A Department of Veterans Affairs report published in March recommending the closure of Jack C. Montgomery VA Medical Center and discussions about merging veterans’ health care services here with those provided in Oklahoma City spurred concerns about the potential impact on the local economy.
The comprehensive report to the AIR (Asset and Infrastructure Review) Commission cites higher concentration of the veteran population within the Eastern Oklahoma market in the Tulsa area as a basis for the recommendation. A cost-benefit analysis shows it would cost an estimated $8.78 million to shutter the Muskogee VAMC and realign services with the veteran population in Tulsa, slightly more than the $8.56 million price tag of maintaining the status quo.
That cost of closing the facility would be much greater to the local economy. An analysis of employment and payroll data for Jack C. Montgomery VAMC, along with its economic output estimates an annual loss of $390.8 million if the facility closed.
Jeff Underwood, director of industrial development for Muskogee City-County Port Authority, conducted the analysis based on data obtained from VA Central Office in Washington. The economic impact analysis, requested by the Phoenix, was supported by Impact DataSource, an Austin, Texas-based economic consulting firm.
“The Medical Center’s direct employment of 1,415 supports an additional 652 jobs in the community, so 2,067 jobs are at risk if the facility closes,” Underwood states in a letter documenting the findings of the impact analysis. “Similarly, a total of $215 million in workers’ earnings may disappear from the local economy.”
The overall impact of a potential closure, “in terms of the reduction in total goods and services,” would total $390.8 million a year. That figure is based on the facility’s direct economic output worth $291.72 million, and indirect and induced economic activity with projected value of $99.04 million.
Indirect and induced economic activity, according the impact analysis, is produced by “business-to-business expenditures” initiated by the organization and “consumer-to-business expenditures initiated by workers” who spend a portion of their earnings on goods and services. The total loss based on economic output “is a duplicative total in that goods and services will be counted multiple times if they are used in the production of other goods and services.”
VA officials said the recommended closure of Muskogee VAMC is nothing more than a recommendation at this point. During the next year the AIR Commission will conduct public hearings, visit facilities, meet with employees and partners, and gather input from veterans.
AIR Commission members will assess recommendations, make necessary revisions, and then forward them to President Joe Biden for further review. Biden will decide whether to submit the final recommendations to Congress, which can accept them in their entirety by inaction or reject them by adopting a veto-proof joint resolution.
Paul Gregory, interim director, Eastern Oklahoma VA Health Care System, said the recommended closure of Muskogee VAMC is based in part on enrollment projections for veterans that “show Tulsa enrollees increasing 3.9% by 2030.” Projections also show “slower growth … for northeast Oklahoma of 1.3%, (and) decreases for southeast Oklahoma of -1.2%, and … -1.5% for Muskogee by 2030.”
“The justification in the recommendations for moving inpatient services — medical-surgical care, rehabilitation and behavioral health — to the Tulsa area was to align these services geographically with the highest veteran enrollee population for the eastern Oklahoma market,” Gregory said in an email response to inquiries about the report. “The proposed new Tulsa VA Hospital site has 22,722 enrollees within 30 minutes and…
Read More: Cost of closing VA medical center devastating to community | News