Healthcare sees smaller salary bumps with reform uncertainty

Amid market pressures and health reform uncertainties, healthcare salary increases appear to be slowing down, according to the Hay Group CEO compensation study, released yesterday.

For instance, hospital CEO salaries saw a 3 percent bump in 2012, down from a 5 percent increase last year. Similarly, nonprofit integrated health system CEOs received a median 3.2 percent increase to their base salaries this year, below a 4 percent boost last year.

The data showed mixed results for healthcare employees. Integrated health systems reported a 2.9 percent boost to employee median base salary, a slight drop from 3.0 percent last year. Meanwhile, hospital employees saw a 2.4 percent increase to their median base salary, a jump from 2.3 percent in 2011.

Nurses also are taking home fatter paychecks this year, with a 2.5 percent pay increase in both base salary and total cash, compared to 2.0 percent last year.

"Uncertainty about the economy, the constitutionality of the Affordable Care Act and the upcoming presidential and Congressional elections were factors that led healthcare organizations to approach base salary adjustments with a certain amount of caution in 2012," Jim Otto, senior principal in Hay Group's Healthcare Practice, said in a statement.

However, he noted that healthcare organizations still rely on hefty pay packages to attract and retain top-performing employees--a common defense used by hospitals and health systems to justify rising compensation.

For example, two University of Michigan Health System executives received the highest salaries out of all U-M employees last year, demonstrating an "investment in our leadership, faculty and staff," according to university officials. And Cincinnati Children's Hospital Medical Center handed out multimillion-dollar paychecks, noting that talent comes with a price.

To learn more:
- here's the study announcement
- check out the salary plans by industry