Study projects a $1.08B potential by 2027 with 600 more physicians in the area.
While the Arkansas Colleges of Health Education in Fort Smith’s Chaffee Crossing has a mission to improve the health of people in the area, it also will have a significant economic impact.
Tuesday at the Fort Smith Board of Directors meeting, Arkansas Colleges of Health Education President and CEO Kyle Parker revealed a new economic impact study conducted over the past eight months by HISTECON Associates and the University of Arkansas at Little Rock Economic Development Institute that shows an estimated $415 million impact over the next four years from the medical college through payroll, construction projects, multiplier effects and $46 million in physician student spending.
Physician students who go on to start primary care medical practices in the area will increase that economic impact exponentially. Starting in 2024, each new graduate from the medical college who enters primary care will generate about $1.8 million in salaries, equipment, supplies and other expenses, according to a study by the National Center for Rural Health Works. Fort Smith alone has a physician shortage of 258, Parker noted.
In a segment of the economic impact study called “The Community Challenge,” it shows if the Fort Smith area is able to retain the primary care physicians once they graduate there is potential for a $1.08 billion annual economic impact by the year 2027 with 600 new physicians practicing.
"I'll take half of that all day long," Parker said.
The college president also told the board of one physician student going to buy groceries while wearing an ARCOM (Arkansas College of Osteopathic Medicine) T-shirt. A woman behind the student bought his groceries after learning he was studying at the medical college.
“We have these students in Fort Smith for seven years,” Parker said. “If we can’t convince them to stay in seven years we’re doing something wrong.”
According to a review by U.S. News and World Report, Arkansas ranks 50th in the nation for overall health care and health care quality, as well as 38th in health care and 48th in public health.
Four areas of economic impact that the study looked at include payroll and operations, current and future construction projects, student and faculty spending, and visitor spending. The study, which cost $16,000, was sponsored by the college's financing partners Arvest Bank and First National Bank.
In the fall of 2017, there were 93 full- and part-time employees with Arkansas Colleges of Health Education making a payroll of approximately $10.7 million.
Construction costs over the course of 2017-23 will total more than $63 million, with about 366 full and part-time jobs tallying up almost $14.3 million in payroll, the study adds. By 2022, the total impact on the Fort Smith metropolitan statistical area will create 371 jobs, the study adds.
A groundbreaking was held in May for the $25 million addition of the Arkansas College of Health Science.
“Both indirect and income-induced jobs create secondary sources of employment,” the study noted.
Employment from industries that supply ACHE’s mission are coupled with the creation of a new demand for products and services induced by the increased income in the area, the study explained.
Spending and respending of new direct and indirect income is also expected to radiate to other neighboring markets and remain in the Fort Smith area. Student spending is expected to grow from about $4 million currently to more than $13 million when full enrollment occurs in 2021.
Not included in the economic impact study, Parker said, are tallies on the 25 new jobs recently announced that will increase annual payroll to $14 million. The institution will create 30 new jobs by the end of 2020.
The study also does not include the $3 million construction of Celebration Park or the construction of Heritage Village, an 84,000-square-foot project beginning this month with 28,000-square-foot of retail space across the road from the medical colleges.
“We’re about mission, we’re not about money, we’re trying to serve the underserved ... help those who are less fortunate, and try to be able to get a hold of health care professionals,” Parker said. “But I also realize the world works on money. So, you’re looking at what kind of impact this has made on the benefit of Fort Smith and the surrounding region.”
The city board waived a $35,000 fee to construct the Arkansas College of Osteopathic Medicine in 2016. Parker said he thought it was a “good investment” on the city’s part. The Fort Chaffee Redevelopment Authority donated 200 acres of land in 2014. The 102,000-square-foot, $32.4 million building had its “topping off” ceremony on June 11, 2015, following three months of foundation and steel beam work.
The Arkansas Colleges of Health Education also plans to develop a 228-acre neighborhood with the help of Fort Smith, Barling and the Fort Chaffee Redevelopment Authority. The neighborhood is planned to have 30 categories of retail such as grocery stores, apparel stores and home furnishings, and 10 restaurants — altogether expected to generate $25.9 million in taxable sales.
Within the next 10-15 years, 1,900 housing units are planned for the neighborhood, including 1,020 single-family detached homes, 625 multi-family homes for rent, 215 single-family attached homes and 125 multi-family homes for sale.