UCSF’s Health Sciences Enterprise is a $5.4 Billion Engine of Economic Growth

UC San Francisco is a driving force of the San Francisco Bay Area economy, with an $8.9 billion economic impact that sustains nearly 43,000 jobs throughout the region, according to a new analysis.

As a top-ranked academic medical center that conducts scientific research, cares for patients and educates health professionals and biomedical scientists, UCSF’s impact on the local economy is broad and varied, creating jobs in San Francisco and beyond, in health care, biotechnology and other industries, including construction.

The UCSF-commissioned report, conducted by Economic & Planning Systems, Inc., of Oakland, ranked UCSF as San Francisco’s second-largest employer and the fourth-largest in the Bay Area, with $5.4 billion in annual revenues and 24,100 employees. Most of UCSF’s revenues – nearly $3.3 billion, or 60 percent in 2015 – now come from clinical services provided through UCSF Health. Just over 3 percent comes from direct contributions from the state, and 1 percent comes from student tuition.

UCSF’s economic contributions go beyond job creation, with programs that help many of the Bay Area’s most vulnerable residents. In 2015, for example, UCSF Health spent nearly $128 million to provide charity and uncompensated care to patients who were unable to afford the cost of treatment. And for nearly 30 years, UCSF scientists have partnered with local educators to improve K-12 science education through the Science & Health Education Partnership. The program now reaches more than 90 percent of schools in the San Francisco Unified School District.

“We take pride in our contributions both to the community and the local economy,” said UCSF Chancellor Sam Hawgood, MBBS. “We are pleased that we can drive innovation in biotechnology, produce new scientists and health professionals, and provide our community with access to the best possible health care.”

In 2015, UCSF accounted for about 19 percent, or $1.1 billion, of the research and development spending in San Francisco. Its inventions have led to nearly 100 currently active life sciences companies, including Genentech and Chiron. UCSF scientists hold 1,490 patents, and these generated 20 percent of the royalty income within the 10-campus University of California system.

“The Bay Area’s biotech industry could not be what it is today without the contributions of UCSF,” said Micah Weinberg, president of the Bay Area Council Economic Institute. “Its scientists are among the world’s best and most productive, and they routinely spin off their inventions into companies that keep the industry competitive.”

UCSF added more than 2,000 jobs since the last economic impact report was released in 2010, a rate that is slower, and likely more sustainable, than other sectors of the San Francisco economy, according to the report.  

UCSF’s rate of job growth between 2000 and 2015 equaled 10 percent, compared to the 23 percent job growth that the San Francisco economy experienced during the same period.  The report also found that UCSF has a larger proportion of middle-income jobs than other sectors of the San Francisco economy. The largest percentage of the university’s work force, 37 percent, earns between $50,000 and $100,000 a year, compared to 28 percent citywide.

UCSF also had a net positive effect on the city’s budget, the report found, even though as a part of the University of California system, it is exempt from property and most other local taxes. UCSF’s net positive effect is due to the payroll and property tax revenues generated by its employees, students, alumni and visitors.

The report also documented how UCSF’s Mission Bay campus continues to attract public-private partnerships that, while not directly sponsored by UCSF, have been drawn there by its presence. These include the incubator space at FibroGen, the US innovation Center and the Illumina Accelerator, all of which help launch biotech startups. Most recently, the new Chan Zuckerberg Initiative has established a biomedical science research center next to the campus. It is co-directed by a UCSF scientist and will support collaboration between scientists at UCSF, UC Berkeley and Stanford.

“This is a really good study that shows the ongoing importance and relevance of UCSF as the second-largest employer and an anchor institution of our health care and biotech industry, an engine of research and development and a supporter of the innovation that drives our economy,” said Ted Egan, San Francisco’s chief economist.

The economic impact analysis calculates UCSF’s total economic output as the cumulative value of its activities in employment, job creation, operations, construction and spending. It includes direct effects, such as the revenue generated by the new UCSF Medical Center at Mission Bay, indirect effects, such as purchasing more food, services and supplies for the new hospitals, and induced effects from employee spending in the regional economy.

For example, it calculated that UCSF’s annual spending of $310 million on construction created 1,361 direct jobs, 362 indirect jobs and 279 induced jobs, for a total of 2,002 jobs. The total economic impact from this construction activity was estimated at $440 million.

“UCSF is an incredible asset to our city,” said San Francisco Mayor Ed Lee. “Its medical center, ranked among the top in the nation, provides world-class care throughout the Bay Area. It’s highly ranked graduate schools attract and train the next generation of health care professionals, and its research enterprise is recognized as one of the strongest in the world leading the way in groundbreaking, cutting edge research. San Franciscans rely upon it for great care and good jobs.”

UC San Francisco (UCSF) is a leading university dedicated to promoting health worldwide through advanced biomedical research, graduate-level education in the life sciences and health professions, and excellence in patient care. It includes top-ranked graduate schools of dentistry, medicine, nursing and pharmacy; a graduate division with nationally renowned programs in basic, biomedical, translational and population sciences; and a preeminent biomedical research enterprise. It also includes UCSF Health, which comprises top-ranked hospitals, UCSF Medical Center and UCSF Benioff Children’s Hospitals in San Francisco and Oakland – and other partner and affiliated hospitals and healthcare providers throughout the Bay Area.