In the last year, the number of healthcare organizations with a minimum wage of $15 or higher has skyrocketed, according to a recent survey from consulting firm SullivanCotter.
From 2022 to 2023, the percentage of healthcare providers with an internal minimum wage of more than $15 per hour went from 15.6% to 29.1%. Additionally, 90% of providers have an internal hourly minimum wage higher than the federal, state and local wage.
The survey reflects a wider trend. Nearly 10 million workers received a raise after minimum wage increases went into effect Jan. 1 in 22 states. Almost 900,000 unionized U.S. employees secured double-digit pay increases throughout the year, according to data from CNN.
A number of health systems have made moves to increase their minimum wage for employees in the last year to ensure retention. Nurses in particular have seen massive wage increases, including a 37% increase to the average base wage at Oregon Health & Science University in Portland and an average raise of 40% over four years for employees at Providence Cedars-Sinai Tarzana (Calif.) Medical Center.
ASCs often struggle to compete with the deep pockets of hospitals, making labor costs and retention one of the biggest obstacles ASCs faced in 2023. More than 68% of facilities reported having a more difficult time recruiting experienced operating room nurses in the last 12 months, according to a 2023 survey from OR Manager. Additionally, the average percentage of operating revenue ASCs spent on paying employees was 21.3%, according to a report from VMG Health. The same report found that highest spenders paid 29% of their earnings to compensate staff.
Some leaders have said these pressures are easing, however.
"Although there are signs that the overall labor market nationwide is easing, there are two factors that make it difficult for me to tell for sure," Alfonso del Granado, administrator and CEO of Covenant High Plains Surgery Centers in Texas, told Becker's. "First, healthcare labor has its own challenges that have been worsening over the past decade, and these decouple it somewhat from the general labor market. And second, my experience is very regionalized, as my centers are at a geographic remove from major population centers, which makes it hard to import labor, but also ensures a reasonably steady local supply."
Other leaders, including Ira Richterman, MD, an orthopedic surgeon at Canton, Ohio-based OrthoUnited Spectrum, have found that ASCs are able to maintain staff at a lower pay rate in return for work-life balance considerations.
"Working during the day and no nights, weekends or holidays certainly represents great value," Dr. Richterman told Becker's. "Hospital systems have created an unsustainable pay scale escalation. These overinflated labor costs are having detrimental consequences to their financial survival."