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The direct economic impact of Novant Health Inc. on the Triad increased 20% over a three-year period to $1.8 billion, the system said Tuesday.

Novant again commissioned a study that measured its economic prowess for fiscal 2018 from the Center for Healthcare Economics and Policy.

Just as it did for the studies for 2012 and 2015, Novant said the goal was to help communities and politicians at all levels better understand its overall economic influence.

Novant defines the Triad as including the Forsyth, Clemmons, Kernersville and Thomasville medical centers, Medical Park Hospital and doctors’ offices, outpatient facilities and imaging centers in a 10-county area.

Economic impact was measured using data provided by Novant for net operating revenues, salaries, wages and benefits, and capital expenditures for construction at all N.C. facilities.

The study measured Novant’s economic impact in three categories: direct, indirect (primarily suppliers) and induced (defined as revenue, wages and jobs generated by industry-to-industry transactions, as well as employee and supplier spending on local goods and services).

The study determined Novant generated $683 million of indirect output and $967 million of induced output in the Triad.

Many economists exclude induced data because of the impression that some jobs in a local community — such as construction, retail and services — were created by an employer primarily or specifically to serve a large company.

Novant has 28,092 employees overall in its four-state network, including 8,145 in Forsyth County and 23,843 in North Carolina.

The study determined Novant generated $112 million in state and local tax revenue and more than $322 million in federal tax revenue.

As tax-exempt nonprofit organizations, Wake Forest Baptist and Forsyth medical centers enjoy wide tax benefits. In exchange for providing “community benefits,” they qualify for exemptions on state and federal income taxes and city and county property taxes.

Meanwhile in Charlotte, Novant’s economic impact was determined to be $2.4 billion of direct output, $1 billion of indirect output and $1.2 billion of induced output, or $4.6 billion overall.

Altogether, the system said its economic impact was at $9 billion, up from $7 billion in 2016.

“While the pace of change continues in state and federal regulations, Novant Health remains dedicated to investing in North Carolina’s economy,” Fred Hargett, Novant’s chief financial officer, said in a statement.

“This study illustrates Novant Health’s commitment to investing in communities.”

Novant operates 12 medical centers in N.C., as well as nine outpatient surgery centers, 26 diagnostic imaging centers, eight outpatient rehabilitation centers and more than 530 physician clinics.

“We have taken great strides to increase access to care for all patients through convenient locations and our investment in digital products and new technologies,” Hargett said.

Novant said its community care impact was $797 million in the state, which included the cost of programs serving patients, local citizens and uninsured and underserved individuals.

About $131 million of the benefit was charity medical care for the uninsured, as well as $606 million of unreimbursed health services to individuals with Medicare and Medicaid coverage and patients from other government programs in the state.

Novant Health contributed $27.3 million to research, community health improvement services and benefit operations, community building activities and health professions education, and cash and in-kind contributions to community groups.

Carl Armato, Novant’s chief executive and president, received a 5.8% increase in salary during fiscal 2017 to $1.43 million. Novant typically releases its executive compensation in November, which means the totals can be nearly two years old when disclosed.

Armato’s incentive pay dropped 9.1% to $1.28 million. Armato’s total compensation fell 0.4% to $3.42 million.

Novant, like most health-care systems serving N.C., says high compensation levels are necessary to recruit and retain executives to run “a very complex organization.”

Critics say hospital systems use their nonprofit status for tax advantages and public-relations purposes, while compensation committees have sought to justify corporate-level wages and benefits to top executives.

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rcraver@wsjournal.com 336-727-7376 @rcraverWSJ

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