tennessee’s healthcare and medical devices cluster · tennessee’s healthcare and medical...

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TENNESSEE’S HEALTHCARE AND MEDICAL

DEVICES CLUSTER

Prepared by:

Published June 2015

HEALTH CARE AND MEDICAL DEVICES INDUSTRY

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The future of health and medicine is being shaped in Tennessee, where the state’s health care and medical devices cluster is engaged in everything from producing surgical tools to manufacturing pharmaceuticals to researching new nutritional supplements.

Overall, the sector employs more than 335,000 workers at 12,321 establishments in the state, many of them leading-edge biotechnology companies. Employment in the sector grew 5.1 percent in the state between 2010 and 2014.

The scope of Tennessee’s healthcare and medical devices industry is underscored by the presence of corporate headquarters for major national and international hospital companies, such as HCA, Community Health Systems and Brookdale Senior Living. Medical device manufacturers including DeRoyal Industries, Medtronic Sofamor Danek, MicroPort Orthopedics and Smith & Nephew, and pharmaceutical companies including Bayer also have a major presence in the state.

Tennessee has a greater employment concentration for the health care and medical devices sector compared to both the Southeast and nation. The Memphis region has one of the nation’s highest concentrations of medical device manufacturing, and overall medical equipment and supplies manufacturing employs 8,422 workers in the state. Pharmaceutical and medicine manufacturing is another key component of the sector, employing 1,885 workers. Tennessee’s exports of pharmaceuticals and medicine reached $596 million in 2014, up 38.5 percent from 2010.

HCA pioneered the for-profit

hospital concept in Tennessee in the late 1960s and was a catalyst for creating an industry in Nashville that today numbers more than 250 healthcare companies, many with operations around the world.

The state’s health care and medical devices sector is supported by world-class research capabilities, including the University of Tennessee, Oak Ridge National Laboratory (ORNL), Vanderbilt University and St. Jude Children’s Hospital. ORNL researchers, for example, have worked with DeRoyal on the use of additive manufacturing in creating and producing orthopedic implant-related products.

The health care and medical devices sector continues to generate significant investment in Tennessee, with 51 project commitments made since Gov. Bill Haslam took office in January 2011. In May 2015, Community Health Systems, a hospital company based in Williamson County, announced plans for a $66 million shared services operation in Nashville to serve its network of 199 affiliated hospitals in 29 states, creating 1,500 jobs.

ProNova Solutions, which is

developing proton therapy technology for use in cancer treatment, moved into a new facility in Blount County in 2014, part of a planned $52.8 million development expected to create 525 jobs. In Knoxville, Fresenius Medical Care announced in 2014 that it would build its East Coast manufacturing facility in Knoxville, a $140 million investment expected to create 665 jobs.

Fresenius, based in Germany, is one of 38 foreign-owned companies in the healthcare and medical devices sector with operations in the state. Combined, those companies employ 6,900 workers and have invested more than $604 million in Tennessee.

The sector is aided by a superior transportation and logistics infrastructure in the state, including the presence of the FedEx Express World Hub at the Memphis International Airport, the world’s second-largest cargo facility.

The FedEx hub enables device makers, pharmaceutical companies and other manufacturers to take orders late into the evening for next-day service and deliver products to customers without stockpiling inventory.

OVERVIEW


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MAJOR TN HEALTH CARE AND MEDICAL DEVICES EMPLOYERS

1. 2. 3. 4. 5.COMMUNITY HEALTH SYSTEMS Statewide

DEROYAL INDUSTRIES INC. Powell

HEALTHCARE CORPORATION OF AMERICA (HCA) Statewide

LEBONHEUR CHILDREN’S HOSPITAL Memphis

LIFEPOINT HOSPITALS INC. Brentwood

6. 7. 8. 9. 10.MEDTRONIC SOFAMOR DANEK USA INC. Memphis

MICROPORT ORTHOPEDICS INC. Arlington

SMITH & NEPHEW INC. Memphis

ST. JUDE CHILDREN’S HOSPITAL Memphis

VANDERBILT HOSPITAL. Nashville

TOP 10 INDUSTRIES IN TENNESSEE’S HEALTH CARE AND MEDICAL DEVICES CLUSTER BY EMPLOYMENT (2014)Industry/NAICS/Employment

General Medical and Surgical Hospitals/622110/98,973

Offices of Physicians (except Mental Health Specialists)/621111/59,527

Nursing Care Facilities (Skilled Nursing Facilities)/623110/33,956

Home Health Care Services/621610/17,650

Offices of Dentists/621210/15,910

Research and Development in the Physical, Engineering and Life Sciences (except Biotechnology)/541712/7,571

Offices of Physical, Occupational and Speech Therapists, and Audiologists/621340/7,527

Residential Intellectual and Developmental Disability Facilities/623210/7,474

Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers/423450/7,320

Outpatient Mental Health and Substance Abuse Centers/621420/7,240

Source: Tennessee Department of Economic and Community Development

Source: EMSI


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Industry NAICS Code Employment Establishments Avg. Hourly Wages

Ambulatory Health Care Services 621 139,694 10,005 $28.39

Hospitals 622 102,121 160 $26.21

Nursing and Residential Care Facilities 623 60,614 989 $13.49

Medical Equipment and Supplies Manufacturing 3391 8,422 221 $38.42

Research and Development in the Physical, Engineering and Life Sciences 54171 7,963 228 $45.51

Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers 423450 7,320 397 $33.78

Drugs and Druggists’ Sundries Merchant Wholesalers 424210 6,543 Nashville $42.08

Pharmaceutical and Medicine Manufacturing 3254 1885 219 $41.27

Home Health Equipment Rental 532291 913 32 $21.27

Electromedical and Electrotherapeutic Apparatus Manufacturing 334510 549 100 $50.11

Ophthalmic Goods Merchant Wholesalers 423460 208 12 $23.40

Irradiation Apparatus Manufacturing 334517 97 8 $30.47

Analytical Laboratory Instrument Manufacturing 334516 85 5 $36.02

Totals for Sector 335,109 12,321 $26.17

TENNESSEE’S HEALTH CARE AND MEDICAL DEVICES CLUSTER (2014)

Source: EMSI


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NAICS Industry Employment LQ*

339113 Surgical Appliance and Supplies Manufacturing 6,672 3.21

423450 Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers 7,320 1.90

621420 Outpatient Mental Health and Substance Abuse Centers 7,240 1.76

424210 Drugs and Druggists’ Sundries Merchant Wholesalers 6,543 1.73

621492 Kidney Dialysis Centers 3,771 1.67

621999 All Other Miscellaneous Ambulatory Health Care Services 1,305 1.46

621991 Blood and Organ Banks 2,044 1.46

621511 Medical Laboratories 5,021 1.39

623220 Residential Mental Health and Substance Abuse Facilities 5,777 1.36

622210 Psychiatric and Substance Abuse Hospitals 2,772 1.31

TOP 10 INDUSTRIES BY LOCATION QUOTIENT (2014)Tennessee has a greater employment concentration for the health care and medical devices sector compared to both the Southeast and nation. This is demonstrated by the industry’s location quotient (LQ)* in Tennessee.

*Location Quotient is a ratio of an area’s employment in an industry to that of the nation as a whole. LQ is a measure for quantifying how concentrated an industry is in a region as compared to the national average. An LQ greater than 1.0 shows an industry composes a greater share of the local employment than the national average. Source: EMSI

335,100Tennesseans employed in the

health care and medical devices

sector

5.1%Increase in employment in

the sector from

2010 to 2014

12,321Establishments across the state

involved in the sector

38Foreign-based companies in the

health care and medical device

cluster, that combined employ

over 6,900 workers

$596 millionExports of pharmaceuticals

and medicine from Tennessee in

2014

No. 1Tennessee’s rank among states on

Medscape’s Places to Practice list

for 2015

BY THE NUMBERS


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A. HCA HOLDINGS INC.Headquarters: NashvilleEmployment: 225,000

B. COMMUNITY HEALTH SYSTEMS INC.Headquarters: FranklinEmployment: 167,000

C. BROOKDALE SENIOR LIVINGHeadquarters: BrentwoodEmployment: 82,000

D. LIFEPOINT HOSPITALS INC.Headquarters: BrentwoodEmployment: 38,000

E. LIFE CARE CENTERS OF AMERICA INC.Headquarters: ClevelandEmployment: 29,000

F. ACADIA HEALTHCARE COMPANY INC.Headquarters: FranklinEmployment: 15,500

G. NATIONAL HEALTHCARE CORPORATIONHeadquarters: MurfreesboroEmployment: 13,050

H. IASIS HEALTHCARE LLCHeadquarters: FranklinEmployment: 12,395

I. METHODIST LE BONHEUR HEALTHCAREHeadquarters: MemphisEmployment: 11,459

J. AMSURG CORP.Headquarters: NashvilleEmployment: 10,500

K. BAPTIST MEMORIAL HEALTH CARE CORPORATIONHeadquarters: MemphisEmployment: 9,877

L. METHODIST HEALTHCARE MEMPHIS Headquarters: MemphisEmployment: 7,000

M. ACCREDO HEALTH INC.Headquarters: MemphisEmployment: 6,530

N. WELLMONT HEALTH SYSTEMHeadquarters: KingsportEmployment: 6,114

O. CAPELLA HEALTHCARE INC.Headquarters: FranklinEmployment: 6,000

TENNESSEE’S EDUCATION ADVANTAGE

HEADQUARTERS AND CORPORATE-WIDE EMPLOYMENT

A

B

F

H

OI

N

J

DC

K

LM

G

E

Source: TNECD and Hoover’s (D&B)

88.0%a growth rate

of 1.7% in five years

Tennesseans (age 25-64

years) with a high school diploma or equivalent

26.3%a growth rate

of 7.6% in five years

Tennesseans (age 25-64

years) with a bachelor’s degree or

higher

31%5-year growth

rate

STEM and STEM-related completions at Tennessee institutions

◆ Tennessee ranks in the Top 15 nationally for the growth rate in educational attainment of its working age population (ages 25 to 64 ) over the time period of 2008-2013.

◆ STEM and STEM-related completions at Tennessee institutions totaled approximately 28,800 in 2013

Sources: EMSI and the U.S. Census Bureau


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SOC Code Occupation Employment

11-1000 Top Executives 52,404

11-3000 Operations Specialties Managers 39,093

11-9000 Other Management Occupations 47,727

13-1000 Business Operations Specialists 62,915

15-1100 Computer Occupations 47,404

17-2000 Engineers 27,170

21-1000 Counselors, Social Workers, and Other Community and Social Service Specialists 28,016

29-1000 Health Diagnosing and Treating Practitioners 102,954

29-2000 Health Technologists and Technicians 77,813

29-9000 Other Health Care Practitioners and Technical Occupations 5,338

31-1000 Nursing, Psychiatric, and Home Health Aides 44,641

31-2000 Occupational Therapy and Physical Therapist Assistants and Aides 4,032

31-9000 Other Health Care Support Occupations 30,085

35-2000 Cooks and Food Preparation Workers 75,969

35-3000 Food and Beverage Serving Workers 130,155

37-2000 Building Cleaning and Pest Control Workers 65,627

39-9000 Other Personal Care and Service Workers 49,542

43-1000 Supervisors of Office and Administrative Support Workers 29,758

43-3000 Financial Clerks 71,105

43-4000 Information and Record Clerks 110,141

43-5000 Material Recording, Scheduling, Dispatching, and Distributing Workers 97,732

43-6000 Secretaries and Administrative Assistants 64,765

43-9000 Other Office and Administrative Support Workers 73,285

49-9000 Other Installation, Maintenance, and Repair Occupations 63,221

51-2000 Assemblers and Fabricators 65,578

51-9000 Other Production Occupations 73,779

TOP OCCUPATIONS FOR THE HEALTH CARE AND MEDICAL DEVICES SECTOR (2014)Tennessee has a large, experienced workforce capable of operating in this sector.


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Company Job Commitments Capital Investment ($) County Date

Community Health Systems Inc. 1,500 66,000,000 Williamson May 2015

Parallon Business Solutions, LLC 800 87,600,000 Davidson September 2012

Fresenius Medical Care 665 140,000,000 Knox March 2014

CGS Administrators, LLC 527 5,600,000 Davidson January 2015

Pronova Solutions, LLC 525 52,834,167 Blount February 2013

New Breed Logistics Inc. 468 23,000,000 Shelby January 2013

Apria Healthcare 412 5,900,000 Madison January 2011

Enovate Medical 410 13,123,000 Rutherford April 2014

Integrity Nutraceuticals International 347 14,500,000 Maury October 2014

Windsor Health Group 275 11,500,000 Davidson September 2011

Aegis Sciences Corporation 271 20,433,000 Davidson June 2012

PharMEDium Services LLC 250 3,398,000 Shelby March 2011

Xtend Healthcare Inc. 220 1,398,870 Davidson June 2014

HCA, Inc. 210 259,600,000 Davidson February 2012

Sarah Cannon Research Institute 200 37,500,000 Davidson September 2012

MAJOR PROJECTSDuring Gov. Bill Haslam’s administration, the Tennessee Department of Economic and Community Development has received 51 project commitments in the Health Care and Medical Devices sector to create 9,558 jobs, with capital investment totaling $1.17 billion (Jan. 2011-May 2015)

51Project commitments

9,558Jobs created

$1.17 BTotal capital investment

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HIGHER EDUCATION: RELATED PROGRAMS IN TENNESSEE FOR THE HEALTH CARE AND MEDICAL DEVICES SECTOR (2013)

Program Completions # Institutions Top Institution by Completions

Accounting 1,215 55 The University of Tennessee-Knoxville

Business Administration and Management, General 4,843 127 The University of Tennessee-Chattanooga

Business Operations Support and Secretarial Services, Other 658 48

Business/Commerce, General 866 34 Bethel University

Child Development 446 36 Nashville State Community College

Dental Assisting/Assistant 480 32 Concorde Career College-Memphis

Education, General 706 31 Bethel University

Emergency Medical Technology/ Technician (EMT Paramedic) 574 20 Volunteer State Community College

English Language and Literature, General 1,087 56 Walters State Community College

Finance, General 512 22 The University of Tennessee-Knoxville

Health and Physical Education/ Fitness, General 643 29 East Tennessee State University

Health Services/Allied Health/ Health Sciences, General 425 14 Walters State Community College

Kinesiology and Exercise Science 623 24 The University of Tennessee-Knoxville

Liberal Arts and Sciences/Liberal Studies 7,876 56 Walters State Community College

Licensed Practical/ Vocational Nurse Training 1,456 39

Marketing/Marketing Management, General 661 30 The University of Tennessee-Knoxville

Medical/Clinical Assistant 1,797 45 Concorde Career College-Memphis

Medicine 421 4 The University of Tennessee-Knoxville

Organizational Leadership 385 5 Bethel University

Pharmacy 405 5 The University of Tennessee-Knoxville

Pharmacy Technician/Assistant 509 38 Concorde Career College-Memphis

Psychology, General 2,044 55 The University of Tennessee-Knoxville

Registered Nursing/Registered Nurse 4,795 60 East Tennessee State University

Social Work 865 28 The University of Tennessee-Knoxville

Surgical Technology/Technologist 446 29 Meridian Institute of Surgical Assisting

Source: EMSI and the National Center for Education Statistics

Tennessee College of Applied Technology-Elizabethton

Tennessee College of Applied Technology-Jackson

tennessee’s healthcare and medical devices cluster · tennessee’s healthcare and medical...

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