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Rural Health Information Hub

About the Economic Impact Analysis Tool

What is an Economic Impact Analysis and how is it useful?

The EIA Tool tracks your program dollars as they flow through the local community, adding up jobs created, spending supporting local business and taxes, new or expanded healthcare services and their impact on the well-being of the population. Essentially the tool translates project-specific impacts into community-wide effects

The EIA Tool can be used by grantees and the Federal Office of Rural Health Policy (FORHP) in several ways:

  • For planning purposes, to understand the timing and extent of program impacts in the community
  • By grantees in demonstrating value to the community and in advocating for additional local support
  • By HRSA and grantees in benchmarking grantee performance against expected norms
  • As a tool for identifying high-performing grantees and understanding best practices and environmental factors that contribute to greater community impact.

For a government agency such as FORHP, the Economic Impact Analysis Tool shows the return on public investment, including:

  • Direct impacts. Measured by grant-related purchases made in the community and the number of jobs generated by grantee activities (such as, wages, salaries and benefits paid directly to grant-supported employees)
  • Indirect impacts. Spending that occurs when the firms that sell goods and services to the grantee spend locally, making purchases and hiring workers to meet demand caused by the grantee’s spending
  • Induced impacts. Occur when employees of the grantee and of firms that sell goods and services to the grantees in turn spend their earnings on local goods and services

What information does the EIA Tool use to calculate economic impact?

In conjunction with the spending and program information you provide, the EIA Tool uses several sources to calculate the impact of your project's spending.

Scenarios created on or after January 8, 2018 use:

Scenarios created before January 8, 2018 use:

  • RIMS II 1997/2006 multipliers
  • U.S. Census Bureau State Interim Population Projections based on Census 2000 data and projections through 2030
  • 1997 North American Industry Classification Codes

Bureau of Economic Analysis Multipliers

In simplest terms, the economic impact of a program is captured in the program multiplier, or the number of dollars of economic activity created by one dollar of spending in a community.

Multipliers can range from zero to over 10, and vary depending on size of the community, type of purchases made, and the community’s economic base. Typically, large multipliers are observed when a dollar spent by a grantee stays in the community and supports other local businesses, which in turn pay their employees who, in turn, buy more local goods and services. Lower multipliers occur when grantee funds are spent outside the community or for goods or services that support fewer local jobs.

Bureau of Economic Analysis (BEA) Regional Input-Output Modeling System (RIMS II) multipliers are used in this tool to estimate economic impact. These multipliers estimate the impact from changes in final demand on one or more regional industries in terms of output, employment, and labor earnings. The multipliers are based on estimates of a local area’s personal income and the national input-output (I-O) accounts. This tool uses the “Final-demand Output” RIMS II multipliers.

The Economic Impact Analysis Tool uses one of three methods to calculate results, using economic multipliers developed by the BEA:

  1. The grantee serves the entire state, and the tool uses pre-loaded state-level multipliers.
  2. The grantee serves a portion of the state and the tool estimates multipliers, based on the size of the population served.
  3. The grantee serves a portion of a state and has purchased multipliers from the BEA for a custom area. The grantee must enter these specific custom multiplier values. To purchase custom multipliers, see the BEA's RIMS II site.

Industry Codes

Industries chosen for the tool are those used most often by HRSA grant recipients. Some Industry Codes may not fully explain activities classified in that industry. If none of the industry codes directly apply to your item, use the closest matching category based on these definitions.

Code Industry Description
541200 Accounting Services Accounting, bookkeeping, and related audit services, including data processing and tabulation. Example: Hiring an accountant.
541800 Advertising Services Prepare advertising (copy, artwork, graphics, other creative work) and placement of advertising in various mediums; operate on a contract or fee basis. Example: Newspaper advertisements.
32311 Commercial Printing Lithographic, offset, photo-offset, and photolithography services. Most services performed on a job or custom basis. Example: Printed educational materials.
541511 Computer Programming Programming services on a contract or fee basis. Other services may include software design and analysis, software modification and training for software use. Example: Financial software solution.
541512 Computer Systems Design Develop or modify software and packaging, or bundle software with purchased computer hardware to create integrated systems for specific applications. Firm must provide development or modification of software; marketing of purchased computer hardware; involvement in all system development. Example: Building a computer network.
611B00 Educational Services Offer educational courses or services not classified elsewhere. Examples: Training, scholarships, curriculum development, and vocational counseling (does not include rehabilitation counseling).
622110 Inpatient Hospital General medical and surgical hospitals. Provide diagnostic and medical treatment to inpatients with a variety of medical conditions. Maintain inpatient beds and provide food services to meet patient nutritional requirements. Example: Diagnostic X-rays, clinical laboratory services, outpatient services.
621500 Labs, Diagnostic Testing Permanent facilities engaged in specialized outpatient care with medical staff to provide diagnosis, treatment, or both for ambulatory patients who do not require inpatient care. Includes outpatient clinics and services such as alcohol treatment, family planning, drug treatment, rehabilitation centers. Examples: Dietitian, mobile clinic, health risk assessment.
541100 Legal Services Legal advice and /or legal services. Example: Hiring an attorney.
541610 Mgt Consulting Management, strategic and organizational planning; financial and budget planning; marketing objectives and policies; information systems planning; human resources policies and practices planning. Examples: Strategic planning services; business planning; technical assessment; research.
623110 Nursing Homes Primarily engaged in providing inpatient nursing and rehabilitative services. Provide care for an extended time periods to people requiring nursing care. Examples: Nursing, continuous personal care, daily living assistance.
561100 Office Administrative Services Furnish general or specialized management services on a day-to-day basis; operate on a contract or fee basis. Examples: Administrative assistant; project director; grant coordinator.
621100 Physician, Other Provider Offices Establishments and staff or licensed practitioners with M.D. degrees, and practicing general or specialized medicine and surgery. Physician clinics are included. Example: Medical director, RN/LPN, pharmacy technician.
4A0000 Retail Trade Provide sales of retail merchandise, and rendering services incidental to those sales. Example: Purchased goods such as computers and office supplies.