AMA: Physicians generate $2.3T in economic activity

In a report touting the contributions physicians make to the U.S. economy, the American Medical Association said physicians were supporting more jobs, tax revenues, wages and generating more economic activity in 2015 than they were three years earlier.

The newest edition of the AMA Economic Impact Study covered economic contributions of physicians in 2015. By every measure, their output has increased compared to 2012, the year examined in the report’s last update released in 2014:

  • Total economic output: $2.3 trillion in 2015, up from $1.6 trillion in 2012.
  • Jobs supported by physicians: Nearly 12.6 million in 2016, or 17.1 jobs for each physician on average—including their own. In 2012, doctors supported nearly 14 jobs on average.
  • Wages and benefits: “Each physician contributed $1.4 million to workers’ wages and benefits on average” in 2015, according to the AMA, up from $1.1 million in 2012.
  • Tax revenues: Each physician’s contribution generated $126,129 in state and local tax revenue on average, up from $90,449 in 2012.

“Through the care provided to their patients, physicians can have a positive and lasting impact on the health of their patients and the community as a whole,” the report said. “However, the breadth of a physician’s impact reaches far beyond just the provision of patient care. Physicians also play a vital role in the state and local economies by creating jobs, purchasing goods and services, and supporting state and community public programs through generated tax revenues.”

The report’s figures include both direct benefits from physicians, such as wages and benefits for physicians themselves and other employees hired to support care delivery, indirect benefits like the supplies and equipment physicians purchase and induced effects such as the money those employees or vendors spend to support local businesses.

At the state level, the report said physicians generally beat out other industries on total economic output and number of supported jobs, wages and benefits, with the exception of the legal services industry beating them out in the District of Columbia in all categories and the North Dakota nursing and community care industry supporting more jobs.

Physicians in California, the most populous state in the U.S, unsurprisingly beat out other states on these figures, where its nearly 90,000 physicians generated $232 billion in economic activity and $11.2 billion in taxes while supporting nearly 1.2 million jobs.

“The AMA’s economic impact study illustrates that physicians are strong economic drivers that are woven into their local communities by the commerce and jobs they create,” AMA President David O. Barbe, MD, MHA, said in a statement. “These quality jobs generate taxes to support schools, housing, transportation and other public services in local communities.”

While findings that spending on medical services created jobs at physician offices or hospitals is hard to dispute, previous editions have been criticized for supposedly using multipliers which show an inflated economic impact. Not all economists have sung healthcare’s praises, with one telling the New York Times in 2014 the sector was “bloated and imposing a horrible tax on the economy.”

Some have argued high pay for physicians makes healthcare more expensive for the rest of population, outweighing the economic activity generated by doctors. Dean Baker, co-director of the liberal-leaning Center for Economic and Policy Research, wrote in POLITICO in Oct. 2017 that generous salaries for physicians in the U.S. amounts to a $100 billion “doctors’ tax.” Part of his solution was to allow foreign-trained doctors to be licensed to practice in the U.S. and expand healthcare duties for lower-paid non-physician practitioners—the latter being a change the AMA has promised to actively oppose.