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Healthcare Budgets for Pay Increases Continue Dip in 2010

John Commins, for HealthLeaders Media, May 26, 2010

Pay increase budgets have fallen to 2.5%, down from 3% in 2009. Little change is expected over the next year, as healthcare organizations predict only a slight uptick in 2011 to 2.7%, according to the new 2010 Compensation Data Healthcare survey.

"With a slow economic recovery expected, healthcare organizations continue to make conservative compensation choices," said Amy Kaminski, director of marketing for Compdata Surveys, a compensation and benefits 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."

Pay increase budgets vary within the industry, as critical access hospitals and physician clinics report the highest budgets, 2.8%. Home care respondents follow at 2.6%. Hospitals and rehabilitation facilities reported pay increase budgets of 2.5% and 2.3%, respectively. Behavioral healthcare had the lowest pay increase budget, 1.7%.

Physician clinics are projecting the highest pay increase budget in 2011 at 3.1%, with behavioral healthcare projecting the lowest, 1.8%.

The survey results show pay increase budgets vary by state. Arizona and Nebraska reported the highest pay increase budgets at 3.1%, closely followed by Nevada and Washington at 3%. Respondents in New York and California report pay increase budgets of 2.8% and 2.7%, respectively. Healthcare organizations in Minnesota had the lowest pay increase budget, 2%.

The survey contains data on more than 200 industry-specific job titles and more than 250 benchmark titles ranging from entry-level to top executives. Data was collected from more than 1,200 healthcare employers across the country.


John Commins is a senior editor with HealthLeaders Media.

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