APRIL 29, 2017

Welcome to the Health Care Compensation Update eNewsletter
Editor: Benjamin R. Grant

Top Healthcare Executive Compensation Issues in 2017
While the names and faces in government change, healthcare system compensation committees are still in the business of developing executive compensation arrangements. Many directors are justifiably concerned that Washington's potential move away from the Affordable Care Act (ACA) will also constitute a move away from value-based care, and diminish their ability to measure real success. Whether ACA is to be repealed, replaced, or changed, most in the industry agree that some form of value-based care is the only way to control spiraling health care costs, and is still the way forward. Additionally, the move from fee-for-service to fee-for-value in Medicare has been heavily influenced by the Medicare Access and CHIP Reauthorization Act (MACRA), which was strongly supported in both houses of Congress, and appears to be in place long-term. So, while the outlook in the health insurance marketplace continues to be blurry, the care delivery side of the ACA, and its ongoing movement towards population health, seems to be permanent. Despite this uncertainty in the marketplace, here are five areas within healthcare executive compensation where boards can push forward effectively in 2017:

  • Incentive Goals and Planning for Flexibility,
  • Board Evaluations and Succession Planning,
  • Compensation Committee Oversight,
  • Supporting Innovation and
  • Revisiting the Definition of Your Peer Groups.

4 Takeaways from the HR Healthcare 2017 Director's Report
Healthcare human resources leaders continue to face challenges in adapting to today's changing healthcare demands. For example, with the Affordable Care Act (ACA), hospitals and other health systems are now held at higher standards of accountability in delivering quality patient care. However, according to the HR Healthcare 2017 Director's Report, regulatory and federal changes aren't the only pressures on healthcare HR -- changing national workforce demographics require more aggressive talent acquisition, thoughtful employee engagement programs, and nurturing leaders to take on more management roles. As you search for ways to overcome your everyday challenges, here are the latest key issues and trends healthcare HR leaders should know from the 2017 Director's Report:

  • Talent Acquisition Concerns,
  • Leadership Development,
  • Employee Engagement & Happiness and
  • Compliance & Regulatory Changes

The Highest-Paying Jobs In Healthcare In The U.S.
With members of the baby boomer generation entering retirement and living longer lives than those that have come before, entering a career in the healthcare industry offers a solid employment outlook for those in the industry. Advances in healthcare tech and the increase in health coverage due to seven years of the Affordable Care Act haven't hurt business either. But within the healthcare realm, which are the positions that pay the most? To answer that question we look to a recent data-pull report from LinkedIn.com, a massive communications network and job search platform with more than 500 million members worldwide. The report highlights the positions in healthcare that pay the most, on average. Check out the slideshow of the top-15 @ https://www.forbes.com/pictures/feki45eiigd/

Medicine's Top Earners Are Not the M.D.s
Through the release of Medicare's physician payments cast a spotlight on the millions of dollars paid to some specialists, there is a startling secret behind America's health care hierarchy: Physicians, the most highly trained members in the industry's work force, are on average right in the middle of the compensation pack. That is because the biggest bucks are currently earned not through the delivery of care, but from overseeing the business of medicine. The base pay of insurance executives, hospital executives and even hospital administrators often far outstrips doctors' salaries, according to an analysis performed for The New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital C.E.O. and $237,000 for a hospital administrator, compared with $306,000 for a surgeon and $185,000 for a general doctor. The proliferation of high earners in the medical business and administration ranks adds to the United States' $2.7 trillion health care bill and stands in stark contrast with other developed countries, where top-ranked hospitals have only skeleton administrative staffs and where health care workers are generally paid less. And many experts say it's bad value for health care dollars.

MACRA to Cut Physicians' Medicare Revenue, Study Says
A law hailed by organized medicine as stabilizing Medicare reimbursement will slow the rate of growth for the program's spending on physician services, saving anywhere from $35 billion to $106 billion over 15 years, according to a new study by RAND in the current issue of Health Affairs. Prorated over 15 years, the relative drop in revenue under the Medicare Access and CHIP Reauthorization Act (MACRA) isn't nearly as devastating as what could have transpired under Medicare's former reimbursement system. And with plenty of uncertainty surrounding MACRA's implementation, the RAND forecast may be too fuzzy to bet on, medical societies note. Still, the study comes across as more bad news for physicians feeling beaten down by third-party payors.


A State-by-State Breakdown of the Striking Gender Gap in Doctors' Pay
According to a new report by the social media site Doximity, pay for female doctors varies widely, though one thing remains consistent -- women are always paid significantly less than men. The report reveals that Among the report's findings: (1) Nationally, female physicians make an average of 26.5 percent, or $91,000, less than men. (2) Women are paid less in every city and every specialty. Female neurosurgeons are paid about $90,000 less per year on average. In vascular surgery the pay gap is $89,000 a year, and it's $76,000 among cardiologists. (3) In several cities, the pay gap is 30 percent or more, including Charlotte and Durham, N.C., Orlando, Fla., and Pittsburgh. Five other cities have a 29 percent gap.

Featured Webinar: 5 Common Background Screening Mistakes Made During the Hiring Process
Tuesday, May 9, 2017
1:00pm ET, 12:00pm CT, 11:00am MT, 10:00am PT
(60 minute webinar)

Register Now!
Background checks are a common - and often required - element of any health care organization's hiring process. However, a tidal wave of new laws and regulations in the industry, and an onslaught of FCRA violations create uncertainty for many employers on how to ensure that their hiring processes are in compliance. In this webinar, Certiphi Screening's general counsel Alexander Erlam and associate general counsel/director of compliance Sadeq Khan explore five of the most common compliance mistakes employers make during the hiring process regarding background screening. Examples include missed red flags on the job application; "Ban the Box" and the criminal history question; FCRA disclosure and authorization forms; employment drug screening; and complying with FCRA requirements around the adverse action process.

Average Salary of Jobs in Healthcare

Jobs in healthcare continue to top lists of most stable, recession-proof, lucrative and flexible careers. From nursing to lab work and physical therapy, nearly everyone knows that our nation’s ill and aging population is creating an ever-growing demand for health services and support. What kinds of jobs are expected to grow? According to the Bureau of Labor Statistics (BLS), the number of registered nursing jobs in physicians’ offices is expected to increase by a whopping 48 percent by 2018. The number of physical therapy assistants working will jump up by 35 percent between 2008 and 2018. And, on the business end of healthcare, the number of medical and health services managers should grow 16 percent. There are many more jobs beyond these three, such as medical transcriptionists, radiology technicians, lab technicians and more that will be in greater demand in 2020. If you work in the healthcare industry and are involved in the hiring and management of healthcare workers, below we have collected a list of some median annual and hourly salary information from our database to help you review your compensation decisions in this competitive environment.

See How 7,700 HR Leaders, Executives and Comp Pros Are Approaching Pay this Year

In PayScale's eighth annual Compensation Best Practices Report, we touch on everything from compensation budgets to variable pay to talent retention to shed light on what organizations are focusing on in 2017 as it pertains to compensating employees. Learn about: Top comp priorities and concerns for orgs in 2017, The disconnect between employee and employer sentiment around pay, and How the most successful companies pay differently.

For a complimentary PayScale benchmark analysis for a position of your choice, please email BenG@payscale.com.

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Health Care Compensation Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentations and regularly updated news and key resources on major health care issues such as pay for performance, bundled payments and MACRA. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.


Benjamin R. Grant