Hospice administrator salaries are on the rise

Increases represent industrywide norm

Hospice administrator salaries continue to increase, according to Hospice Management Advisor’s 2000 salary survey of its readers. The majority of HMA readers — mostly administrators, reported increases of 1% to 6% compared to the previous year.

Of those who responded to the survey, one out of every six people said they received a pay increase in the past two months. Of those who indicated raises in salaries, 32.7% were in the 1% to 3% range, and 28.8% were in the 4% to 6% range.

In June, 52 HMA readers responded to the salary questionnaire, which also looked at characteristics of the hospice and hospice administrators. While the small sample does not represent a statistically significant study, it does offer a glimpse of where HMA readers stand in comparison to their colleagues.

The majority of readers, 57.8%, indicated that their salaries were more than $65,000, with 25.6% falling between $65,000 and $74,999. About 15% of HMA readers’ salaries this year ranged between $65,000 and $69,999, and 10.3% fell into the $70,000-$74,999 category.

The increases represent a norm in the industry, says Lisa Spoden, PhD, MBA, executive vice of Strategic Healthcare, a hospice consulting firm in Columbus, OH. But salaries themselves were a bit harder to pin down.

"We see a wide variety of salaries," says Spoden, whose company has done salary surveys of Ken-tucky hospices. "A lot of it has to do with the size of the hospice, the history, and its affiliation."

HMA readers also showed a wide variety of salaries. While one quarter of readers’ salaries were concentrated in the $65,000 to $75,000 range, nearly 6% reported salaries in excess of $155,000, and 22.8% reported salaries between $40,000-$49,000.

The titles associated with those who reported their salaries to HMA were fairly consistent, representing top hospice administrators. Nearly 77% of respondents indicated their titles were either director of hospice (53.8%) or administrator (23.1%).

Spoden says administrators’ salaries are likely driven by organizational characteristics. For example, hospital-based and for-profit hospices are likely to be paying administrators on the higher end of the pay scale, while smaller, nonprofit hospices are on the other end of the spectrum. The hospice’s history may also play a role, Spoden says. Organizations whose roots date back to volunteer hospices may also pay on the low end. "It could be that the salary was never competitively set."

Salary surveys done by Hospital & Healthcare Compensation Service, an Oakland, NJ, company that tracks salaries in the health care industry, show that hospice administrator salaries are on the increase, as well. 1999-2000 figures show a median salary of about $59,850 per year, says Rosanne Cioffe, director of reports for Hospital Healthcare Compensation Service. That represents a 6.8% increase from the 1998-1999 median salary of $56,035.

The average salary for hospice directors in 1997-1998 was $56,035, up 4.32% compared to the previous year’s average of $53,713, Cioffe says.

The report, published by the Hospital and Healthcare Compensation Service and the Hospice Association of America, shows that directors’ salaries have been increasing steadily for the past five years. Since 1995, directors’ average salaries have increased from a median of $48,309.

Researchers have noticed that hospice director salaries increased at a higher rate than their home care counterparts.

"In discussion with providers, we found that because home care has had some terrific problems, some are getting out of home care and going into hospice," says Cioffe. "This is because home health has had terrific problems with reimbursement the last couple of years."

Hospital and Healthcare Compensation Service expects to release its latest hospice salary report for 2000-2001 in November, Cioffe says. She expects the salary trend to continue, with 4% to 5% annual increases.

In 1998, the company also looked at hospice staff salaries. Wages for nurses and nursing aides were competitive compared to similar jobs in other health care settings. The average hourly rate a hospice RN in 1998 was $17.75, while LPNs earned an average of $12.70. Compared to their nursing home colleagues, hospice nurses, on average, earned $0.87 more per hour. On the other hand, aides in hospices earned an average of $0.18 less per hour.

The median home care nurse’s hourly rate was $0.49 per hour more than a hospice nurse, and home care nursing aides had an average hourly rate that was $0.30 higher than hospice nursing aides. Hospice nurses earned an average of $17.75 per hour while home care nurses made an average of $18.24.

Compared to the previous year, the current difference represents a small step to closing the gap. In 1996, hospice nurses earned an average of $0.55 per hour less than home care nurses. In 1997-1998, the average hospice nurse’s hourly rate was $17.30, while the average home care’s hourly rate was $17.85.

The competitive salaries and wages help contribute to the stability of many hospices. As a whole, the hospice industry reported turnover rates lower than the home health sector. The position with the highest turnover in hospices was nursing aides. The report said one-quarter (25.5%) of nursing aides left their position in 1998. The lowest turnover rate was seen in respiratory therapists, which had a turnover rate of 14%.

The current salaries that administrators are making represent more than 13 years of experience in the health care industry, the HMA survey showed. One-third of administrators had held their current positions or similar ones with other hospices. Thirty-six percent of respondents said they have more than 25 years of experience in health care. Four out of 10 respondents said they have between 13 and 21 years of health care experience.

Nineteen percent of hospice administrators have held their positions or similar ones for four to six years; 11.2% for seven to nine years; 13.5% for seven to nine years; 13.5% for 10 to 12 years. The survey also pointed to a new batch of hospice leaders. The survey showed that 21.1% of HMA readers have been in their current job for one to three years.

Readers indicated that their hospices are growing in the number of employees (59.6%). But Spoden says this is not due to increases in referrals, but rather a likely product of increasing regulations. "Hospices are having to deal with increased regulations," Spoden says. "All of those external forces create a need for more people. Hospices are just becoming more bureaucratic."