Luis Nunez and his wife Maria celebrate his new life. Luis was the recipient of the 400th liver transplanted at Vanderbilt. (photo by Dana Johnson)
Vanderbilt University Medical Center is a major boost to the local economy, feeding an estimated $1.9 billion into the area on an annual basis. The financial estimates are part of recently released financial analysis of contributing economic forces in Middle Tennessee.
VUMC, combined with the University’s $1.1 billion, stimulated the economy with a $3 billion contribution last year—a 7 percent increase from fiscal year 2000’s $2.8 billion.
“Health care is a fairly stable industry,” said Rick Wagers, VUMC senior vice president and Chief Financial Officer. “The focus of our business is all the things that make us a bedrock of the community. From community enrichment to attracting professionals to the community, all of this perpetuates the economy.”
The study was based upon generally accepted practices for assessing economic impact and represents the fiscal year ending June 30, 2001. The analysis takes into account direct expenditures such as salaries and wages, fringe benefits, vendor payments, capital construction and equipment, and taxes and fees to state and local government, as well as the spending Vanderbilt’s employees, faculty, students, patients and visitors inject into the economy. The analysis encompasses all aspects of Vanderbilt’s operations, including teaching, research and health care services.
“While the economic impact of the University is enormous, it is the people of Vanderbilt—students, faculty, researchers, health care professionals and many others—who really make a difference in the quality of life we enjoy in Middle Tennessee,” said Chancellor Gordon Gee. “Whether it is through the uncompensated medical care we provide to the region, the thousands of jobs we generate or the cultural opportunities we offer, Vanderbilt takes very seriously its citizenship and partnership in the community.”
The largest private employer in Middle Tennessee and second largest in the state, Vanderbilt employs about 15,400 persons-more than 70 percent of whom live in Davidson County. Direct expenditures for FY 2001 include $700.7 million in salaries and wages, $140.8 million in fringe benefits including employer-paid Social Security and Medicare, $568.6 million in vendor payments for goods and services, $141 million in capital construction and equipment spending, and $2.8 million in state and local taxes and fees.
“For each dollar Vanderbilt spends, it has a rippling effect throughout the community,” said Michael Pons, the University financial analyst who conducted the study. “We are able to measure the direct impact and, through the use of multipliers applied to each category of expenditure, the rippling effect throughout the 40 counties that make up Middle Tennessee.”
Pons said the multipliers used in the annual analysis are comparable to those employed by other universities and were reviewed for reasonableness with the Nashville Area Chamber of Commerce and the Tennessee Department of Economic and Community Development.
Pons said the University’s economic activity supported an estimated 28,900 jobs in Middle Tennessee last year.
Additionally, faculty and staff generate more than $113 million in federal, state and local taxes as a direct result of their employment at Vanderbilt. Vanderbilt employees pay an estimated $85.5 million in federal income tax, $11.1 million in state and local sales taxes, and $13.8 million in local property taxes.
“Vanderbilt plays a critical role in everything that makes Nashville a great city,” said Nashville Mayor Bill Purcell. “Whether it’s providing jobs for our people, educating our children or investing in our communities—Vanderbilt is there, every day.”