Report finds $45 billion economic contribution from publicly funded medical research

The report highlights the financial benefits of experimentation as medical schools and teaching hospitals face funding cuts at the state and federal levels.

By Carolyne Krupa — Posted Nov. 21, 2011

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The impact of public research funding at medical schools and teaching hospitals nationwide stretches far beyond scientists' laboratories, contributing an estimated $45 billion to the U.S. economy each year.

That includes $17.3 billion in direct spending and $27.6 billion in indirect economic benefits such as spending by researchers, staff and visitors, according to a Nov. 7 Assn. of American Medical Colleges report. Every dollar invested in research at medical and teaching schools results in $2.60 of economic activity, the report said.

The same research dollars also support about 300,000 full-time jobs, or one in 500 U.S. jobs.

The report comes as institutions nationwide face budget cuts at the state and federal levels, said Ann C. Bonham, PhD, AAMC chief scientific officer.

"With the economic uncertainty and the pressures with the national debt, it is really a tough time," she said. "U.S. policymakers are having to make difficult decisions."

National Institutes of Health funding during the past several years hasn't kept pace with the rising costs of medical research or increasing numbers of grant requests, said Cary Cooper, PhD, dean of the Graduate School of Biomedical Sciences at the University of Texas Medical Branch in Galveston.

State budget cuts further compound the problem. Texas has cut higher education funding about 10% in the past few years, Cooper said. When research grants are lost or aren't renewed, laboratories close and people lose jobs.

"We're all feeling the pinch these days," he said. "We're getting squeezed from both ends. We try to plan ahead. We try to save some institutional money ... but it gets more and more difficult as we are asked to take more and more cuts."

The AAMC report was prepared by Pittsburgh-based economic consulting firm Tripp Umbach. It used 2009 data and was based on the Regional Input-Output Modeling System multiplier developed by the U.S. Dept. of Commerce.

Broad benefits

In Arkansas, medical research contributed $248 million to the state's economy in 2009, according to the report. New businesses often are formed as the result of medical advances, said Dan Rahn, MD, chancellor of the University of Arkansas for Medical Sciences in Little Rock. Fifty companies have been formed as a result of research at UAMS.

"It's important to highlight the contributions of academic medical centers and teaching hospitals, as federal and state officials grapple with budgetary restraints," Dr. Rahn said.

Medical research has other benefits that go far beyond how medical schools and teaching hospitals fuel local economies, said Harris Berman, MD, dean of Tufts University School of Medicine in Boston.

"There is no doubt that medical and scientific research contributes to the economy in many ways, both in its early stages and as those discoveries take root in new treatments," Dr. Berman said. "The real value of biomedical research, though, is its effect on patients' lives and health."

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Economic impact of research

Federal- and state-funded research at U.S. medical schools and teaching hospitals contributes billions of dollars and thousands of jobs to state economies annually. The five states that saw the greatest benefit gained about $20 billion and than 130,000 jobs from public research dollars in 2009.

State Economic impact Jobs
California $5.36 billion 35,734
Massachusetts $4.67 billion 31,113
New York $4.53 billion 30,216
Pennsylvania $2.89 billion 19,283
Texas $2.5 billion 16,644

Source: "The Economic Impact of Publicly Funded Research Conducted by AAMC-Member Medical Schools and Teaching Hospitals," Assn. of American Medical Colleges, November (link)

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External links

"The Economic Impact of Publicly Funded Research Conducted by AAMC-Member Medical Schools and Teaching Hospitals," Assn. of American Medical Colleges, November (link)

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