The Oregon Caregiver Fall/Winter 2016

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Fall/Winter 2016 The Oregon Caregiver 17
Data released earlier this year by the
American Health Care Association
(AHCA) confirms the long term
care service sector is a vital component
of the Oregon economy. The new data
estimates the total economic footprint of
Oregon’s long term care service sector at
nearly $7 billion (note: this figure includes
direct, indirect, and what economists call
the ‘induced’ impact of the sector). This
$7 billion figure represents an increase
of over $2 billion since 2011, when the
last economic analysis of this sector
was generated for the Oregon Health
Care Association (OHCA). This year,
for the first time, the analysis included
in-home care and home health agencies,
while previous estimates looked only at
nursing facilities and assisted living and
residential care communities. Simply put,
nearly 3.5 percent of all economic activity
in Oregon can be attributed to the long
term care service sector.
Perhaps the most striking feature of
the data is the sheer number of jobs in
the sector. In 2014, more than 80,000
Oregonians were employed in long term
care services. The long term care service
sector also produces significant tax
revenue for both the federal government
and the State of Oregon. In 2014, the
federal government collected over $552
million from the sector while the state
netted $289 million. This revenue is
important to the funding of vital public
services such as public transportation,
schools, and safety net services for the
most vulnerable members of society.
In 2016, the legislature mandated a
minimum wage increase that will be
phased in over the next six years. The
first wage increase went into effect July 1.
Increasing wages will create uncertainty
for the sector as rising labor costs may
pose a challenge to many providers
who must operate on thin margins.
Meanwhile, Oregon providers are largely
constrained by their dependence on
public funding, primarily Medicare
and Medicaid. An increase in Medicaid
reimbursement rates would be one way to
help offset the uncertainty of the higher
labor costs. Keep in mind that for every
Medicaid dollar that Oregon spends on
long-term care services, the state receives
an additional 66 cent match from the
federal government for nursing facilities
and a 70 cent match for all other services.
The significance of the long term care
service sector to the Oregon economy
is difficult to overstate. As Oregon’s
population grows older with each
passing year, this sector will also likely
see increased growth. The sector already
provides jobs to more than 80,000
Oregonians. Moreover, the sector
generates nearly $1 billion each year in
combined federal and state tax revenue
and accounts for nearly 3.5 percent of all
economic activity in the state. Both the
jobs and economic activity of this sector
are felt by nearly all Oregon communities
—not just one town, county, or region. The
value of the employees who work in this
sector as well as the providers who employ
them should be recognized by all. 
Dr. Dawson, D.Phil, is the Director of Research & Analytics
at OHCA.
Sources: AHCA/NCAL. Economic Impact of Long Term
Care Facilities Oregon. January 2011. AHCA/NCAL Research
Division. Nursing, Residential Care, Personal Care Aides and
Home Health Care Impact for Oregon, 2014. March 2016.
Valuing the Valuable
Oregon’s Long Term Care Service Sector
By Walt Dawson, Oregon Health Care Association
$7 BILLION
Total Economic Footprint of
Oregon's Long Term Care Service
That's nearly 3.5% of all economic
activity in Oregon
data & research