Published on December 15, 2020

Kelsey: Healthcare in RGV growing twice as fast as national average

EDINBURG, Texas – Healthcare is the largest private industry in Hidalgo County, employing 8,000 workers.

This piece of information and other key data points were provided by Brian Kelsey, assistant city manager for the City of Edinburg during a webinar hosted by the Rio Grande Valley Partnership. The event showcased the pull Edinburg has for outside investment. It was titled the “Commercial & Investment Virtual Tour.”

Healthcare, manufacturing, the need for a skilled workforce, and housing were among the topics Kelsey focused on.

“Let’s drill down all little bit on healthcare. Healthcare is the largest private industry for the local economy here. It is about a $2.6 billion industry,” Kelsey said.

“If you look at some of the job creation statistics, (healthcare) employment here has increased by 20 percent since 2015. That is twice the national average. Think about how fast healthcare is growing nationally. We are growing twice that growth here.”

Kelsey has been studying regional economies for a number of years. With the information he has researched he has helped communities communicate their message.

As a relatively new resident of the Rio Grande Valley, Kelsey said it was a “fun exercise” to research the local economy and what its key drivers are. He said that Hidalgo County generates about $23 billion in economic activity.

“Another interesting talking point when you look across the national landscape, this area here trails only Rochester, Minnesota, home to the Mayo Clinic, one of the most well-respected healthcare centers in the world,” Kelsey said.

“We trail only that area nationally in terms of ambulatory healthcare jobs as a share of total employment. So, we have one of the highest concentrations of healthcare employment of any regional economy in the United States. That is pretty remarkable.”

Kelsey said there are about 1,600 payroll business locations or business establishments in Hidalgo County that focus on healthcare. He said they are led by DHR Health and South Texas Health System. Combined the two health systems account for 8,000 local jobs.

“If you look over to the School of Medicine founded in 2013 by UTRGV, I do not know how many of you have kept up with student enrollment over there but it is pretty impressive,” Kelsey said. “Two hundred medical students, 100 faculty members, and 50 PhD scientists.”

Kelsey said the research work undertaken by the scientists is an important asset that the region can leverage.

Speaking to the Rio Grande Guardian later, Kelsey said the $2.6 billion generated by the local healthcare industry in Hidalgo County is what economists refer to as the “direct” contribution to the local economy.

“Technically, it’s healthcare’s value-added contribution to Hidalgo County’s GDP (gross domestic product). This is different from what was estimated in the RGV Partnership’s recently published economic impact report on the healthcare/bioscience sector.”

Kelsey said that in the RGVP report, UTRGV, which conducted the study, used “total” impacts. In other words, the direct contribution plus indirect and induced activity generated through the multiplier effect.

“So, the numbers are different because, one, geography is different; and two, direct vs. total impacts; and, three, industry definition is different.”

Potential investors on the RGVP webinar were looking to see why Edinburg was the best choice. Kelsey said the city has some unique attributes.

“We pitch the community in the context of a regional economy. This is a regional economy. We share common assets. We have similar growth opportunities and challenges. You need to balance that out with what differentiates. What are the unique attributes and characteristics that are different,” he said.

Kelsey pointed out that Hidalgo County is the 8th largest metro economy in Texas. It climbs to fifth largest when the rest of the Valley is added to it.

“Pre-COVID we had a pretty good run of economic growth. Inflation adjusted, the economy was growing at more than two percent annually. Places like Austin are growing three, three and a half percent. Two percent real growth is real strong,” Kelsey said.

The main drivers of the local economy, Kelsey said, are healthcare and manufacturing.

“Healthcare stands out more than most,” he said. However, he said that while doing his research he had uncovered an interesting statistic about manufacturing.

“If you look at all the metro regions across the United States and you look back at 2010, roughly the last ten years, this metro area has led all other regional economies with more than 200 percent real or inflation adjusted growth in the manufacturing sector,” Kelsey said.

“That is absolutely remarkable. I think a lot of people know about the locational advantages, being along the border, obviously. Everyday knows McAllen’s strength in this area too. But when you look at it from the macro perspective, it was a big surprise to me. It is going to be a good talking point for us.”

Kelsey said there are also some legacy strengths. “We are a top five citrus market that is always going to be part of this local and regional economic footprint here.”

In his presentation, Kelsey also focused on the need for a trained workforce.

“When you talk to external people that are familiar with the region here, you are going to hear a couple of common talking points. Yes, there is local value, in terms of how close to the border we are here. And you can talk about transportation logistics. Inevitably the conversation is going to get steered to the cost. And yes this is a lower cost region. That is an important attribute for us. Part of the under-appreciated part of the story here is our workforce, our workforce availability.”

Kelsey pointed out that Edinburg is one of the most well-educated communities in the Valley.

“I tried to unpack some of these statistics to try to understand where we rank in the region and how we compare to the nation. About 35 percent of our residents aged 25 or older have a post-secondary degree. That is everything from a certificate all the way up to a PhD,” Kelsey said.

“A little more than 14,000 primary working age people between the ages of 25 and 64 have a bachelor’s degree or higher. Thirty-three percent of Edinburg’s younger workforce, that next generation workforce, 25-34, has a bachelor’s degree or higher. That leads all the other large cities in the Valley.”

Kelsey said there are 23,000 students at UTRGV’s campus in Edinburg and the number is growing. “Again, UTRGV is going to be an important part of our economic development strategy here as we go forward.”

Another topic discussed was housing. Kelsey said housing preferences are changing.

“The world has changed a lot since last year. People’s expectations about working and living, a lot of those are shifting in a very dynamic way right now, especially for young professionals,” Kelsey said, arguing that not everyone wants home ownership.

“There is a higher premium on mobility and not everybody wants to be tied down to that 30-year fixed mortgage. It is important we offer a lot of different kinds of housing options, no matter their walk of life, no matter what they want from themselves. So that is what we have been investing in here.”

Kelsey said providing a choice in housing is going to be an important part in attracting and retaining a skilled workforce.

“We have permitted more new homes since 2011 than any other city in the Valley. And it is not even really close. The majority, 56 percent of those new homes permitted have been in duplexes, three or four unit buildings, or other types of home for the family. We have a fairly good balance here, it is about half and half, multi-family and traditional single family. We believe that is going to be an attribute for us.”

Blanca Davila

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