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Healthcare Staffing, Recruiting a Major Problem for Hospitals
Healthcare staffing remains a problem for hospitals, with almost 31 percent reporting that they cannot find enough candidates to fill open positions, a recent survey of over 200 hospital C-suite executives, administrators, and human resources leaders uncovered. The survey, conducted by the Massachusetts-based staffing firm Leaders for Today, also showed that hospitals are not finding enough high-quality candidates to fill healthcare staffing gaps. Almost one-quarter (23.9 percent) of respondents said that their hospital has a quick turnaround for filling positions, but not all the candidates are qualified to do the job. Hospitals are finding that it takes months to fill open positions. Only slightly more than 25 percent of leadership positions are being filled within three months. To fill managerial positions or above, most hospitals (39 percent) wait four to six months, and another 31 percent wait seven to twelve months. "When vacancies remain high, the ability to safely and profitably deliver care becomes more difficult," researchers stated. "Instituting a more efficient surgery schedule, lean programs or a quality/safety initiative becomes increasingly challenging when key positions are left unfilled or the leader is so new he/she can barely find the way to the cafeteria."
Nursing Shortage to Take Toll on Hospital Profitability
Two of the three top challenges facing hospitals this year are coming together to give hospital CEOs one big headache. A new report from Moody's Investors Service said the ongoing shortage of nurses will exert downward pressure on hospital profit margins for the next three to four years. Citing figures from the U.S. Health Resources and Services Administration, Moody's said growth in the supply of registered nurses (RNs) will fall short of the growth in demand for RNs by 340,000 by 2025. As a result, hospitals will be spending more to attract RNs from a smaller pool of qualified applicants. "In the interim, hospitals are employing various strategies to attract and retain nursing talent--including increased compensation, sign-on bonuses and attractive fringe benefits--all leading to increased costs and margin pressure," Moody's said. Hospitals' labor costs also will go up because they will be forced to spend more on nurses from temporary staffing agencies, according to the report.
Health Insurer CEOs See Some Significant Pay Bumps in 2017
The paychecks of most publicly traded health insurer CEOs increased in 2017. Companies' preliminary proxy statements also give a first look at what recently hired CEOs' pay looks like. Anthem President and CEO Gail Boudreaux, who took the reins from Joseph Swedish in early November 2017, made about $2.2 million for part of last year. Long Beach, Calif.-based Molina Healthcare's new CEO, Joseph Zubretsky, made considerably more than Boudreaux, although both executives entered their new roles in November. Zubretsky's total compensation was $19.7 million, while his realized pay was $4.2 million, which mostly came from a $4 million sign-on bonus, according to the company's preliminary proxy statement. Cigna CEO David Cordani's pay totaled $17.6 million, an increase of 15.2% over 2016 thanks to a bigger bonus in exchange for Cigna meeting its financial goals, the Bloomfield, Conn.-based company said in its preliminary proxy statement.
Non-Profit Healthcare Executive Compensation Faces a New Excise Tax
In all of the conversation around the new tax law and its impact on executive compensation and the 162(m) rule, one interesting aspect may fall under the radar: the new law imposes a 21% excise tax on all compensation above $1 million paid to non-profit "covered employees." This may prove to be a challenge in the healthcare industry where almost 60% of registered hospitals in the U.S. are designated as non-profit. The excise tax will further diminish the ability of non-profits to compete for top executive talent. But while inconvenient and budget-constraining, we believe this new law should have little or no impact on the continued movement of healthcare boards towards variable, performance-based compensation. There are two high-level reasons the industry should maintain its growing reliance on leveraged pay-for-performance incentive compensation programs. First, regardless of tax laws, there is an increasing need for provider organizations--both for-profit and not-for-profit--to meet or exceed critical CMS-related quality and efficiency criteria to avoid reductions to already diminished reimbursement rates. Second, the demand for highly effective leaders who can succeed in an environment of diminishing reimbursements and other challenges far outstrips the supply of qualified candidates.
Health Care Executive Compensation Considerations in the Wake of Major Tax Reform
Under the newly signed legislation, tax-exempt entities such as qualifying hospitals and health systems must pay a 21 percent excise tax on any remuneration exceeding $1 million to all covered employees after Dec. 31, 2017. A "covered employee" is a current or former employee who was among the five highest compensated employees in a tax year beginning after 2016. This means organizations could have up to 10 covered employees in 2018 if the top five earners for that year are completely different than 2017. Covered employees are covered forever, and a former covered employee who receives post-termination compensation in excess of $1 million per year is subject to excise taxes. These taxes are paid by the organization, which would still be subject to potential excise taxes for terminated covered employees as long as they are still receiving taxable pay. It is essential for providers to understand that "covered employees" must be identified at each entity within a given organization -- the entities cannot be aggregated for this purpose. Organizations that filed multiple 990 tax forms must pay excise taxes on any covered employees with pay in excess of $1 million for each separate entity. Remuneration subject to the excise tax includes all compensation an employee received during a calendar year, including pay from affiliated or related organizations. However, Ms. Field noted qualified retirement payouts are excluded and there is an important exception for providers to consider. "The excise tax excludes any remuneration paid from qualified retirement plans and any payments to licensed medical professionals for the performance of medical services," Ms. Field said. "If you have a chief medical officer who's a physician but they're receiving administrative pay as opposed to pay for medical services, that remuneration would be subject to the excise tax. However, if that individual receives half their compensation by actually providing medical services, that portion of the pay would not be included."
9 Statistics on Executive Pay Based on Size, Type of Hospital
Here are nine statistics on hospital and health system executive pay, listed according to the median increase in total cash compensation for each executive from 2016-17.
Independent Health
Systems:
- CEO -- 4.6 percent;
- CFO -- 4.6 percent;
- COO -- 4.9 percent.
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Independent
Hhospitals:
- CEO -- 3 percent;
- CFO -- 3.2 percent;
- COO -- 2.7 percent.
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System-owned
Hospitals:
- CEO -- 1.8 percent;
- CFO -- 2 percent;
- COO -- 2.9 percent.
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Infographic: Health Care Executive Compensation Insights
20 Statistics: Department Chair + Physician Cash Compensation by Specialty
Here are the mean total cash compensation rates for department chairs and staff physicians in 2017 across 10 specialties.
- Internal medicine
- Department chair: $611,784
- Staff physician: $262,917
- General psychiatry
- Department chair: $483,815
- Staff physician: $251,779
- General surgery
- Department chair: $777,539
- Staff physician: $413,741
- Family medicine
- Department chair: $472,135
- Staff physician: $255,647
- General pediatrics
- Department chair: $437,690
- Staff physician: $243,647
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- Anatomic and clinical pathology
- Department chair: $594,460
- Staff physician: $343,145
- Obstetrics and gynecology
- Department chair: $556,253
- Staff physician: $351,119
- Anesthesiology
- Department chair: $618,237
- Staff physician: $394,259
- Diagnostic radiology
- Department chair: $726,935
- Staff physician: $479,609
- Emergency medicine
- Department chair: $499,540
- Staff physician: $338,329
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How Much Should Clinicians Be Paid for Being On Call?
Pay for "taking call," as it is referred to in the medical profession, varies tremendously, from nothing extra over and above one's salary to $4500 per 24 hours, for neurosurgeons who are "on call" for a trauma center. One company that surveys hospitals places the average per-hour payment for on-call services at $12.50 for primary care, $30.73 for most specialties, and $83.33 for neurosurgeons on call for a Level I trauma center.
SAVE THE DATES
ACHE 2018 Congress on Healthcare Leadership
March 26 - 29, 2018
Chicago, IL
HUMAN RESOURCES EXECUTIVE TECHNOLOGY CONFERENCE
September 11 - 15, 2018
Las Vegas, NV
ASHHRA 54rd ANNUAL CONFERENCE AND EXPOSITION
Meeting the Challenge and Making a Difference
September 15 - 19, 2018
Pittsburg, PA
SHRM18 ANNUAL CONFERENCE AND EXPOSITION
June 17 - 20, 2018
Chicago, IL
64rd ANNUAL EMPLOYEE BENEFITS CONFERENCE
Sponsored by Int'l Foundation for Employee Benefit Plans
October 14 - 17, 2018
New Orleans, LA
FEATURED WEBINARS
ASHHRA Webinar: Millennials Leading Health Care Transformation (Hosted by AHA)
Date: Wednesday, March 21, 2018 1:00 - 2:00 pm CT
Presenters: Kristi Caldararo, associate administrator of Clinical Services Thomas Jefferson University Hospitals, and Joseph Anton, vice president of Clinical and Support Services at Thomas Jefferson University Hospitals
Millennials view the world differently than preceding generations. While often labeled disloyal, entitled and needy, they are in fact creative, open to change, tech-savvy, passionate about work that makes a difference, risk takers and collaborative. This webinar, featuring speakers from AHA's 2017 Leadership Summit, will showcase practical techniques leaders can use to engage millennials to leverage their strengths to accelerate organizational change. Hear about a successful and complex transformational initiative at Jefferson that resulted in improved organizational performance in six months through the deployment of 19 comprehensive action plans. Learn how they built cross-generational relationships among leaders, how millennials were supported to lead such a large-scale project and the lessons learned when working with millennials.
Registration: Register online
Minority Representation in Leadership & Governance: Why It's Important
Date: Tuesday, March 27, 2018, 10:00 - 11:00 am CT
Presenter: Cynthia Washington, president and CEO of Institute for Diversity and Health Equity (IFDHE)
Data shows that the minority population is steadily increasing. In 2010 minorities represented 35 percent of the population; that number is expected to rise to 54 percent by 2050. This trend will undoubtedly impact the health care workforce. An increase of diversity in leadership and governance should be reflective of the communities and patient populations it will serve, as it has been proven to directly affect care. Join this webinar to learn how minority representation in your organization's leadership is a must for your health care workforce.
Registration: Register online
Price: $29 (Members), $79 (Non-members)
Eligible Certification Credits: CHHR (1), SHRM (1), HRCI (1)
PROFESSIONAL CERTIFICATION
ASHHRA offers the Certified in Healthcare Human Resources (CHHR) professional designation. Nationally recognized, CHHR is the premier credential based on sound assessment that delivers both internal and external rewards. The CHHR signifies: A commitment to career advancement; Accomplishment and expertise within the health care HR community; Knowledge of the health care environment and health care workforce needs and Ability to adapt this knowledge to their individual health care organization's needs and goals
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