The University of Michigan’s first female executive vice president for Medical Affairs and CEO of the Health System, Dr. Ora Pescovitz, recently took the time to sit down with Ann Arbor SPARK’s CEO Paul Krutko for a CEO Podcast: Conversations on Economic Opportunity.
During the course of her conversation with Krutko, Dr. Pescovitz discusses many of the exciting new projects she is working on with the U-M Health System. They discuss the economic impact the U-M Health System has on the broader Ann Arbor economy, how important to innovation and growth the North Central Research Campus is, and ways that SPARK and the Health System both help the regional economy grow.
Paul: The University of Michigan Health System is really a major economic force in the Ann Arbor area. Can you scale the system in perspective for our audience? How does it compare to other systems around the U.S. and the world?
Ora: It’s really one of the largest academic medical centers in the country. We have an annual operating budget of more than $3 billion. That includes three hospitals and more than 120 clinics that we have throughout Michigan and northern Ohio. I think that you know we’re home to a world renowned medical school and clinical services. Those clinical services are actual home to the nation’s sixth highest ranked School of Nursing and recently our medical school was ranked sixth by the National Institutes of Health as well.
The majority of our budget actually goes to pay salaries and benefits. We employ 22,000 people in the health system, so it’s really enormous. In return, one of the reasons why we are an economic source is because those salaries pay taxes. We pay taxes mostly here in the metropolitan Detroit and Ann Arbor area. You might not know that the University of Michigan is the fifth largest employer in the state, and we’re the third largest employer in the metropolitan Detroit area. SO, it’s a force. We’re about half of the University of Michigan, whether you look at it in terms of the number of employees, whether you look at it from the perspective of the geographic footprint, the size that we take up, or if you look at it in terms of the revenue that we produce. Another way to think about it is the impact that we have on the local economy because of the spending that is done by the millions of people that come to our health system each year. We have patients that come here, we have family members, we have visitors, we have lecturers and we have prospective students. The traffic that comes through this place is enormous. I know everybody knows about the football stadium and the traffic that comes to Ann Arbor because of football, but there’s a whole lot of traffic that comes here to Ann Arbor because of the Health System.
Paul: That’s six, this year is eight times. What you’re talking about is a daily influx of people coming here, and I also think that you’ve put your finger on a number of the other things. You’re a huge buyer of goods and services in the marketplace. It’s not only the direct salaries that come with your employees and then how they spend in the regional economy, but also you’re buying goods and services everyday. So that has a significant impact on the economy as well.
To listen to the full podcast, please follow this link: http://www.annarborusa.org/uploads/podcasts/Ora%20Pescovitz.mp3