Healthcare Pay Raises Imperiled by Budget Decreases

May 26, 2010    

Original Article: Healthcare Finance News

by: Richard Pizzi

Pay increase budgets at healthcare organizations have continued to decline over the past year, dashing the hopes of many healthcare workers who hoped for raises in 2010.

While some experts have predicted the U.S. economy will begin to climb out of recession this year, the newly released 2010 Compensation Data Healthcare survey results show pay increase budgets at healthcare institutions have fallen to 2.5 percent, down from 3.0 percent in 2009.

Little change is expected over the next year, as healthcare organizations predict only a slight uptick in 2011 to 2.7 percent.

“With a slow economic recovery expected, healthcare organizations continue to make conservative compensation choices,” said Amy Kaminski, director of marketing for Compdata Surveys, a Kansas City, Kan.-based compensation survey data provider. “Although organizations are making cuts to overall pay increase budgets, a larger portion of those budgets is likely being focused on providing the necessary pay increases to retain key employees, such as nurses and physical therapists.”

According to the survey, pay increase budgets vary within the industry as critical access hospitals and physician clinics report the highest budgets, 2.8 percent. Home care respondents follow at 2.6 percent. Hospitals and rehabilitation facilities reported pay increase budgets of 2.5 and 2.3 percent, respectively. Behavioral healthcare had the lowest pay increase budget, 1.7 percent. Physician clinics are projecting the highest pay increase budget in 2011 at 3.1 percent, with behavioral healthcare projecting the lowest, 1.8 percent.

The 2010 Compensation Data Healthcare survey results show pay increase budgets also vary by state. Arizona and Nebraska reported the highest pay increase budgets at 3.1 percent. Nevada and Washington followed close behind at 3.0 percent.

Respondents in New York and California report pay increase budgets of 2.8 and 2.7 percent, respectively, while healthcare organizations in Minnesota had the lowest pay increase budget, 2.0 percent.

The Compensation Data Healthcare 2010 survey collected data from more than 1,200 healthcare employers across the country. The results provide a comprehensive summary of pay data, benefit information and pay practices with an effective date of January 1, 2010.

Original Article: Healthcare Finance News

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