The Great Resignation continues to shape the healthcare workforce.
By Pete Mercer
Compensation has been a hot button topic in the healthcare industry in recent years, mostly in regard to the heavy toll inflicted by the coronavirus pandemic. Healthcare workers have faced innumerable challenges in the last couple of years, ranging from inadequate materials to protect themselves on the front line to the Great Resignation depleting the staffing reinforcements. In an effort to improve retention for healthcare organizations, providers have had to raise the salaries for employees almost across the board.
A recent report from the Medical Group Management Association (MGMA) – the nation’s largest association focused on the business of medical practice management – shows that the salaries and wages of healthcare workers who have worked through the challenges of the pandemic are rising. The 2022 edition of MGMA DataDive Management and Staff Compensation featured data from over 142,000 management and staff positions at 3,406 organizations.
“Today’s surge in demand for workers has created a compensation arms race forcing medical practices to revisit the ways in which they recruit, engage and nurture staff,” said Halee Fischer-Wright, MD, MMM, FAAP, FACMPE, president and chief executive officer at MGMA, in a press release. “To stay competitive, medical practice leaders must stay on the pulse of macroeconomic forces and invest in strategies that create rewarding and fulfilling workplaces. This latest data provides invaluable compensation benchmarks for job titles throughout a medical group practice – from the C-suite to the front desk – to help healthcare practices overcome retention and recruitment challenges.”
Breaking down the data
According to the report, there have been several key trends that MGMA has seen in the healthcare industry in the last few years. Based on the findings from the report, these trends include:
Compensation rising for management
- Compensation for executive management positions has increased by 19.73% from 2019 to 2021
- Those at the senior management level saw a compensation increase of 5.07% between 2019 and 2021.
- General management positions saw a compensation increase of 4.28% from 2019 to 2021.
Compensation rising for nurses
- Compensation differences for nursing positions over the last few years have varied.
- Licensed Practical nurses saw the second biggest jump in compensation of 7.09% between 2019 and 2021.
The data showed that education and experience made a difference in determining compensation, with executive management roles that held a master’s degree reported earning 51% more in total compensation than their counterparts with a high school diploma. Of the nursing staff that saw increases in wages, triage nurses saw the largest increase in median total compensation over the last three years at 13.9% from 2019 to 2021.
The report also showed that the current staffing crisis is significantly impacting productivity levels for providers. Additionally, an MGMA Stat poll from November 2021 found that “30% of medical groups were below their productivity goals for 2021, with many citing a lack of staffing as keeping them from attaining higher productivity.”
What this means for the healthcare industry – long term and short term
“The Great Resignation directly shaped at least the second half of 2021, but even slightly before that,” said Andy Swanson, vice president of Industry Insights at MGMA. Referring to the movement of people resigning from their jobs en masse, due to concerns over COVID policies, a lack of opportunities in their current roles, or low compensation rates, healthcare might have seen more resignations than other industries, but this was a wide-reaching issue that employers were having to deal with.
As more and more waves of people resigned, medical groups were put in the position of having to pay more to keep talent or even recruit new talent to their organizations. But is this an effective method? Swanson said, “The rise in wages is having a detrimental effect on the overall profitability of medical groups.”
“Surprisingly, the smaller groups are withstanding the changes better than large groups. A small pay increase for the front desk employee in a small group goes a long way. In a larger integrated delivery system, even small pay increases at the employee level cost the system large amounts of money because of the sheer number of those staff receiving small increases.”
Part of the challenge that larger organizations are facing is finding temporary staff to offset the staffing challenges at a reasonable rate. Swanson said the larger organizations are using temporary staff to fill these gaps at scale, and those rates are often double or triple the expense of full-time employees.
Additionally, these wage increases may not even have the desired effect in regard to improving retention. “Because most medical groups are providing these roles with higher pay, if an employee is unhappy with their employer, despite recent wage increases, they will likely find a preferred employer willing to pay the same or even slightly higher wages,” he said.
At the moment, most of the medical groups that Swanson has spoken with are just pushing through the wage increases. Because the rates are going up, the medical groups can put more responsibility on certain employees and find efficiencies in other areas.
Swanson said, “Raising performance expectations, even slightly, across large groups of employees does work with some employee groups without burning them out.” For example, coders, billers, and departments like denial management can process more claims with automation that will find more revenue, get earned money into the practice faster and just overall improve the cash flow of the organization. Clinicians don’t have the same flexibility with heightened performance expectations because of the challenging patient volumes and the already high risk of burnout.
For the long term, medical groups are counting on a revenue lift from reimbursements, or a return to less inflationary times, to bring those costs down. Unfortunately, as the U.S. seems to be on the verge of recession, the groups that are leaning on wage increases will either have to close or lower the compensation rates to survive.
Competing for talent and retaining talent with success
For the groups that have managed to stay competitive in the search for talent and retaining talent, Swanson says it boils down to one essential component.
“The groups whose mission and vision of serving patients and their families permeates into the day-to-day culture of the practice are successful at retaining motivated staff. When those characteristics are paid lip service, but day-to-day operating practices run counter to the words, employees see through the veneer into the truth.”
These observations only serve to reinforce the importance of culture and patient care. Putting the customer, or patient, first will likely supersede the other challenges that come with operating a medical group. It’s also important to understand that this isn’t something that can change overnight. It takes work to make any changes to the culture of an organization.
Swanson said, “Constant and long-term focus is necessary to develop or change culture. If it’s not appropriately appreciative of its staff, any short-term based initiative won’t change that reality.”