Estimating the Economic Impact of HRSA OHRP Outreach and Network Development Grantees

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Estimating the Economic Impact of HRSA OHRP
Outreach and Network Development Grantees
Carol J. Simon PhD September 2009
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ORHP EIA Project Purpose

• Purpose measure the economic impact of ORHP
  grantees in their communities
• ORHP grants as Mini-Stimulus packages
• How have Grantees used funds
• What is the impact of that spending on job growth
  and economic activity
• Target the 3rd and 4th year Rural Outreach and
  Network Development program grantees
• EI Team
• The Lewin Group
• The University of Washington Rural Health
  Research Center
• Mark Doescher Sue Skillman

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Goal a tool for estimating Economic Impact (EI)

• Deliverable easy-to-use formulas to measure
  Economic Impact
• Separate versions for Outreach program and the
  Network Development program grantees
• Formulas will be utilized by current future
  grantees to demonstrate the potential long term
  impact of programmatic investment on rural
  communities
• Demonstrating economic impact can be a vehicle
  for sustaining funding and support

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What Is An Economic Impact Analysis

• Economic Impact analysis tracks the reach of
  program dollars
• Translates project-specific impacts into
  community-wide effects
• Jobs created
• Spending that supports local businesses and taxes
• Impact of new or expanded services on the
  well-being of the population
• Bottom line every dollar invested by HRSA
  creates more than a dollars worth of value in
  the community

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Type of economic impacts

• Direct impacts are measured by the new health
  community services and the number of jobs that
  are generated by grantee activities (e.g. wages
  salaries and benefits paid directly to
  grant-supported employees)
• Indirect impacts are the result of a second
  round of spending that occurs when the grantees
  purchase goods and services from local businesses
• Induced impacts occur when employees of the
  grantees and of the firms that sell goods and
  services to the grantees in turn spend their
  earnings on local goods and services. This effect
  multiplies the initial program effects.

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Framework for Economic Impact Analysis
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Why It Is Important to Conduct EIA for ORHP
Grantees

• Used to demonstrate program value and argue for
  on-going support
• Help understand the timing and extent of program
  impacts in the community
• Build the business case to other funders and
  attract new financial and in-kind resources that
  can leverage the reach of HRSA dollars
• Identify high-performing grantees and understand
  best practices
• Benchmark grantee performance against expected
  norms

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Steps in Development of the EIA Formulas Models

• Select study sample
• Review grantee documentation
• Contact program grantees and collect information
• Jobs spending to provide services
  infrastructure investment community impact area
• Data organization
• Estimate the multiplier model
• Apply to grantees
• Estimate the long term increase in jobs spending
  and economic activity in the community

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Sample of Grantees

• Study Sample Selection
• Criteria used in selecting 3rd and 4th year
  grantees
• Assured geographic representation
• Assured adequate numbers of HIT Network and
  Outreach grantees
• Assured representation of all major issue areas
  identified by ORHP and grantees
• 3rd year grantees recommended by ORHP and program
  staff
• 20 as the total (15 Outreach 4 Network
  Development and 1 HIT)
• Selected 20 4th year grantees
• 13 Outreach 4 Network Development and 3 HIT

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Characteristics of Contacted Grantees by Covered
Issue Areas
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Grantee Characteristics
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Key Data Needs-- overview

• Program and project information
• Spending HRSA co-funded spending
• Health care services
• Educational services
• IT
• Infrastructure
• Employment
• Clinical
• Administrative
• Technical
• Co-funding and in-kind support
• Grantee Information
• Program activities
• Number and location of sites
• Community information
• Service area
• Economic political and social environment

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Key Data Needs- detail

• Program and project information HRSA grant and
  program primary objectives funding
  budget/spending on staff and labor expenditures
  on health services expenditures on
  infrastructure (type) number and types of health
  services provided FTE staff and functions
  information on new services or expanded functions
  made possible by the grant.
• Grantee Information Grantee size (FTE ) and
  type (e.g. health center provider organization
  research organization etc) number and location
  of sites affiliations with larger/parent/network
  organizations other relevant HRSA funding other
  funding supporting grant activities taxes paid.
• Community information Name and size of
  community location demographic and economic
  descriptive information. Community and
  environment factors affect the size of economic
  impacts and multipliers (i.e. the extent to
  which local activity multiplies in the local
  economy and health sector).
• Grantee contact information from the directory
  of grantees grantee profile annual reports and
  ORHP web sites.

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Data Collection Documentation Review and Data
Capturing Protocol Development

• Review HRSA program documents
• Application non-competing renewal
  sustainability assessments profiles
• Prepare data capture protocols for interviews
• Flexibly organize data across grantees involved
  in a wide range of activities (e.g. health
  promotion disease management access to care)
• Easy and informative
• Feed into Excel-based database
• Examine different economic impacts as well as the
  pathways by which the initiatives affect the
  community and region
• Respond to grantee questions

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Data Collection Contact Program Grantees

• Develop contact strategy for phone interviews
  with grantees
• ORHP sent introductory message
• Interview protocol offer structured scripts and
  guidance on the conversation with grantees
• Schedule and implement phone interviews
• Phone calls took place between late December 2008
  and April 2009
• Grantees were exceptionally enthusiastic and
  supportive excellent collaboration in data
  collection (thank you!)
• 37 out of 40 completed good representation
  across geography and program type

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Data availability Percentage of grantees able to
access various types of data
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Lessons Learned from Data Collection

• Key lessons learned
• Some programs evolved from what was proposed in
  the grantees initial grant application
• Considerable variation in the way that grantees
  documented finances
• required flexibility in identifying types of
  spending
• Important elements success factors
• Recognize variability among grantees with regard
  to how they count the services they deliver
• Probes and examples helpful
• Service area is key many grantees need
  assistance conceptualizing and measuring their
  reach
• Differentiate in-community versus outside
  spending
• Track donated and in-kind services and discounts
• Identify in-kind services from partnerships

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Observations -- 2

• Network Development grantees were often
  fundamentally different in their staffing
  practices
• many Networks had no direct employees only
  contractors or consultants.
• Network Development grantees were at times
  challenged to define their respective service
  areas. Some Network grantees may cover all rural
  areas in the state yet have offices in just one
  area which could make balanced EIA formulations
  challenging.
• some grantees that are in the process of
  expanding their network boundaries to neighboring
  states.

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Observations Feedback

• Information on spending and employment were good
  
• Either provided in the interview or were fairly
  easily obtained/verified from accounting staff.
• Qualitative support to the numbers was in
  abundance. Grantees could generally speak in
  terms of hard numbers and qualitative context for
  their service communities.
• Conversely in-kind items and donated services
  (both estimations of value and systematic
  tracking) often were less frequently reported as
  for many grantees this was not a need and thus
  the resources were not put into tracking.
• Some grantees did not systematically track
  figures on training done by staff or health
  and/or other services provided
• Some did not maintain systematic tracking of
  total visits versus unduplicated visits or
  non-direct services provided (e.g. referrals).
• Difficult to construct this information
  retrospectively

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Observations -- 3

• Outreach grantees that are part of a county
  health department could capitalize on in-kind or
  shared labor
• labor provided by staff and executives (e.g.
  directors and coordinators) who were compensated
  in-part or in total by other funding sources
  leaving more HRSA dollars available for other
  program activities.
• However with so many funding sources these
  grantees sometimes thought more in terms of the
  global project instead of individual funding
  sources.
• Increasingly all programs noted they were
  relying on supplies and equipment from national
  vendors as many rural areas are limited in
  retail offerings. This puts many grantees at a
  disadvantage for positively impacting their
  areas local economy.

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Observations -- 4

• Internal Grantee Barriers
• Staff turnover and internal shifting of
  responsibilities affected a few of the grantees
  and makes data collection and overall management
  more challenging.
• Data Collection Issues that are Likely to Persist
• Many grantees are short staffed and the project
  directors and coordinators may wear multiple hats
  for purposes of grant administration as well as
  within their parent organizations.
• Many grantees only thoroughly track and report
  what is absolutely necessary.
• Variability in program expenses from year to year
  will likely persist as grantees needs change
  and priorities shift during implementation.
• Allocation of HRSA funding versus supplemental
  funding will continue to be a struggle as
  grantees continue to often pool their resources.

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Recommendations for Future EIA Related Data
Collections

• It will be useful to provide clear data
  collection guidelines at the implementation of
  the grants
• It may also be helpful to make technical support
  available for these tasks
• Engage grantee personnel who have good knowledge
  on the EIA relevant aspects
• Grantees operating programs or networks within
  existing organizations (e.g. a health
  department hospital state hospital
  association) appear to have the advantage of
  being able to capitalize on existing economies of
  scale.

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EIA Formula Model Development

• Application of multipliers to the collected
  grantee data
• Summarize direct impacts of grantee initiatives
  on local employment spending and service
  provision
• Apply multipliers of the selected Input-Output
  model to the summarized data
• Calculate direct and indirect economic impacts
• Develop user-friendly formulas for future
  grantees
• Populate formula model using the EIA study
  results
• Test model fit by comparing the predicted impact
  value against the actual data of the sample
  grantees
• Apply coefficients to develop formulas for future
  grantees
• Add user-friendly interface to model to enhance
  user convenience (optional)

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Example to Demonstrate the Economic Impact
Calculation

• Grantee example
• Hypothetical Network Development Grantee
• Multipliers/Community
• Missouri community
• Data organization simplified calculations
• Use sample simplified (disguised) data that was
  collected from documentation review and grantee
  interviews

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Sample Data Summary Show-me State Network
Grantee
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Grantee Community Characteristics

• The size and geographic reach of the grantees
  service area affects the multiplier larger areas
  gt higher multiplier
• Unpaid volunteer labor and in-kind services are
  important to many grantees underestimating these
  can lead to an understatement of the impact

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Investment multiplies as it moves thru the
community

• Each dollar of investment by HRSA
• Creates direct program jobs services
• Creates indirect (multiplied) value as the new
  employees spend in the community
• The more the community spends locally the larger
  the multiplier
• Can feedback to create new support for HRSA
  grantees

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The multiplier measures how many times new
dollars recycle in a local community

• Example HRSA grantee spends 311000 in their
  first year
• Creates 726K in local economic value
• Of which 22300 in in the form of increased
  wages and earnings
• Multipliers are specific to the industry and the
  size of the service area health care has an
  above average multiplier effect (2.33)

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The multiplier measures how many new jobs are
ultimately created from expanded economic
activity

• Example HRSA grantee hires 2.3 FTEs
• But attracts an additional 7.0 volunteer FTE in
  administration
• Total employment 9.3 FTE
• Jobs multiplier for technology services 2.4031
• For administrative services 1.102
• Volunteer labor is important!
• Multipliers are specific to the industry and the
  size of the service area health care has an
  above average multiplier effect

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Grantee Activities create significant community
value

• Each dollar invested results in over 2 new
  dollars of value in this example
• Health care and technology have high multiplier
  values
• Expanding the service area increases value
• Cautions
• Need to be realistic about reach understand
  but dont overestimate impact area
• Understand the functions and effort provided by
  volunteers co-funding and in-kind support

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Next Steps

• Calculate economic impact values for the sampled
  grantees
• Build the multiplier model
• Develop a template tool that grantees can use
• Inputs
• Grantee activities focus health care
  education network infrastructure
• Jobs classification
• Spending by type of spending
• Geographic area served
• Excel-based tool to calculate impacts

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THANK YOU!

• We are extremely grateful to the HRSA Outreach
  and Network Development grantees who have worked
  with us on this project.
• we couldnt do it with out your time and
  effort!
• The EI Team at the Lewin Group and University of
  Washington Rural Health Research Center