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The Cleveland Clinic, the region's largest and the state's second-largest employer, had a $12.6 billion economic impact in 2013, according to a study commissioned by the health system.

(Plain Dealer file)

CLEVELAND, Ohio-- The Cleveland Clinic and its network of suburban health centers' economic impact on Northeast Ohio and the state added up to $12.6 billion in 2013, according to a study the health system commissioned.

That total includes wages and benefits for its more than 48,000 employees, construction, state and local taxes, the creation of jobs at spin-off companies, hospital purchasing, as well as the indirect benefit of its employees spending on local goods and services.

"We think it's a good practice just to make sure the community and our constituents understand the value of what the organization means to the economy here in Ohio," said Steven Glass, the Clinic's chief financial officer.

Glass said that many people don't fully understand the magnitude of the impact the Clinic has on the community beyond direct employment of doctors and nurses.

"Certainly when people see a new building come out of the ground they understand that's driving construction jobs, but I don't think they understand the cascade effect of having very good well-paying jobs in our community and the benefit those households then contribute to the economic vitality of Northeast Ohio," he said.

Glass also cited the Clinic's national and international reputation as a draw for patients and healthcare specialists to the region, which accounted for $189 million in visitor spending in 2013.

By the Numbers

93,560

$5.9 billion

70,430

$4 billion

$811 million

$1.3 billion

$12.6 billion

The hospital first commissioned an economic impact report in 2003 and completed another in 2010. The 2010 report cited $10.5 billion in regional and statewide economic impact through the direct or indirect employment of more than 70,000 people.

"We are committed to contributing to the strength of the city and the region, by supporting families, patients, area businesses, and the communities we serve across the region," Clinic CEO Toby Cosgrove said in a statement.

The Clinic is the largest employer in Northeast Ohio and the second largest in the state. In 2013, Clinic hospitals directly or indirectly supported more than 93,000 jobs which generated $5.9 billion in wages.

The Clinic and other non-profit hospitals are exempt from property taxes, which for years has opened them up to criticism for not spending enough on free care for low-income patients. In response, many have commissioned economic impact reports and published annual records of charity care and philanthropy to demonstrate the services they provide to the community.

In December, the Clinic reported a 7 percent increase in net community benefit in 2013, to $652 million. The Clinic reported $466 in operating income and $6.7 billion in total revenues in 2014.

A 2013 study in the New England Journal of Medicine found that tax-exempt hospitals spent an average of 7.5 percent of their operating expenses on community benefits, based on IRS filings in 2009. More than 85% of these expenditures were devoted to charity care and other patient care services. About 5% were devoted to community health improvements.

The Affordable Care Act, or Obamacare, strengthened some of the requirements for such hospitals to maintain their non-profit status. Some of the tightened restrictions include requiring tax-exempt hospitals to widely publicize financial assistance to those who cannot pay their medical bills, banning certain aggressive debt collection methods, and requiring hospitals to actively engage in programs that improve the health of the communities in which they're located.