Margaret Bondoc, an intensivist who works in the intensive care unit at Methodist Dallas, wears requisite personal protective gear. Courtesy of Methodist Dallas

Health Systems

North Texas Healthcare Is a $52 Billion Economic Force

The region's wide-ranging healthcare industry represents about 15 percent of the local economy.

The healthcare industry in North Texas is diverse, growing, and innovative, and its economic impact is as varied as it is massive. Health systems, hospitals, outpatient clinics, real estate, pharmaceuticals, medical devices, health tech, insurance, and other subsectors represent about 15 percent of the regional economy—or $52 billion, according to the Dallas Regional Chamber. Despite the pandemic, area healthcare companies and nonprofits will continue to play a significant role in the economy.

EMPLOYMENT

Prior to the pandemic fallout, the Bureau of Labor Statistics reported that education and healthcare represented 475,000 employees in Dallas-Fort Worth, up from 350,000 in 2010. The growth rate for education and healthcare hovered around 4 percent before COVID-19. Healthcare practitioners (which doesn’t include social workers, community health workers, health educators, and support staff) represent the seventh-most populous industry with 676,860 workers in Texas. Healthcare practitioners have the highest median salary ($78,470) of all the top occupations. Health support professionals add 543,430 workers to the Texas economy.  

Hospitals in North Texas have a marked impact on the economy, too. In addition to jobs in hospitals, they create construction, consulting, real estate, and other positions. There are 90 hospital members in the Dallas-Fort Worth Hospital Council that have a $14 billion impact on the economy and add 265,000 jobs statewide. According to a 2017 report, member hospitals in the Dallas-Fort Worth Hospital Council accounted for 126,385 jobs in hospitals, 7,000 construction jobs, and 161,754 jobs created in other businesses. Member hospitals paid their employees $10.6 billion. They also paid $353.4 million for construction personnel and $7.5 billion in secondary labor costs. It all adds up to $18.4 billion in labor impact generated by hospitals in North Texas. 

“Because of all the companies that are located here, from name brands to other lesser-known companies, DFW is really strong,” says Duane Dankesreiter, senior vice president of research and innovation at the Dallas Regional Chamber. “Even though you often don’t hear about some corporations, they make products you use on a regular basis, and they are embedded into the fabric of healthcare across the region.” Additionally, healthcare is a job-creation machine, Dankesreiter says. “For every healthcare job, several jobs are multiplied around it, which is key for why healthcare is so important to the region.”

Of the 25 largest employers in North Texas, six are in the healthcare industry. Texas Health Resources (the fourth-largest, with 19,000 employees), Baylor Scott & White Health, UT Southwestern, Parkland Health and Hospital System, Medical City Healthcare, and Cook Children’s Hospital all take a spot on the list. North Texas is also home to drug distribution giant McKesson, the seventh-largest company in the country, with annual revenue of $208 billion.

INNOVATION

Healthcare has been a major driver of new devices, pharmaceuticals, and technology in the region. “DFW has established itself as a robust region that is innovating in the healthcare field,” says Dr. Hubert Zajicek, co-founder and CEO of Healthcare Wildcatters. “Our strengths are several strong hospital systems, a top-four metro area by population, continued strong growth of talent, and several rapidly growing universities.”

Based in downtown Dallas, Health Wildcatters is an accelerator that pairs cohorts of healthcare entrepreneurs with mentors and provides them with funding. The organization also hosts an annual competition where cohort members pitch in front of an audience of potential investors; since its founding in 2013, 68 accelerator graduates have raised $70 million in funding.  

In June, Dallas-based biotechnology company (and Health Wildcatters alum) Lantern Pharma raised $26 million in a public offering of its AI machine learning, which identifies patients who will benefit from targeted oncology therapies. Southlake’s Onconano, which was launched by UT Southwestern researchers, has won $31.4 million in funding from the Cancer Prevention and Research Institute of Texas for its work on the treatment of HPV.

DFW has had several recent healthcare innovation wins, including Vivify’s acquisition by Optum, Axxess Healthcare’s continued growth, and significant pharmaceutical growth with companies like ZS Pharma and Reata. “I think the fact that companies can grow here is not an outlier anymore, it is established,” Zajicek says. “The next question will be if we can retain companies during continuous growth after the respective acquisitions, or grow healthcare companies to Fortune 500-size.

“I believe we can now,” Zajicek continues. “Three of the Top 10 DFW-based companies are healthcare-related: McKesson, Tenet, and Kimberly-Clark. It signifies that we’re not talking about an aberration anymore, but rather a strong component of our regional ecosystem.”

Several companies have launched from the research hubs in Dallas-Fort Worth, such as Ampcare, which recently received FDA certification for its work in therapeutic neuromuscular electrical stimulation technology to help patients swallow. Allied Bioscience made waves by developing a product that kills the COVID-19 virus for up to three months on surfaces, which can be especially helpful for spaces that are difficult to clean in between use, such as school desks and airline seats.  

Product development also is strong in Fort Worth, which last year launched the iter8 Innovation Community, a medical innovation district in the heart of the city. The new live-work-play district is meant to connect entrepreneurs to the healthcare and biotech industries that already exist there.  

Many of the region’s largest healthcare employers are committing time and space to innovation, including Blue Cross Blue Shield’s C3 Innovation Lab in the West End District in downtown Dallas and Baylor Scott & White’s The Hive, which has worked to develop and improve the system’s top-rated MyBSWHealth app. Along Stemmons Freeway between the Medical District and Design District, J. Small Investments is collaborating with Lyda Hill Philanthropies to redevelop Pegasus Park, an expansive mixed-use project meant to boost local biotech initiatives. The 23-acre, 750,000 square-foot campus will include a 37,000 square-foot hub dedicated to life sciences innovation.

HOSPITALS AND HEALTH SYSTEMS

Several of the state and nation’s largest hospitals and health systems are based in Dallas-Fort Worth, even if not all of them have a large hospital presence in the area. Texas Health Resources has 29 hospitals in North Texas and a partnership with UT Southwestern. This gives THR’s community hospitals access to the expertise of the academic center while expanding UT Southwestern’s reach and influence in the region. 

Baylor Scott & White Health has 50 hospitals across the state and is Texas’ largest nonprofit system. In 2018, BSW nearly merged with Houston’s Memorial Hermann, which would have created one of the country’s largest nonprofit systems, but the two parties amicably backed out of the agreement last year.

The COVID-19 pandemic has led to unprecedented coordination between local health systems, as competitors have come together to help deal with the crisis. “While this pandemic is unprecedented, our hospital systems have learned much over the past few months.,” said DFW Hospital Council President Steve Love. “Coordinated efforts have allowed us to nimbly respond to this fluid situation. As leaders, we attest to and applaud the unwavering efforts of our workforce in caring for those with COVID-19 and those seeking care for other urgent medical needs.”

The region is also home to several hospital systems that don’t have major hospital facilities here. Tenet Healthcare Corp., which recently moved from downtown Dallas to a new headquarters in Farmers Branch, is a Fortune 500 company with more than 113,000 employees, 65 acute care and specialty hospitals, and 490 outpatient locations stretching from California to Florida. Christus Health is based in Irving, but most of its 60 hospitals are in East and South Texas, with other facilities in New Mexico and Mexico. Steward Health also is based in Dallas, having moved its headquarters here from Boston in 2018. It has 35 community hospitals in nine states and Malta, making it the largest private, for-profit hospital operator in the country.

EDUCATION AND RESEARCH

The impact of healthcare in North Texas owes a great deal to the numerous academic institutions that help supply the region with innovation, research, practitioners, and support professionals. Texas Christian University and The University of North Texas Health Science Center partnered to form North Texas’ newest medical school. The TCU and UNTHSC School of Medicine is taking a unique approach to medical education, focusing on integrating classroom learning with the clinical space, building up a corps of primary care physicians to help with the impending physician shortage, and developing empathetic graduates. UT Arlington is one of the nation’s largest producers of nursing graduates, with nearly 25,000 enrollees in the School of Nursing and Innovation in 2018. UT Dallas has created a pipeline of graduates to help run the healthcare industry’s business side, with both bachelor’s and master’s degrees in healthcare management. In Fort Worth, the Texas College of Osteopathic Medicine at UNT’s Health Science Center graduates the second most primary care physicians in the country.

The education and research anchor of the region is UT Southwestern Medical School, which has graduated 11,500 physicians since its founding in 1943 and brings in $469.5 million in research funding each year. The faculty includes four Nobel Prize winners in physiology, medicine, and chemistry. UTSW also hosts an “Innovation Tank” program, where physicians present ideas to improve care as they compete for $10,000 and institutional support.

MANUFACTURING

DFW is home to numerous manufacturers that supply the healthcare industry with the products they need. They include Kimberly-Clark, an $18.5 billion Fortune 500 company that makes protective gowns, cleansers, and gloves. It’s also a consumer force; about 25 percent of the world’s population uses one of its products every day.

Prestige Ameritech, the largest domestic surgical mask manufacturer in the nation, is based in North Texas. When the state and the Texas Military Department partnered with Prestige in early April, the North Richland Hills company was partially staffed by Texas National Guard members to enable 24-hour production, making about two million masks per week. The company’s 220,000-square-foot manufacturing facility produces masks and other medical products, such as N95 respirators, medical face shields, goggles, and gowns, and automated machinery that produces the masks.    

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