Job growth data not the whole story

Give or take a few meager months, employment in the U.S. healthcare sector has grown throughout the recession.

In the past year alone, total healthcare employment has increased by a quarter of a million jobs.
And this in a climate where national unemployment hovers around 10 percent, the total number of unemployed has risen above 15 million, and the number of long-term unemployed (those jobless for 27 or more weeks) is close to 7 million.

But even in healthcare human resources departments, things are not rosy.

The 2010 iteration of the annual Compensation Data Healthcare survey was released recently, providing a summary of pay data and benefit information from healthcare employers around the United States.

According to the survey, budgets for employee pay increases at healthcare organizations have continued to decline over the past year. The amounts budgeted have fallen to 2.5 percent, down from 3.0 percent in 2009.
So much for the hopes of many healthcare workers who thought the recession might be over and they would be getting raises on the back end.

Compdata Surveys, the Kansas City, Kan.-based organization that compiles the annual survey, predicts that healthcare employers will make “conservative compensation choices” in fiscal year 2011, as the economy will likely recover slowly from recession.

They survey predicts only 2.7 percent of healthcare organization budgets will have funds available for pay increases in 2011.

While cutting overall pay increase budgets, healthcare employers are focusing the largest portion of these budgets on raises for what they deem “key employees,” such as nurses and physical therapists – professions that many hospitals and health systems are constantly seeking to attract.

As you might expect, compensation budgets vary within the industry. Physician-staffed outpatient clinics look the strongest for fiscal year 2011, with budgets for pay increases averaging 3.1 percent. Critical access hospitals and physician practices follow close behind, with budgets for pay increases at 2.8 percent.

Hospitals and rehabilitation facilities have slightly smaller pay raise budgets available, at 2.5 and 2.3 percent, respectively. At the low end on the compensation scale, with the smallest amounts available for pay increases, are behavioral healthcare facilities. These institutions have only 1.7 percent of budgets allocated for raises.
Unless they are nurses or physical therapists, healthcare system employees who kept their jobs during the recession, or took new ones, likely won’t see their salaries increase.

For some employees, simply keeping their jobs is the goal over the next year.

In New York, the 160-year old St. Vincent’s Hospital Manhattan closed for good at the end of April, leaving approximately 3,500 employees to look for work.

While the hospital used emergency loans from the state and other lenders to fulfill payroll obligations, those employees who weren’t union members were in danger of losing health insurance benefits.

The St. Vincent’s experience wasn’t an anomaly. There were 36 mass layoffs at hospitals during the first three months of 2010, only one less than the 37 during the first three months of 2009, according to data from the federal Bureau of Labor Statistics.

The total number of employees affected was less than in the same months of 2009, but not by enough to convince me that the recession is no longer hurting hospitals.

A recent Thomson Reuters survey suggests that Americans' confidence in their ability to access and pay for healthcare is increasing. Perhaps, but how confident can we be that healthcare employers will be able to keep their staffing levels up, and pay their employees what they deserve?