Survey Results by Integrated Healthcare Strategies Show Latest Trends in Healthcare Salary Increases

Integrated Healthcare Strategies, a national consulting firm dedicated exclusively to healthcare and focused on improving the operations of healthcare organizations, today announced key findings from its Spring 2012 Salary Increase, Incentive, and Benefit Updates Survey.

The firm, with offices in Kansas City, Minneapolis, and Dallas, conducts the survey as a series and has published five previous surveys on this topic.

“At the start of the unstable conditions in the US economy, Integrated Healthcare Strategies began monitoring trends in healthcare salary increases, incentive practices, and benefit changes,” said Kevin Talbot, Executive Vice President and leader of the Executive Compensation and Governance service line of Integrated Healthcare Strategies. “This sixth survey in the series examines the last quarter of 2011 and into the first quarter of 2012.”

The results of the survey indicate that nearly 90% of hospitals and health systems are either leaving 2012 salary increase budgets unchanged from 2011 or increasing budgets from 2011. Although salary increases for executives, middle management, and staff-level employees continue to be at levels below historical trends, the survey found that budgeted salary increases are slightly higher than the levels reported in earlier surveys conducted by the firm. The median budgeted salary increases for 2012 is 2.5% for executives, 2.8% for middle management, and 2.6% for staff. Organizations reported that they were able to follow through and provide the increases they had budgeted in 2011. This survey showed that actual increases were on par with budgeted increases in 2011. “We expect these numbers to continue to increase at a conservative pace through 2012,” said Talbot.

In the area of executive incentive plans, results showed that, of the nearly three quarters that had incentive plans for their executives, approximately one quarter said they would be making changes to their plans in the coming year. Of that same group, 90% will pay awards based on performance in 2011. The largest group, almost 40%, will pay incentive awards at or near target.

Given the market's interest in enhancing physician alignment, the firm expanded the Spring 2012 survey to measure the prevalence of physician alignment goals in executive incentive plans. Data revealed 37.8% of the respondents are using some kind of physician alignment criteria in their incentive plans. The most popular of these goals is “Meeting CMS Quality Standards.” The next two most common criteria are “Physician use of electronic patient records” and “Readmission Rates.”

Another topic added to the survey, gainsharing, showed that market use prevalence was only 15%. Of those in the Spring 2012 survey that reported having a gainsharing plan in place, over half responded that they pay a flat dollar amount to eligible employees with an average payout of less than $450 annually, another 36% pay a percentage of annual salary with an average payout of 2%, and the remaining 9% pay the gainsharing bonus using another method of calculation.

The survey explored Float Pool RN pay and analysis found that 38.5% of the organizations are paying these providers the same as their typical staff RN - providing little financial incentive to work on a different unit each day. Another 27.5% are paying a flat dollar differential for those in the float pool; 17% are paying RNs in a higher pay grade (or paying a higher pay rate) than the staff RN, and 14.7% are paying Float Pool RNs a separate differential for being in the float pool. If they are being paid a different rate, it's on average 15% higher. The percent differential average is 20% and the flat dollar median differential is $3.25/hour.

The Survey revealed that pay rate compression issues brought on by pay grades not moving and employees not receiving much, if any, merit increases, and new employees being hired in at the same or close to the same rates as three to four year employees are still relevant for over half of the participants. Over one quarter of organizations reported that they are leaving the employee pay rates compressed.

The Spring 2012 survey began to research the topic of the new coding scheme, ICD-10, and it's affect on staffing changes for coders. Nearly 60% of respondents reported that they anticipate some type of staffing change. Of those, 53.6% are expecting to hire more coders, another 23.2% are anticipating more coder turnover, and another 23.2% are anticipating other changes such as implementing more training programs.

Integrated Healthcare Strategies conducts surveys on all the 'People of Healthcare' - executives, employees, physicians, advanced practice clinicians, medical directors and nurses. To see details on all the firm's compensation and engagement surveys, please click here.
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