The economists call them &#8220Eds and Meds.&#8221

They are universities and hospitals, institutions found in many cities, even those with

otherwise decaying economies, that can be the basis for a financial rebirth that creates high-

skilled, high-wage jobs not easily outsourced, offshored or otherwise made obsolete.

Merge the two, as in a medical school, and, analysts say, it creates the potential for the

kind of economic growth that can ripple through a local economy. It is touted as a way for

economic recovery to be partially channeled into urban centers, rather than only to the

suburbs.

Academic medicine, as the blend of universities and medical centers is called, is coveted

as the basis for much economic development in rust belt cities where, one analyst said, bell

towers are replacing smokestacks as signs of economic health. Cities in that mold include

Cleveland and Pittsburgh.

And Buffalo.

&#8220The intersection of health care and health science education, that&#8217s the basis

for a new economy,&#8221 said David Dunn, vice president of health sciences at the University

at Buffalo. &#8220The return on investment is a home run.&#8221

Across the state of New York, alliances of higher education and health care already provide

a boost to the state&#8217s economy worth $85.6 billion a year, according to a new study by a

group representing the 15 public and private medical schools that operate in New York State.

That&#8217s $37.2 billion in direct impact, plus a multiplier factor of 2.3 that calculates

another $48.4 billion in indirect activity from the academic health care dollars being spent

throughout the economy.

According to the numbers put out last week by the Associated Medical Schools of New York,

one dollar out of every $13 in the state&#8217s overall economy, and one job out of every 11,

comes from the state&#8217s medical schools and their affiliated hospitals and research

centers. It is, according to the organization&#8217s leaders, a significant return on

investment for a state that provides a relatively small amount of funding for medical schools,

including the University at Buffalo&#8217s School of Medicine and Biomedical Sciences.

From 1995 to 2008, the group says, the overall New York economy grew 186 percent, while the

impact of academic medicine was up 270 percent.

Dr. Antonio M. Gotto, chairman of AMSNY&#8217s board and dean of Cornell&#8217s Weill

Medical College, last week urged state lawmakers to resist any urge to balance the

state&#8217s deficit-heavy budget on the backs of the state&#8217s medical schools.

&#8220Every time they authorize cuts to stem cell funding, Medicaid or other health

care-related programs, they are not only making it harder for our medical institutions to

provide care and undertake critical research, they are also negatively impacting the

state&#8217s economy.&#8221

The Buffalo Niagara Medical Campus in downtown Buffalo is the site of Buffalo General

Hospital, UB&#8217s Center of Excellence in Bioinformatics and Life Sciences, Roswell Park

Cancer Institute and a handful of other health-related institutions and companies. Among them,

institutions and businesses on the campus have more than 8,500 employees, with a $388 million

payroll and a total economic impact to the region put at $1.5 billion.

While many of the jobs are high paying &#8212 more than 700 employees of campus

institutions are either medical doctors or Ph.Ds &#8212 Dunn notes that the economic footprint

expands to the surrounding area, creating demand for housing, retail stores and other

businesses.

&#8220Everybody&#8217s got to get lunch somewhere,&#8221 he said.

Dunn said the budget of the UB medical school, headquartered on the university&#8217s South

Campus, and its many related functions approaches $500 million a year. New York taxpayers, he

said, provide only about 15 percent of that, mostly for staff salaries, while the rest comes

from research grants, tuition and other sources.

State support for the UB medical school, and similar institutions across the state, has

been shrinking in recent years.

&#8220That&#8217s at a time when there is this huge opportunity for investment with this

tremendous rate of return,&#8221 Dunn said.

Jaison Abel, a Buffalo-based economist for the Federal Reserve Bank of New York, says not

all medical services are created economically equal. Some may simply help a region weather the

storms of a down economy, while others may actually encourage a turnaround.

&#8220The education and medical sectors of an economy can provide stability to an area

because they tend not to fluctuate as much as other parts,&#8221 he said. He noted that some

declining cities may see their medical care sector as important, not so much because that part

of their economy is growing, but because everything else is shrinking.

To be an engine of economic growth, Abel said, hospitals and medical schools need to do the

kinds of things Buffalo&#8217s institutions say they are doing. One is to provide specialty

care, as at the Roswell Park Cancer Institute, that attracts patients from other communities.

Another is to spin off new products and services, as at the bioinformatics center, that

attracts high-skill employees.

Statewide, AMSNY says, medical schools and their associated hospitals support the

equivalent of some 649,000 full-time jobs. While the institutions themselves are tax-exempt,

their employees, suppliers and customers &#8212 including those who travel from out of state

for medical care &#8212 generate $4.2 billion a year in taxes.

In Buffalo, the study says, UB medical and its affiliated hospitals generate nearly 8

percent of all local tax receipts, 8.5 percent of local jobs and 8.5 percent of the

area&#8217s overall economic activity.

UB does not operate a hospital of its own, but places medical students in the hospitals of

the Kaleida Health system, Erie County Medical Center, Roswell Park Cancer Institute and the

Veterans Affairs Medical Center. That allows AMSNY to count the economic impact of all those

institutions in its figures.

&#8220There is just a small amount invested by the state in these institutions,&#8221 said

AMSNY chief operating officer Crystal Mainiero. &#8220But every bit counts.&#8221