Healthcare Workers Dissatisfied with Stagnant Pay Raises

Chelsea Rice, June 24, 2013

A trifecta of financial pressures is forcing hospitals to trim salaries and benefits, but by cutting too close, hospitals may be losing their talent pools to more competitive markets.

David Spillers, CEO of Huntsville (AL) Hospital, notified his 8,000 employees last month that in response to the fiscal losses associated with the trifecta of public and private cuts to reimbursements, the Patient Protection and Affordable Care Act mandates, and the federal budget sequester, the hospital was implementing a system-wide pay freeze with no deadline.

In addition to the pay freeze, the hospital increased monthly health insurance premiums by $40 and reduced its annual contribution to employee pensions. The cuts to salary and benefits begin at the start of the hospital's fiscal year, July 1. 

"It is a very challenging time for the healthcare industry. People in our country want all the fabulous service and technology we can provide when a loved one is in need. The problem is no one wants to pay us fairly to provide those services," wrote Spillers in the internal memo.

Spillers isn't the only CEO worried about how the PPACA mandates, reimbursement reductions, and sequestration cuts are "crossing the streams."

In a HealthLeaders webcast last week, another hospital CEO said his organization was entering "the kill zone" of its bottom line. Cuts to reimbursements are coinciding with necessary investments to comply with federal mandates, said Allen Weiss, MD, president and CEO of NCH Healthcare System in Naples, FL.


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