2009 Salary Survey Results
ED manager salaries remain stagnant — experts say doctors faring better than nurses
Generally when we review our annual ED Management Salary Survey for defining trends, we see patterns emerging by reviewing the results in several categories. And while we still went through that process this year, even a quick glance at the results of the 2009 ED Management Salary Survey showed that one statistic jumped off the page.
In the 2008 EDM Salary Survey, 8.2% of the respondents indicated no change in their salary; in the 2009 EDM Salary Survey, that number more than quadrupled to 36.96%.
Why are so many more hospitals holding the line when it comes to salaries? Observers say it's a combination of growing financial pressures and a favorable supply-demand ratio, especially when it comes to nurses. "The salary numbers in the survey are definitely in line with what's happening," says Diana S. Contino, RN, MBA, FAEN, senior manager of health care with Deloitte Consulting in Los Angeles. "We're continuing to see cost pressures on hospitals and health systems." These pressures, she notes, are coming from the increases in labor and capital expenditures needed to meet the American Recovery and Reinvestment Act of 2009 (ARRA); the related HITECH Act of 2009, which includes additional Health Insurance Portability and Accountability Act (HIPAA) requirements; and the general tightening credit market.
From the hospital's perspective, Contino summarizes, the supply has increased and demand has decreased. "At the same time, profit margins are stagnant or have declined," she adds.
"We're also seeing many clients significantly increase their expenditures for EMR [electronic medical record] software, implementation, support, and data security." These combined efforts, she says, can cost hundreds of thousands of dollars.
"That being said, the majority of nurse managers are not seeing a significant increase in compensation," Contino says. This stagnant salary is very typical in the current job market, she explains. "The unemployment rates are so high, and many nurses have gone back to work because spouses or significant others have lost their jobs," she observes. "Many of these nurses were working per diem or part-time hours and have accepted full-time positions. Others who weren't working have gone back to part- or full-time positions."
Trends among ED physicians and managers are similar, says Michael D. Bishop, MD, president and CEO of Unity Physician Group, a Bloomington, IN, firm that staffs hospital EDs in Indiana and Kentucky and owns and operates urgent care centers in Indiana. "I know of several [ED physician] groups that have taken 15%-20% decreases," he notes. "If you're a relatively small group — one, two, or three hospitals — and you are in the Midwest, then there's a reasonable possibility there have been some decreases."
In areas where there are shortages of qualified applicants, however, ED physician managers can pressure hospitals, especially in the current financial environment. "The number of indigent, uninsured, underinsured, or ED copays have gone up, or the number of Medicaid patients has gone up and states can't pay as much," Bishop notes. "The ED may have once been viable on a fee-for-service basis, but not anymore, and the doctors can go to the hospital and say, 'You either subsidize us, employ us and our group, or we have to go someplace else.'" What the hospital figures our real quickly, he says, is that it doesn't matter whether they deal with this group or another group. "The market is the market." Bishop asserts.
Numbers are discouraging
The rest of the 2009 EDM Salary Survey results round out the bleak picture. The number of respondents who saw salary decreases actually dropped slightly, from 3.28% in 2008 to 2.15% in 2009. However, in the rest of the categories, there were decreases across the board. Those receiving 1%-3% increases dropped from 49.18% to 39.13%; those receiving increases of 4%-6% dropped from 27.87% to 19.57%; and those lucky few receiving 7%-10% increases dropped from 6.56% to 2.17%.
The number of managers in the highest income levels also dropped when compared with the 2008 EDM Salary Survey results. For example, in 2008, 18.03% were in the $90,000-$99,999 range, compared with 14.89% who responded to the current survey. Those between $100,000 and $129,000 also fell, from 27.87% to 21.28%. The number of respondents making $130,000 fell dramatically, from 21.31% to 10.64%. While those making between $70,000 and $79,999 also decreased (11.48% to 8.51%), those making $60,000 to $69,999 increased, from 3.28% to 14.89%.
For the 2009 report, 580 surveys were disseminated. There were 47 responses, for a response rate of 8.1%.
'There appears to be more pressure on nurses' salaries than on emergency physician salaries," notes Contino. "Some of this is related to supply vs. demand."
There are some "difficult-to-recruit" geographical areas that continue to see shortages of emergency physicians, she observes. "This has continued to keep pressure on hospital subsidies — administrative stipends — and physician salaries," Contino explains.
In addition, she says, "There are not as many open positions — both staff and manager — working for temporary staffing firms. There's definitely more competition for those positions." The firms that place interim directors have seen declines in requests, she adds. "Many may not hire an interim director when they can fill the position with a permanent employee," notes Contino.
However, there often is more than meets the eye when it comes to compensation for physician managers, says Bishop. "It's always difficult when you talk to emergency physicians and ask them if they took a cut," he notes. "Their 'W-2s' may have increased, but instead of working 16 shifts a month they are now at 18 or 20; so on an hourly or daily basis, they may actually be making less money."
"Efficiency" is the watchword in today's economy, Bishop says. "Let's say you have a 20-physician department and they make $100 an hour, and you are going to lose five physicians," he says. "Those that are left may decide they all just want to work harder instead of replacing the five physicians. If they have less coverage per shift to maintain their income, haven't they really taken a pay cut?
Circumstances will not improve any time soon, Contino says. "I don't see a trend of hospitals raising salaries for nurse managers; most likely they will stay the same, and in some cases they will decline," she predicts. In fact, Contino adds, "There are some hospitals and health systems that have already reduced salaries or deferred raises. For example, many of the University of California hospital employees have experienced reductions."
If the economy remains stagnant and cost pressures continue, she says, organizations will look for ways to increase productivity — automate processes and increase self-service options — and decrease labor costs.
This increased emphasis on productivity, along with the shifting realities of the ED environment, add up to even greater pressure for ED managers, says Mike Williams, MPA/HSA, president of The Abaris Group, a Walnut Creek, CA-based health care consulting firm specializing in emergency services.
"There is no ability to control your work, and there are many variables and risks such as EMTALA," says Williams, referring to the Emergency Medical Treatment and Labor Act. And circumstances were particularly difficult recently with the H1N1 flu, he says. "It just provides a much more difficult environment, because some facilities are not willing to put systems in place to help manage these peak loads," he says. Most hospitals want to take the position of "toughing it out" rather than being prepared in advance, he says.
"Part of the problem is that they are not filling those [management] positions with experienced people, but rather organizationally growing people into those positions from assistant directors and charge nurses," Williams explains. "That's not bad in and of itself, but it takes a little foresight. You can't just appoint somebody."
To prepare these people for promotion, he explains, "you need mentoring services, or parallel processes that will enable these individuals to experience difficult situations and to see their reactions — which skills they bring to the table — and offer advice on how the department would ideally be managed." Growing organizationally is a relatively new concept that has been reached by some of his clients who were having difficulty recruiting new talent, Williams says.
Bishop says, "Managers have to do so much more. There's a tremendous amount of work for physician directors of EDs or ED group directors." That work ranges from boarding issues to H1N1, he says. "Flu has the potential to put a whole bunch of sick people in the ED to drive up demand, while at the same time you're trying to get lab work back, get imaging results back, get people moved out of the department, and manage those people who may be potentially infectious," Bishop says.
Williams agrees. "The biggest and largest new trend is responsibility for major emergencies," he says. "Almost every community has a plan for pandemics and catastrophic terror events. There's a fair amount of federal money being spent and it's trickling down, but it's spent mostly on equipment and planning at the community level." For the most part, Williams says, the ED manager must collaborate with the county or state, or the hospital's own "disaster person" — who already had a full-time job. "So, again there are additional burdens," he says.
You still need to perform
Despite the stagnation in salaries, hospitals continue to pressure ED managers to perform, and they continue to link compensation to that performance.
"Nurse managers may be paid a little less, but they will still have to assure their departments and employers that they are meeting performance targets," Contino says. "There won't be any decrease in performance improvement expectations in customer service, satisfaction, and quality measures." As with much of health care and society in general, nurse managers are being asked to do a lot more for less money, and treat higher-acuity patients, she says.
In fact, notes Williams, better performance in those areas will not only help managers earn bonuses, but they actually will help hospitals attract more and better employees. "Hospitals have finally got it. The successful mixture for staff and managers is customer service, employee service, and throughput strategies, and innovators in those areas could make the campus much more attractive," he says. "One of the hottest things in hospitals today is achieving magnet status. It takes in excess of a year, and involves the entire hospital."
Where there is a limited pool of managers and they have choices, especially in urban areas, Williams says, "this is another little 'carrot' that says, 'We are better than the others. We have better throughput and staff education, we're sensitive to customers so there are fewer problems, and we're willing to support you in your role as manager.'" In some cases, say observers, those conditions can mean more than money.