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Victorian Heart Hospital Economic Impact Assessment

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Victorian Heart Hospital Economic Impact Assessment Victorian Heart Hospital Economic Impact Assessment Final Report 29/05/2017 Note: This pack should be read in conjunction with the accompanying methodology pack Document 7 This project seeks to articulate the economic value of the VHH to Victoria Monash University, in conjunction with Monash Health and the Department of Health and Human Services (DHHS) are working to develop the Victorian Heart Hospital (VHH). The VHH scheduled to commence operations in 2021 will be a world class hospital, research and education facility dedicated to specialised clinical care of heart related conditions, located on the Clayton campus and be the first of its kind in Australia. The project partners have launched a project to develop a narrative on the VHH’s value to Victoria and the community, to be used in potential public communications for the VHH. Objectives of this project: • Develop a narrative for VHH’s economic impact to the Victorian economy • Establish and calculate available metrics to quantify VHH’s economic impact • Articulate VHH’s value as a series of ‘supporting statements’ to be used in public communications where appropriate This project seeks to articulate the VHH’s economic impact for Victoria through a series of key messages to communicate to the community the value of the VHH to Victoria 1 Document 7 The VHH will be a valuable part of the Victorian economy, and a key driver of industry and research activity Report Contents PAGE: 7 PAGE: 11 The VHH will deliver significant The VHH will deliver improved economic benefits to Victoria outcomes and experiences for cardiac patients . The VHH is expected to contribute nearly $400m in 2026 . The VHH will improve the health outcomes for cardiac (calendar year) directly to the Victorian economy patients . The VHH will be a major employer in the South East of . The VHH will decrease the fragmentation of the State Melbourne cardiac care system and improve patient experience . The VHH will attract significant research funding PAGE: 15 PAGE: 20 VHH will grow specialist education, research and Construction of the VHH will innovation in Victoria generate significant economic benefits for . The VHH will undertake world leading clinical research and Victoria inform global best practice . The project will cost over $571m, with the hospital . The VHH will be a leading provider of cardiac specific expected to open in 2021 training for students and professionals . The construction of the VHH will directly create more than . The VHH will develop new medtech and pharmaceutical 1,700 local jobs products for the prevention and treatment of CVD 2 Document 7 The Victorian Heart Hospital will be the first of its kind in Australia The Victorian Heart Hospital (VHH) will be Australia’s first dedicated, integrated specialist Project cardiovascular hospital that will improve the lives of individuals at risk of, or diagnosed with, cardiovascular disease (CVD). The VHH will integrate clinical care, research, training and education to Overview improve patient experiences and outcomes, accelerate cardiac research and advance and upskill the current and future medical workforce. Key project facts • The VHH will be located on the Monash University Clayton campus adjacent to Blackburn Road, which presents a number of key benefits: • Enhanced access to Monash University academic staff with closely linked research and education activities • Access to world-class infrastructure in the immediate surrounding area • The purpose-built VHH will include: • A Cardiac Emergency Department • Cardiac catheterisation laboratories • Specialist cardiac surgical and imaging facilities • Cardiovascular tele-health services Partners and roles • The VHH, once fully operational will have 204 beds • The VHH will have the capacity to: • Undertake 2,000 cardiac surgical procedure p.a. • Undertake 13,500 cardiac catheterisation laboratory procedures p.a. Policy and capital Clinical and translational Training, education • Undertake 108,000 consultations p.a. delivery partner research partner and research partner Source: The Victorian Hear Hospital Full Business Case, DHHS, December 2016 3 Document 7 VHH will complement existing business and research activity in the Monash Cluster Monash National Employment and Innovation Cluster Key attributes of the Monash Cluster • The Monash Cluster has a critical mass of leading education, health and research facilities • Key metrics of the cluster, include: VHH site • Employs 82,000 people • Home to over 12,000 businesses • Represents 3.4% of jobs in Victoria • It includes business, commercial, industrial and employment areas within Clayton, Clayton South, Huntingdale, Monash University, Mulgrave, Notting Hill and Springvale • Prominent Monash Cluster occupants include: • Australia’s largest university, Monash University • Monash Medical Centre • Monash Children’s Hospital • the Australian Synchrotron • CSIRO’s largest site in Victoria • the Melbourne Centre for Nanofabrication • Monash Enterprise Centre The VHH will leverage the facilities and capabilities that exist within the Cluster, foster great economic activity Source: Plan Melbourne 2017-2050, Victorian Planning Authority; Monash Economic Value Assessment: Articulating the economic value of the Clayton Cluster, SPP March 2017 4 Document 7 VHH delivers benefits in four broad areas Ongoing impacts The cardiovascular care at the VHH VHH will deliver will improve patient outcomes, through co-location of leading improved outcomes cardiovascular care, research and and experience for training. The VHH will improve the The VHH project will have a cardiac patients experience of patients being treated major economic impact on VHH will deliver for cardiovascular disease. Victoria. The economic impact of significant economic the hospital is achieved through benefits to Victoria employment, procurement, research and teaching activity VHH will grow specialist The VHH partnership and situation at Monash University Clayton will education, research support the development of world and innovation in class research, training and Victoria education programs within the VHH. Construction impacts Construction of the VHH will generate The VHH will be a major infrastructure project for the Monash Cluster. The capital investment in the significant economic construction of the hospital will result in the creation of thousands of direct and indirect jobs. benefits for Victoria 5 Document 7 This project has used specific methodologies and a number of assumptions to calculate the impact of VHH to Victoria Methodology for the calculation of the economic impact of the Methodology for articulating hospital, includes: additional metrics, includes any of • Clinical (Monash Health) • Collation of existing metrics from internal Clinical salary expenditure business cases for Monash University, impact • Clinical procurement Monash Health and the Department of • Retail sales Health and Human Services • Medical tourism • Leveraged previous ratios and • Research (Monash proportions for metrics to calculate the VHH’s Research University) salary future value of components of economic impact on impact expenditure and jobs impact GDP • Research procurement • Extraction of metrics from the new model • Research tenants rental of care income • Teaching income • Estimation of metrics by relevant internal Teaching • Professional development stakeholders, informed by previous impact income experience • Economic impact of international students Key assumptions for this project: • All metrics (unless otherwise stated) show the impact of the entire hospital, not the marginal benefit compared with existing operations, with all metrics considered at a Victorian scale only • The metrics will only show the direct impacts of the hospital rather than any indirect impacts. The assumption is that the project is fully funded and construction as outlined in the DHHS business case by 2021 • All metrics (unless otherwise stated) are for year 5 of operation, expressed in 2026 dollar terms, with VHH assumed to be fully operational by 2026 across both clinical care, research and teaching areas of the hospital • It is assumed that the VHH will service at least 80% of the catchment area, increased from the current 60% of public patients 6 Document 7 VHH will deliver significant economic benefits to Victoria Document 7 The VHH will generate almost $400m in economic activity for Victoria in 2026 Components of the VHH’s economic impact: Clinical Procurement $178m Clinical Payroll $102m ~$398m Teaching Research $53m $59m Retail sales ($4.25m) $19m $40m $13m Medical tourism ($2.75m) $21m $18m Education Tourism Research Payroll Professional Development Research Procurement Teaching Prestige tenants ($900k) The partnership with Monash University and location at its Clayton campus provides a direct economic impact of $110m+ through research and teaching on the economy Source: Various data sources from Monash University and MonashHeart, Monash Health; SPP workbook ref (000,302) 8 Document 7 The VHH will be a major employer in the Monash Cluster $142m spent on salary $178m spent on clinical 850+ employees expenditure procurement Number of clinical and research employees at Salary for VHH clinical and research staff Procurement spend for the VHH VHH The VHH will become a major employer in Staff salaries will result in the VHH directly The VHH will procure $178m worth of goods the Monash Cluster, by directly employing contributing $142m to the Victorian and services in 2026 to support the delivery over 850 people across
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