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PRESS RELEASE

October 15, 2008 

Academic Medicine Means Business for Ohio:

$37.2 billion economic impact for the state

 

(ATHENS) — Ohio’s academic health care industry, which includes the Ohio University College of Osteopathic Medicine, plays a major role in the state’s economy and serves as a major job generator, according to an independent study commissioned by the Ohio Council of Medical School Deans. 

According to the report, OU-COM had a $5.9 billion impact on the Ohio economy, while generating more than $196 million in state revenue. The medical college and its affiliated teaching hospitals across the state supported the equivalent of 48,141 jobs, according to report.

Quantifying academic medicine’s economic impact in areas ranging from tax revenue to job creation, the report underscores the significant role Ohio’s seven medical colleges and affiliated teaching hospitals play in spurring growth as the state works to transform its economy. 

“Our medical school’s research has led to the development of new drugs and diagnostic tests, which in turn has produced new companies; and that has created jobs for Ohioans,” said Jack Brose, D.O., dean of OU-COM and chair of the Council of Medical school Deans from 2004 to 2007. “Medical education is about creating physicians and providing care for the community, but if you look at the numbers, we’re a critical part of the state’s economy, as well”

At OU-COM, research has led to a number of revenue-generating technologies and companies, and more licensed technologies are expected in the future, Brose said.

Ohio University earned $9.3 million in licensing royalties in the past two years for the drug Somavert. Marketed by Pfizer for people with acromegaly, a form of gigantism that creates excessive growth of bones and organs in adults, Somavert was a 1988 research discovery by OU-HCOM faculty member and eminent scholar John Kopchick, Ph.D.

About 90 percent of Ohio University research royalties stem from Somavert licensing fees. Income generated by Somavert is reinvested in research at all levels of the university—the inventor’s department, the inventor’s college and the university generally. OU-HCOM received about $1.4 million from Somavert royalties, Dean Jack Brose, D.O., reported.

Forbes magazine recently ranked Ohio University fourth in the country for the amount of licensing revenues it generates in relation to its research funding. The Forbes study was based on 2006 data from the Association of University Technology Managers (AUTM). The university had a 13 percent return on investment, according to Forbes’ findings.  

In addition to Somavert, research generated at OU-COM contributed to three locally based companies, including Interthyr, DiAthegen, and Diagnostic Hybrids Inc., the latter of which employs several hundred workers at its East State Street facility in Athens. To further develop and commercialize research at the college, OU-COM is a central partner in a new 92,000 square foot, $34 million Academic Research Center. Slated to open in winter 2010, the building will provide lab space for the development of new medical technologies, techniques and pharmaceuticals that will lead to new revenue streams for the college and university. 

OU-COM also contributes to the state economy by graduating a large number of physicians who remain in the state to practice medicine, and by bringing out-of-state medical students, interns and residents into Ohio. 

“OU-COM consistently has more of its graduates practicing in Ohio than any other medical school,” Brose said. “Every one of these medical practices can be considered a small business.”

Of all OU-COM graduates, 62 percent remain in Ohio to practice medicine. About 11 percent of all OU-COM graduates practice in Appalachia Ohio, contributing to the regional economy and providing care to underserved communities.

In addition to the 15 to 20 out-of-state students who annually matriculate to OU-COM, more than 100 students from out-of-state medical schools enter the Centers for Osteopathic Research and Education system annually for their clinical training. Not only do more than 50 percent of  OU-COM’s graduates choose CORE hospitals for their residencies and internships, but graduates from other medical schools from across the nation choose a CORE hospital for their graduate education as well. As a result, OU-COM imports -- and often retains -- talent in Ohio.

Other findings include the following:

Ohio’s seven medical colleges attracted nearly 66% of the $628 million in highly competitive, National Institutes of Health research funding awarded to Ohio researchers in 2007, according to the study.

  • Ohio’s academic health care industry is one of Ohio’s lead generators of employment—with 425,000 full-time positions, meaning one in every 12 workers in Ohio works directly or indirectly for a medical school or teaching hospital, according to the study.

 

  • Medical school graduates who remain within the state after graduation to practice medicine represent an additional impact of nearly $700 million annually, according to the study.

 

“Mission-driven medicine is a win-win for Ohio,” notes David Stern, M.D., current chair of the Council, vice president for health affairs at the University of Cincinnati and dean of UC’s College of Medicine. “This report demonstrates that our patient care, teaching and research missions have a significant impact on commerce, investment, taxes and employment in the state.” 

Founded in 1993, the Ohio Council of Medical Deans represents Ohio’s seven medical colleges and teaching hospitals including Ohio University College of Osteopathic Medicine, Case Western Reserve University School of Medicine, University of Cincinnati College of Medicine, Northeastern Ohio Universities Colleges of Medicine and Pharmacy, The Ohio State University College of Medicine, The University of Toledo College of Medicine and Wright State University Boonshoft School of Medicine. 

The report was produced by Tripp Umbach, which has conducted economic impact studies for hundreds of health care institutions and medical colleges throughout the country. 

 
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