The basis of “How to Measure the Economic Impact of the Health Sector” is the impact analysis model. Impact analysis is the methodology used to create the Health Sector Impact Table. The Health Sector Impact Table is created through the use of multipliers showing:

	the direct economic impact of each of five health sectors and of total health services,
	the total economic impact (the multiplier or secondary effect) of each of the health sectors and of total health services on the community’s economy,
	the retail sales resulting from each of the five health sectors and from total health services, and
	the resulting sales tax revenues (1˘).

The total economic impact includes the direct economic impact and the secondary impact (multiplier effect) of the health sector on all other sectors in the local economy. The "Measuring the Economic Importance of the Health Sector on a Local Economy: A Brief Literature Review and Procedures to Measure Local Impacts" shows more detail on how to create the health sector impact table. The Health Sector Impact Table is the basis of measuring the health sector impact on a local economy.

The table shows five health sectors:

	Hospitals
	Physicians, Dentists & Other Medical Professionals
	Nursing and Protective Care
	Other Health and Medical Services
	Pharmacies

For each of these health sectors, data is derived from IMPLAN to illustrate the direct impact through the employment and payroll (income) generated by each of these health sectors. By totaling the employment and payroll for the five health sectors, the direct impact of total health services is calculated. The multipliers, employment, and payroll (income) are derived from the IMPLAN model, except in isolated situations. These situations (typically, hospitals and pharmacies) may require that other secondary data sources will be needed for employment and payroll (income).

The multipliers are derived from the IMPLAN model. The multipliers are county specific; each county has specific multipliers reflecting that county’s economy. IMPLAN is available through Minnesota IMPLAN Group, Inc. (MIG). Data is available for every county in the U.S. Typically, a state will purchase the software program and the data sets for all counties in their state. Another option is to purchase the software program and purchase individual counties as needed. It is the responsible of the individual states to obtain the software and data files. IMPLAN is necessary to develop the Health Sector Impact Table.

The Local Retail Sales Capture Ratio will need to be calculated in order to determine the amount of retail sales and a 1˘ sales tax for each county Health Sector Impact Table. The Local Retail Sales Capture Ratio is described in the publication, "Measuring the Economic Importance of the Health Sector on a Local Economy: A Brief Literature Review and Procedures to Measure Local Impacts."

The formula to determine this ratio is as follows:

The resulting Health Sector Impact Table is the objective of the impact analysis session. This table illustrates the direct impact of employment and payroll (income) on each of the health sectors, as well as for total health services. For instance, in the Table, the direct impacts of the health sector are as follows:

		the hospital sector has 97 employees and $2,400,000 payroll;
		for physicians, dentists and other professionals, employment is 67 and payroll is $2,114,000;
		nursing and protective care has employment of 192 and payroll of $2,121,000;
		employment is 144 and payroll is $1,826,000 for the other health and medical services sector;