (according to the AMA Masterfile), family physicians generate a nationwide economic impact of $46,183,968,060 per year. This is a conservative estimate, and doesn’t include a number of intangible and tangible economic benefits of FPs, such as their contribution to the generation of income for other local health care organizations such as hospitals and nursing homes.

That remarkable figure reflects the impact of a single specialty, but one of particular importance as we debate the most effective ways to stimulate the economies of our nation’s poorest rural and urban communities. These underdeveloped geographies are also the ones most likely to be medically underserved (e.g., rural and urban Health Professional Shortage Areas). While most medical specialties tend to cluster in urban areas and near academic health centers, family physicians are the specialists that are most likely to work in such areas.

Physicians contribute to the economic viability of the communities they serve, as highly educated consumers, employers, and purchasers. A stimulus package that helps to attract or retain primary care physicians in areas of economic deprivation (e.g., through investment in loan repayment, primary care residency training or tax incentives for practice in underserved areas) might expect to see not only additional health benefits for local citizens, but also a further return on investment for some of the most economically deprived areas of the country.

*Note: Data reflects 2007 statistics.

February 2009