OC in Healthcare Top 30, Higher in Devices, Services
By VITA REED
Orange County and other areas with high numbers of healthcare jobs could get a boost as the segment grows as a share of the nation’s economy, according to a new study from the Milken Institute.
OC ranked No. 29 among 317 metropolitan areas in terms of its overall healthcare economy, according to the Santa Monica-based think tank’s study, which looks at how the healthcare sector could affect regional economies.
The county came in behind Los Angeles, which was No. 5 in the survey, and San Diego, with ranked 17th. Boston,a haven for biotechnology companies and home to top medical schools,topped the Milken survey, followed by New York, Philadelphia, Chicago and Los Angeles.
To come up with the rankings, the institute used the number of healthcare jobs in a community compared to the nation’s healthcare employment.
The study uses the term “healthcare poles” to describe its index because the regions act as magnets, drawing other health industries and related companies.
According to the institute, more healthcare usage could help regional economies. The healthcare sector has doubled since 1970,going from 7% of the country’s gross domestic product to 14% today.
Healthcare usage is projected to grow to 17% of gross domestic product by 2011, when the first baby boomers turn 65.
OC scored more than three times the national average but lower than Los Angeles because it doesn’t have the same sort of hospital and manufacturing base, said Rob Koepp, a Milken research fellow who co-authored the report.
“If you just think of hospitals, L.A. does quite well,I mean, there’s Cedars-Sinai,” Koepp said. “Orange County, though it has good hospitals, certainly doesn’t have what L.A. does.”
Medical Device Leader
OC ranked higher in several categories, including among the top 10 for medical devices and health insurance and services.
“Where Orange County is doing well, (and) I don’t think it comes as a surprise, is medical instruments and supplies,” said Koepp, who’s an OC native. “We are ahead of not only L.A., we’re also ahead of Boston, which is the leading health pole in the nation.”
Milken’s report ranked OC No. 8 among the top 25 areas for medical instruments and supplies.
OC ranked second in California only to San Jose in medical devices and supplies. The top medical device spot: Lynchburg, Va.
San Diego finished ahead of OC overall because of its concentration of biotech, biomedical and healthcare service employers, Koepp said.
“San Diego scores exceptionally high in what we call the research and testing services category,they’re second in the nation. That’s basically measuring biotech. And while we do have some biotech in Orange County, it’s really a more medical device cluster.”
OC’s strong background in engineering-related industries such as aerospace may be a factor in its device strength, according to Koepp.
“And, of course, the role of Arnold Beckman is quite well-known as kind of a seeder of things,” he said.
Beckman, now 103, is a seminal figure in OC’s biomedical industry,the company he founded back in 1935 has evolved into Beckman Coulter Inc., the Fullerton biomedical testing company that sold $2 billion worth of laboratory gear last year.
“And then, you have a good university system underpinning,” Koepp said. “We have an outstanding life sciences sector at UCI, in addition to having a good engineering school. So those help combine to provide the intellectual capital that you need for something like the medical device sector that we have here.”
UCI started its biomedical engineering program two years ago.
“We’re building a local talent pool,” said Steven George, a professor at UCI’s Henry Samueli School of Engineering and program director.
UCI’s biomedical engineering students, besides working for device companies, also could end up starting companies, George said.
“That’s a big push by myself and the dean (Nicolaos Alexopoulos) to generate entrepreneurship,” he said.
Perhaps surprisingly, OC’s highest individual ranking was 7th in the number of dental offices and clinics.
PacifiCare Effect
OC ranked 10th in the medical services and health insurance category,thanks in a big way to PacifiCare Health Systems Inc., the Cypress-based managed healthcare service plan operator with around 4,800 local workers.
The county ranked 11th in the number of offices of clinics and doctors, along with a category that’s called “other healthcare practitioners.”
OC’s other top 25 ranking was in medical and dental laboratories.
The county is home to Nichols Institute, a San Juan Capistrano-based testing unit of Quest Diagnostics Inc., and also is home to Newport Beach-based Glidewell Laboratories Inc., a dental laboratory.
Milken’s study mainly addressed the impact of nurturing expansion of the healthcare industry, including employment and efforts to lure more companies.
The survey didn’t address some of the touchier issues surrounding healthcare, particularly who will be responsible for paying for services,a top concern of employers.
