Eds and Meds: the role of universities and hospitals in economic development

     A team of surgeons work on multiple transplants at the University of Pittsburgh Medical Center, in Pittsburgh, Pa. (AP Photo/University of Pittsburgh Medical Center,John McCaulley)

    A team of surgeons work on multiple transplants at the University of Pittsburgh Medical Center, in Pittsburgh, Pa. (AP Photo/University of Pittsburgh Medical Center,John McCaulley)

    One in a series explaining key terms and concepts of Pennsylvania’s economy. Today’s topic: What are eds and meds and why do they matter?

    Seeking a better understanding of Pennsylvania’s issues and proposed solutions? Sometimes, complicated jargon and concepts can get in the way. That’s why we started Explainers, a series that tries to lay out key facts, clarify concepts and demystify jargon. Today’s topic: ‘Eds and Meds’

    What are ‘Eds and Meds’?

    When people talk about ‘eds and meds’ they’re talking about education and medicine, or, more commonly, research universities and hospitals. As cities across the U.S. deindustrialized, and lost jobs in the process, eds and meds grew and turned into increasingly important institutions for many of those cities. Today, eds and meds are often some of the largest employers in urban areas.

    In addition to providing jobs, eds and meds have also proven to be important, immobile anchor institutions. As they’ve grown, they’ve become an interwoven part of their cities in ways that extend beyond their immediate missions of providing education and healthcare. A 1999 Brookings Institution report said, “eds and academic meds constantly conduct research and impart technical expertise on their students and workers. In an era increasingly dependent on knowledge-based industries, these institutions contribute to a more experienced and educated workforce, a resource desirable in all cities. Furthermore, their economic activities foster an entrepreneurial spirit and attract additional economic growth.”

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    It’s that last part, the economic growth, that, in addition to jobs, has become intimately tied to the eds and meds sectors. In many places, including Philadelphia and Pittsburgh, the eds and meds institutions have transformed city neighborhoods through programs and investments in everything from schools, public safety, commercial districts, and homebuyer grants.

    What do eds and meds look like in Pa.?

    Eds and meds have flourished throughout Pennsylvania. In many urban areas around the Commonwealth the eds and meds sectors are some of the largest, if not the absolute largest, employers. Overall, eds and meds employs about 1.2 million people in just the private sector – nearly 20-percent of the commonwealth’s working population. That number has grown by 8.4 percent since 2007, the largest growth of any industry in the same time period. However, growth in the sector has slowed; in the past year in Pa., eds and meds hires in the private sector have gone up by 3 percent, with other sectors surpassing its addition of 2,400 new hires. 

    Still, eds and meds remain incredibly important to Pa. cities. See below for a breakdown of the largest employers in the Philadelphia, Pittsburgh, Harrisburg, and State College metro areas. We’ve highlighted the eds and meds employers.

    1 Federal government Federal government State government Pennsylvania State University
    2 City of Philadelphia UPMC Milton Hershey Medical Center State government
    3 University of Pennsylvania University of Pittsburgh Federal government Mount Nittany Medical Center
    4 School District of Philadelphia Giant Eagle Hershey Entertainment & Resorts State College Area School District
    5 State government State government Hershey Company Glenn O Hawbaker
    6 Children’s Hospital of Philadelphia Wal-Mart Pinnacle Health Hospitals Wal-Mart
    7 Giant Food Stores PNC Bank Giant Food Stores County of Centre
    8 Vanguard Group Western Penn Allegheny Health Highmark Health Services Weis Markets
    9 Merck Sharp & Dohme Corp. Allegheny County PHEAA Bellefonte Area School District
    10 United Parcel Service University of Pittsburgh Physicians Holy Spirit Hospital  Federal government

    [Source: The Center for Workforce Information and Analysis, Dec., 2013]

    Why don’t we just create more eds and meds to solve all our problems?

    Long seen as a savior, it turns out eds and meds have their problems, too. For one, the idea that eds and meds cannot be outsourced and will remain anchors in their host communities could be changing. Massive open online courses, or MOOCS, give students more flexibility to take classes at faraway prestigious institutions rather than at their local schools. Patients seeking medical services at large, cost-efficient hospitals throughout the country, or abroad, could also drive business away from local hospitals. Such developments could lead to clustering of a sector previously thought to be inherently tied to place. While MOOC users and an influx of patients, and the revenue associated with them, could be good for large eds and meds institutions, it could also mean a loss of funds for smaller, less distinguished institutions and their host cities.

    In addition, eds and meds are often non-profits, which exempts them from certain tax burdens, like property taxes. For cities, that means a reduced tax base. Some cities, like Pittsburgh, have asked universities and hospitals to contribute money in lieu of taxes. In Pittsburgh, the government and eds and meds institutions are still weighing their options, but such contributions are often less than regular taxation could bring in.

    Finally, while many have asked eds and meds institutions to leverage their economic power to push economic development, others have criticized them for not doing enough to improve their host communities, or not doing it well. For example, eds and meds entities have come under fire for importing personnel rather than training and hiring locally, for not being inclusive of their communities’ populations and driving out longtime residents as development thrived.

    Did this article answer all your questions about Pennsylvania’s “Eds and Meds”? If not, you can reach Irina Zhorov via email at izhorov@wesa.fm or through social media @zhorovir. Have a topic on which you’d like us to do an Explainer? Let us know in the comment section below, or on Twitter @PaCrossroads.

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