https://www.healthcaredive.com/news/advocate-aurora-raising-minimum-wage-to-15hour/543378/

Dive Brief:

• Advocate Aurora Health, a 27-hospital non-profit health system covering Illinois and Wisconsin, announced it will increase its minimum wage to $15 an hour by early 2021. The system plans to make the increase in steps, reaching $13 an hour in the middle of next year and $14 in early 2020.
• In a message to staff, Kevin Brady, chief human resources office at Advocate Aurora, said the pay raise “aligns with our longstanding commitment to be market competitive and remain a place that attracts and retains top talent.”
• It’s the latest in a growing list of health systems that are raising minimum wages. Allegheny Health Network and UPMC also set targets of $15 an hour this year.

Dive Insight:

Health systems are making these moves as they struggle to find employees in the competitive job market. Labor costs remain a major issue for hospitals and have led to nursing strikes over the past two years.

A recent Navigant analysis predicted hospitals and health systems will continue to see higher labor costs in the coming years as administrators raise wages to tackle shortages. Total employment compensation for the industry increased 2% in 2017 and 2.3% the previous year, according to the Bureau of Labor Statistics employment cost index.

Many states are also moving forward with minimum wage increases, including some that have increased pay to $15 an hour.

Brady said the health system’s goal is to be a “destination employer where our team members feel valued, have opportunities for growth and connect with our values and purpose-driven culture.” The decision will improve the workplace and, in turn, make patients “feel this is the best place to entrust their health and wellness,” he added.

Brady said the health system is investing in higher pay while still facing shrinking reimbursements and rising pharmaceutical costs. “Continuing to ensure that our team members have access to rewarding jobs with comprehensive benefits, competitive wages and an engaging work environment will not only strengthen our workplace, it will strengthen our marketplace and most importantly, enhance the quality of life in our communities from Green Bay to Bloomington Normal and everywhere in between,” he wrote to staff.

The Downers Grove, Illinois-based health system was created earlier this year with the merger of Advocate Health Care and Aurora Health Care. The system experienced a 20% drop in operating income in the first six months. The decrease was related to added costs connected to the merger and a new EHR.