Category Archives: Employee Compensation

How much nurse pay is rising—and why

Posted on by • Posted in Demand, Demand and Supply Gap, Employee Compensation, Employee Retention, Employee Staffing Shortage, Health System, Hospital, Hospital Industry, Nurse Agency Staffing, Nurse Staffing, Nurse Travelers, Nurses, Nurses Compensation, Nurses Shortage, Nurses Union, Recruiting, Talent Identification, Talent Imperative, Talent Management • Leave a comment
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Travel Nurse Guaranteed Pay: The Truth - The Gypsy Nurse

Amid a nationwide staffing shortage, rising demand for nurses has led hospitals to increase salaries and other benefits to attract and retain workers, Melanie Evans reports for the Wall Street Journal.

Hospitals increase salaries, benefits to keep up with nursing demand

Hospitals across the country have been struggling amid staffing shortages, particularly of nurses, Evans reports. According to health care consultancy Premier, nurse turnover rates have increased to around 22% this year, up from the annual rate of about 18% in 2019.

“We are employing more nurses now than we ever have, and we also have more vacancies than we ever had,” said Greg Till, chief people officer at Providence Health & Services.

To retain their current nurses and attract new staff, many hospitals have increased their nurses’ salaries to remain competitive in the job market, Evans reports.

For example, HCA Healthcare, one of the largest hospital chains in the country, said it increased nurse pay this year to keep up with Covid-19 surges and compete with rivals also trying to fill vacant positions.

Similarly, Jefferson Health in May raised salaries for its nearly 10,000 nurses by 10% after the system discovered that rivals had increased their compensation. “The circumstances required it,” said Kate Fitzpatrick, Jefferson’s chief nurse executive.

In addition, Citizens Memorial Hospital in Bolivar, Mo., this month raised its nurses’ salaries by up to 5% after rivals in other nearby cities increased their workers’ wages. Sarah Hanak, Citizen Memorial’s CNO, said the hospital also increased the hourly wages of nurses working overnight shifts by around 15% to ensure sufficient staffing for those shifts.

“We were forced to,” Hanak said. “We absolutely have to stay competitive.”

Overall, the average annual salary for RNs, not including bonus pay, grew to $81,376, according to Premier—a 4% increase across the first nine months of the year. This is larger than the 3.3% increase in the average annual nurse salary for 2020 and the 2.6% increase in 2019, Evans writes.

In addition to salary increases, some organizations, such as Providence, are also offering other benefits to attract and retain nurses, such as more time off, greater schedule flexibility, and new career development opportunities. Many hospitals are also hiring new graduates to work in specialized roles in ORs and other areas, allowing them to advance their careers more quickly than they would have before.

Overall, this rising demand for nurses has allowed those entering the workforce to negotiate higher salaries, more flexible working hours, and other benefits, Evans writes.

“I think you get to write your ticket,” said Tessa Johnson, president of the North Dakota Nurses Association.

Nurse compensation increases were inevitable—here’s why

It was inevitable that we would get to this point: baseline nurse compensation on a clear upward trajectory. Inevitable because this boils down to laws of supply and demand. Amid a clear nursing shortage, organizations are being forced to raise baseline compensation to compete for increasingly scarce qualified nurses. This is true in nearly every market, even for those considered to be ‘destination employers.’

If anything, what’s most surprising in the data from Premier is the moderated increase of around 4%. From a worker’s perspective, that’s not even covering cost of living increases due to inflation. However, amid this new data, it’s important to keep two things in mind:

Two considerations for health care leaders

  1. New data only captures baseline compensation.Differentials—which organizations must standardize and expand across shifts, specialties, and even settings—plus overtime put baseline compensation much higher. Not to mention lucrative sign-on bonuses, that members tell us are increasingly table stakes in their markets. In general, we don’t recommend this type of incentive that does nothing for retention. You’re better off investing those resources in baseline compensation as well as beefing up your RN bonus plan to incentivize retention.
  2. There is a new floor for wages (and it’s only going up from here).

Open questions (and important indicators) we are assessing

  • What happens to wages for entry-level clinical roles? As the shortage of RNs persists, organizations will need to make a shift to team-based models of care, and those are only possible with a stable workforce of entry-level personnel. Right now, that part of the health care workforce is anything but stable. When you consider their work and their wages in comparison to out-of-industry players that pay the same or better, that’s a clear area where investment is required. 
  • Will the share of nurses working permanently with travel agencies return to pre-pandemic levels? That’s to say, what will those RNs who experienced the traveler lifestyle and pay value more moving forward: the flexibility and premium pay or stability of permanent employment? Even if this number stabilizes a couple percentage points above pre-pandemic levels, that will aggravate provider’s sense of shortage.

UPMC workers to strike Nov. 18

Posted on by • Posted in Employee Benefits, Employee Compensation, Employee Raise, Employee Strike, Health Insurance Industry, Health System, Hospital, Hospital Industry, Job, Job Market, Labor Shortages, Labor Spend Management, Labor Strike, Labor Union, Labor Union Grievance, Sign of the Times • Leave a comment
https://www.beckershospitalreview.com/hr/upmc-workers-to-strike-nov-18.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Workers at Pittsburgh-based UPMC plan to strike over wages and benefits, the Post-Gazette reported Nov. 5. 

Service Employees International Union Healthcare Pennsylvania, which does not represent the workers but is supporting them, told Becker’s Hospital Review the strike would involve workers at UPMC hospitals in Pittsburgh, including transporters, dietary workers, housekeepers, nurses, patient care techs, medical assistants, pharmacy techs, surgical techs, valets, therapists, health unit coordinators and administrative assistants. Workers plan to strike for one day on Nov. 18.

The workers are demanding a $20 per hour minimum wage, affordable high-quality healthcare, elimination of all medical debt and respect for union rights, according to a union news release.

Their strike notice came after UPMC announced Nov. 2 that the health system is giving 92,000 staff members a bonus of $500 to thank them for their work during the pandemic. UPMC will issue the bonuses on Nov. 26. The health system also announced improvements to employee compensation and benefit programs, including raising the entry level wage to $15.75 in January, according to the Post-Gazette. 

“There was no ‘thank you pay’ until we started organizing to strike,” Juilia Centofanti, pharmacy tech at UPMC Children’s Hospital of Pittsburgh, said in a news release.

Ms. Centofanti added that employees are “owed this [$20 per hour wage] and so much more,” and said she “will continue organizing with my co-workers for the pay, safer staffing and union rights we deserve.”

In announcing the bonuses, Leslie Davis, president and CEO of UPMC, told workers, “Over the past 20 months, you have risen in truly exceptional ways to meet challenges we could have never anticipated. With your critical support, UPMC continues to care for so many.”

A UPMC spokesperson declined to comment to Becker’s on Nov. 5.

UPMC is a $23 billion healthcare provider and insurer. SEIU Healthcare Pennsylvania has been trying to organize about 3,500 hourly workers at UPMC Presbyterian and Shadyside hospitals for nearly a decade, but has not yet held a unionization vote, according to the Post-Gazette.

Read the full report here.

Lower volumes, higher wages, supply chain disruption all dragged down hospital

Posted on by • Posted in Employee Compensation, Employee Raise, Employee Staffing, Employee Staffing Shortage, Health System, Hospital, Hospital Industry, Labor Shortages, Labor Spend Management, Market Outlook, Market Trends, Market Uncertainty, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue, Supply Chain • Leave a comment
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Hospitals’ performances declined “by almost every metric” during September as volumes dropped, average patient stays rose and expenses increased “dramatically” due to labor and supply chain issues, Kaufman Hall wrote in its latest monthly report.

Although revenue increased compared to this time last year, the industry analyst said that these pressures have led median change in hospital operating margin to decline 18.2% from August to September, not including CARES act funding.

These declines were greatest across regions heavily affected by the recent delta surge, with the west part of the country seeing the largest year-over-year drop in its median change in operating EBITDA margin (38%), Kaufman Hall wrote.

Hospital size also played a role in margin performance, they wrote, with hospitals containing more than 500 beds seeing year-over-year declines of 36% while those with 25 or fewer beds actually seeing their margins increase year over year.

Adjusted discharges dropped 5.1% month over month but remained up 11.4% year over year. Patient days similarly dropped 1.4% month over month, “reflecting a decrease in COVID-19-related hospitalizations,” but are still up 11.4% year over year, according to the report. Notably, the average length of stay saw increases across the board—0.7% month over month and 4.8% year over year.

Expenses and revenues continued their hand-in-hand climb during September.

For the former, total expenses grew 2.2% month over month and 11.2% year over year. Labor expenses increased 1.4% month over month at the same time as workers per patient bed declined, the group wrote. Other non-labor expenses, including drugs and medical supplies, also saw a 1.3% month-over-month increase.

“Multiple factors are contributing to alarming and sustained increases in hospital expenses,” Erik Swanson, a senior vice president of data and analytics with Kaufman Hall. “Growth in labor expenses are outpacing increases in hours worked, suggesting hospitals are paying more due to nationwide labor shortages. Rising supply and drug expenses also point to worldwide supply chain issues.”

Hospital revenues saw their seventh consecutive month of year-to-date increases when compared to 2020 and 2019 alike, “due in part to yearly rate changes and the continued rise in higher acuity cases,” Kaufman Hall wrote. Specifically, gross operating revenues minus CARES grew 12.3% year over year from 2020 and 12.3% year over year from 2019, with inpatient revenue rising faster than outpatient revenue.

Month over month was a different story, however, with gross operating revenue without CARES dropping 1.4%. While inpatient revenue was up 1.5% from August, a 3.3% decline in outpatient revenue “suggests that consumer worries about accessing care during the recent delta surge have led to another downswing,” Kaufman Hall wrote.  

Kaufman Hall’s reports incorporate data from more than 900 U.S. hospitals. The September numbers follow early warnings of delta-fueled recovery roadblocks from the group’s preceding monthly reports as well as recent hospital chain earnings calls highlighting high revenues, costs and COVID-19 patient counts.

Would Medicare for All Increase Your Wages?

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Would Medicare for All Increase Your Wages?
Would Medicare for All Increase Your Wages? - YouTube

Medicare for All, which would extend health coverage to all Americans, has been a hot topic of debate in recent years. Researchers have looked into the many ways that a switch to Medicare for All might change our lives, and one of those areas of change might be wages. Employer provided healthcare is baked into our current system of healthcare, and there are a lot of studies that look at how employer paid premiums can depress wages, and how our paychecks might shift in a M4A-type situation.

Hospitals paying $24 billion more for labor during the COVID-19 pandemic

Posted on by • Posted in Employee Burnout, Employee Compensation, Employee Overtime, Employee Retention, Employee Satisfaction, Employee Staffing, Employee Staffing Shortage, Health System, Hospital, Hospital Industry, Labor Relations, Labor Shortages, Labor Spend Management, Labor Strike, Labor Temporary, Nurse Agency Staffing, Nurses Shortage, Pandemic • Leave a comment

https://www.healthcarefinancenews.com/news/hospitals-paying-24-billion-more-labor-during-covid-19-pandemic

Clinical labor costs are up by an average of 8% per patient day, translating to $17 million in additional annual labor expenses.

As the delta variant pushes COVID-19 caseloads to all-time highs, hospitals and health systems across the country are paying $24 billion more per year for qualified clinical labor than they did pre-pandemic, according to a new PINC AI analysis from Premier.

Clinical labor costs are up by an average of 8% per patient day when compared to a pre-pandemic baseline period in 2019. For the average 500-bed facility, this translates to $17 million in additional annual labor expenses since the beginning of the public health emergency.

The data also shows that overtime hours are up 52% as of September. At the same time, the use of agency and temporary labor is up 132% for full-time and 131% for part-time workers. The use of contingency labor – positions created to complete a temporary project or work function – is up nearly 126%.

Overtime and the use of agency staff are the most expensive labor choices for hospitals – usually adding 50% or more to a typical employee’s hourly rate, Premier found.

And hospital workers aren’t just putting in more hours – they’re also working harder. The analysis shows that productivity, measured in worked hours per unit of departmental volume, increased by an average of 7% to 14% year-over-year across the intensive care, nursing and emergency department units, highlighting the significance of the increases in cost-per-hour.

Another complicating factor is that hospital employees are more exposed to COVID-19 than many other workers, with quarantines and recoveries requiring the use of sick time. The data shows that use of sick time, particularly among full-time employees (FTEs) in the intensive care unit, is up 50% for full-time clinical staff and more than 60% for part-time employees when compared with the pre-pandemic baseline.

WHAT’S THE IMPACT

The combined stressors of working more hours while under the constant threat of coronavirus exposure are pushing many hospital workers to the breaking point. In fact, the data shows clinical staff turnover is reaching record highs in key departments like emergency, ICU and nursing. 

Since the start of the pandemic, the annual rate of turnover across these departments has increased from 18% to 30%. This means nearly one-third of all employees in these departments are now turning over each year, which is almost double the rate from two years ago.

This is a number that could increase as new vaccination mandates take effect. Already, one Midwestern system reported a loss of 125 employees who chose not to be vaccinated, while a New York facility reported another 90 resignations. Overall, staffing agencies are predicting up to a 5% resignation rate once vaccine mandates kick in. 

While a minority of the overall workforce, losses of even a few employees during times of extreme stress can have a ripple effect on hospital operations and costs.

THE LARGER TREND

According to the American Hospital Association, hospitals nationwide will lose an estimated $54 billion in net income over the course of the year, even taking into account the $176 billion in federal CARES Act funding from last year. Added staffing costs were not addressed as part of CARES and are further eating into hospital finances. 

As a result, some are now predicting that more than half of all hospitals will have negative margins by the end of 2021 – a trend that could be dire for some community hospitals. 

Prior to the pandemic, about one quarter of hospitals had negative margins, the Kaufman Hall data showed. At the beginning of 2021, after almost a year of COVID-19, half of hospitals had negative margins.

Meanwhile, the most potentially disruptive forces facing hospitals and health systems in the next three years are provider burnout, disengagement and the resulting shortages among healthcare professionals, according to a March survey of 551 healthcare executives.

Are recent labor actions getting nursing unions what they want?

Posted on by • Posted in Employee Benefits, Employee Compensation, Employee Morale, Employee Protections, Employee Satisfaction, Health System, Hospital, Hospital Industry, Labor Spend Management, Labor Strike, Labor Union, Labor Union Grievance, Nurse Staffing, Nurses, Nurses Compensation, Nurses Union, Nursing Home • Leave a comment
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While nurses in Cook County, Illinois, struck a deal in recent days, those on a three-month-plus strike against a Tenet hospital in Massachusetts plan a protest at the chain’s Dallas headquarters.

Thousands of healthcare workers have waged strikes this summer to demand better staffing levels as the pandemic brought greater attention to what happens when a nurse must take care of more patients than they can reasonably handle.

In New York, a report from the attorney general that found nursing homes with low staffing ratings had higher fatality rates during the worst COVID-19 surges last spring helped spur legislators to pass a safe staffing law long-advocated for by the New York State Nurses Association.

While unions elsewhere face a steeper climb to win the success found in New York, through strikes and other actions, they’re attempting to get new staffing rules outlined in their employment contracts.

Most nursing strikes include demands for ratios, or limits on the number of patients a nurse can be required to care for, Rebecca Givan, associate professor in the School of Management and Labor Relations at Rutgers University, said.

“And employers are very anxious about that because it threatens their bottom line, so often when a compromise is found, it’s something that approaches a ratio but maybe has a bit more flexibility,” Givan said.

Some have been successful, like the 1,000 Chicago-area nurses at Stroger Hospital, Provident Hospital and Cook County Jail who waged a one-day strike on June 24 after negotiating with the county over a new contract for nearly eight months.

They reached a tentative agreement shortly after the strike, stipulating the hiring of 300 nurses, including 125 newly added positions throughout the system within the next 18 months.

The deal also includes wage increases to help retain staff, ranging from 12% to 31% over the contract’s four-year term, according to National Nurses United.

Meanwhile, 700 nurses at Tenet’s St. Vincent Hospital in Worcester, Massachusetts, have been on strike for over 100 days over staffing levels. Nurses represented by the Massachusetts Nurses Association have been trying to get an actual nurse-to-patient ratio outlined for specific units in their next contract.

The two sides haven’t come close to reaching a deal yet, and some nurses will travel to Tenet’s headquarters in Dallas on Wednesday in an attempt to appeal to corporate executives, according to MNA.

At the same time, federal lawmakers wrote to Tenet CEO Ron Rittenmeyer seeking details on the chain’s use of federal coronavirus relief funds amid the strike and alongside record profits it turned last year.

The hospital denied lawmakers’ claims in the letter that Tenet used federal funds to enrich executives and shareholders rather than meet patient and staff needs, saying in a statement it strongly objects to the “mischaracterization of the facts and false allegations of noncompliance with any federal program.”

The strike is currently the longest among nurses nationally in a decade, according to the union.

A number of other major hospital chains have contracts covering their nurses expiring this summer, including for-profit HCA Healthcare and nonprofit Sutter Health.

Unionized nurses at 10 HCA hospitals in Florida have reached a deal on a new collective bargaining agreement, though members still need to ratify it, according to National Nurses United. The details are still unclear.

And after joining NNU just last year, 2,000 nurses at HCA’s Mission Hospital in Asheville, North Carolina, ratified their first contract Saturday, which includes wage increases and the formation of a nurse-led staffing committee.

Newly-formed unions take an average of 409 days to win a first contract, according to an analysis from Bloomberg Law. In the healthcare industry, new unions take an average of 528 days to win a first contract, the longest among all sectors examined.

Across the country at Sutter’s California hospitals, disputes haven’t been so easily resolved. Healthcare workers at eight Sutter hospitals planned protests throughout July “to expose the threat to workers and patients caused by understaffing, long patient wait times and worker safety issues at Sutter facilities,” according to Service Employees International Union United Healthcare Workers West, which represents the workers.

Similar to the ongoing Tenet hospital strike, SEIU is highlighting Sutter’s profits so far this year and the federal relief funds it received.

Show Me the Money

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https://www.kornferry.com/insights/this-week-in-leadership/show-me-the-money-on-the-job-posting?utm_campaign=07-08-21-twil&utm_source=marketo&utm_medium=email&mkt_tok=NDk0LVZVQy00ODIAAAF-JU8PsKZmkUuwf6WOTIBa-kuwu0Q2Bccxg3_YGKyUCw7q5Up-mWNx2uuJOjUTIrfWBYkzEWupwlgA3I2CLrERtzXggonxBDJPTPMVgQW7IKqDZg
DevOps for Defense

How much transparency is too much?

That’s the question business leaders are facing after Colorado lawmakers passed a bill requiring companies to post salary ranges for open or remote work positions in the state. California, Connecticut, Maryland, and Washington already have laws on the books mandating companies provide pay ranges to candidates who specifically ask for them or during an offer. The Colorado law takes it one step further by making companies proactively disclose the minimum and maximum salary as part of the job posting.

Though Colorado is the first state to make salary ranges available to any applicant, it won’t be the last, says Benjamin Frost, a solutions architect in Korn Ferry’s Products business. “The wind is clearly blowing in the direction of this becoming commonplace,” he says. Investors and employees want more transparency from companies, particularly around diversity, equity, and inclusion. Moreover, supporters argue providing salary ranges up front can help companies better match candidates to positions, making the hiring process more efficient.

But some companies, already under increasing wage pressure brought on by the hiring boom, apparently don’t see it that way: some recent job listings have specifically excluded candidates who live in Colorado from certain open positions. Frost says the move is less about Colorado’s talent pool and more about losing negotiating power with talent overall. “Excluding Colorado workers seems like a decent price to pay for not needing to disclose salary ranges at the moment,” he says. By contrast, he says, if and when a state like New York or California takes the step toward proactive disclosure, it will be a much bigger deal: “It is about talent pools and where companies can and can’t afford to close off access.”

Human resources leaders also argue that proactively providing pay ranges will actually make the recruiting process less, rather than more, efficient. For one, designating a salary range is tricky business. “You don’t want to limit the talent you get to look at,” says Andy De Marco, Korn Ferry’s vice president of human resources for the Americas. At the time, the range can be so broad that it could become arbitrary. A span of $100,000, for instance, expands the candidate pool and skills spectrum so much that it could slow down recruiting and, by extension, operations.

Excluding applicants from Colorado for now might give companies more time to clean up their pay practices, says Tom McMullen, a Korn Ferry senior client partner and a leader in the firm’s Total Rewards practice. He notes that posting pay ranges could expose internal inequities leaders aren’t yet prepared to deal with. For instance, suppose a company posts a range of $80,000 to $100,000 for a role, but an existing employee is still earning the minimum number after five years with the firm. “How upset will that employee be after seeing this posted range?” asks McMullen.

To be sure, optics are a huge part of the disclosure calculus for leaders. McMullen says companies are running out of time to institute fairer pay practices on their own before regulators push them to do so. “Employees will give their leaders credit for making these changes proactively,” he says.