INFOGRAPHIC | Pediatric Organizations: Physician and APP Workforce Trends
Dive deeper into the latest workforce trends and data!
Pediatric hospitals continue to face recruitment and retention challenges for physicians and advanced practice providers (APPs) due to unprecedented labor shortages, pay compression, burnout, retirements and increased competition for clinical leadership talent. As a result, many organizations are focusing more strategically on hard-to-recruit specialties and areas requiring a greater degree of alignment with organizational imperatives.
SullivanCotter highlights some of the emerging workforce trends driving these challenges:
- Evolving workforce expectations
- ACGME and regulatory changes
- Expanding patient access
- Upward pressure on APP compensation
As a result, pediatric hospitals are reevaluating their overall clinical recruitment and retention strategies – including type and amount of incentives offered – as the competition for talent increases.
We’ve compiled the latest benchmarks on work effort and type of and amount of incentives offered to show how organizations are responding!
INFOGRAPHIC | APP Workforce Insights: Urgent Care
Learn more about APP work expectations, models of care, billing practices and more within Urgent Care settings.
As health care organizations seek to improve access, quality, service, and affordability, developing a strategy to integrate, optimize and engage the growing advanced practice provider (APP) workforce across all specialties is essential.
Urgent care is an important pathway for patients with more immediate care needs and health concerns. With their ability to provide a more cost-effective alternative to physician visits, enhance patient access, decrease patient wait times and more, the role of APPs within this setting continues to expand.
With the latest optimization and utilization benchmarking data, organizations can establish a comprehensive APP workforce strategy and prioritize critical areas of opportunity. Consider the following specialty-specific insights into Urgent Care setting when evaluating your APP workforce.
Press Release | Median Base Pay for Registered Nurses on Track for 3%-4% Annual Increase to Close Out 2024
As critical staffing issues persist, organizations are looking for better ways to recruit and retain RNs in a competitive talent market.
JANUARY 9, 2025 – SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for health care and not-for-profits, has released the latest benchmarks from both its 2024 Health Care Staff Compensation Survey and 2024 Registered Nursing Compensation Survey.
Collectively, these surveys report data from more than 2,400 organizations on approximately 2.2 million nurses and other clinical and non-clinical employees – representing the largest and most comprehensive health care staff compensation resource for hospitals and health systems.
Health care organizations continue to face unprecedented clinical workforce shortages. The registered nurse (RN) workforce has been hit particularly hard due to post-pandemic burnout, unfavorable working conditions, and an insufficient pipeline of future clinicians. As critical staffing issues persist, organizations are looking for better ways to recruit and retain RNs in a competitive talent market.
Although median base pay for RNs is up nationally by 3.0% according to SullivanCotter’s Health Care Staff Compensation Survey, there are variations between urban, rural, and major metro areas within each region that make it necessary for organizations to dive deeper into the data when evaluating market rates.
Differences in RN Base Pay by Location
With local labor markets being a major factor in many recruitments, it is important to understand the unique nuances of each organization’s geography. Growth in median base hourly rates for RNs is highest in the Northeast (4.8%) and North Central (4.6%) regions, dipping more than a percentage point in the West (3.5%) and Southeast (3.3%). The South Central states showed no year-over-year growth likely due to the 2023 survey results reporting the highest increases of any region.
Drilling down even further into greater metro areas reveals variation as well. When compared to the broader workforce, RN base pay has a higher geographic differential to national rates across six major metro areas. In New York City, base pay is 39% above the national median for RNs and 23% above the national median for all health care staff. This is similar for Boston at 35% and 18%, respectively. These findings indicate that using a single geographic factor for comparing national rates across the workforce in major metro areas is less effective than multiple geographic factors based on job type.
Tracking Changes in 2024
SullivanCotter’s new Registered Nursing Compensation Survey tracks trends in RN compensation on a six-month cadence. Due to external market pressures and evolving workforce trends, many organizations are assessing changes in pay, hot jobs, and movement by specialty more than once per year. The 2024 report, which includes six-month percentage change data from January – July 2024, shows that staff RNs involved in direct patient care have already seen a median increase in base pay of 2.0%. This is slightly less (1.4%) for those in indirect patient care. Both, however, are on track for annual increases of 3%-4% as 2024 comes to a close.
This survey also highlights which specialties have experienced the greatest base pay increases through July 2024. These include Critical Care, Obstetrics, Forensics, Emergency Medicine and Neonatal-Perinatal Medicine.
RN Pay Structures and Experience Pay
This new survey also provides insight into RN base pay by level and experience. Given the increasing prevalence of unionization, understanding the difference between step structures and more traditional pay structures is important to designing an effective compensation program.
Step structures are often leveraged in environments that have an increased presence of unions. Median base pay is higher nationally than in organizations without these structures, and the difference in pay from entry into the field to the final step is greater. The national median for step 1 is $42.49, while the median for less than 3 years of experience is $40.12 per hour. Advancement within a pay range also indicates higher year-over-year annual increases in step structures than traditional structures.
Considerations for 2025 and Beyond
External health care market forces continue to change how organizations are responding both strategically and operationally to recent RN workforce challenges. While pay decisions are nuanced and require a customized approach – especially based on the specific market in which each organization operates – there are several important planning considerations to take into account:
- While understanding national and regional changes in base hourly rates is important, leveraging local market data and pay differentials within major metro areas can assist in making difficult pay decisions and bolstering your competitive strategy.
- Reviewing year-over-year changes may no longer be enough when evaluating the competitiveness of base pay. With RNs often being one of the largest groups on payroll, analyzing market rates every six months will allow for more timely tracking and decision-making – especially for key nursing specialties and setting designations.
- Market movement for RNs continues to outpace that of the broader health care staff workforce. As a result, RNs often require more advanced compensation solutions to carve their workforce out as a priority and help support a more competitive recruitment, retention, and engagement strategy.
- With limited budget availability, evaluating nursing structure components such as clinical reporting relationships, spans of control, and organizational levels may help to improve productivity.
For more information on SullivanCotter’s surveys, please visit our website at http://www.sullivancotter.com/ or contact us via email or by phone at 888.739.7039.
Note to media: Additional data and interviews are available on request.
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About SullivanCotter
SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improves outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives–enabling our clients to deliver on their mission, vision, and values.
VIDEO | What is the future landscape of CRNA compensation?
The demand for CRNAs is greater than ever. Compete more effectively for talent with insights from our experts!
Learn more from our ongoing video series.
What is the future landscape of CRNA compensation?
Median total cash compensation for CRNAs has increased more than 20% in the past five years. SullivanCotter’s Sarah Kasner recently sat down to discuss emerging trends in CRNA compensation and how organizations can compete more effectively for talent as demand continues to place upward pressure on pay.
Looking for additional insight?
Dive deeper into the latest benchmarks
Round out your CRNA workforce strategy with insight into compensation, pay practices, work effort, employment status and more!
INFOGRAPHIC | 2024 CRNA Compensation and Pay Practices
CRNAs play a critical role in meeting anesthesia coverage demands.
Is your organization effectively recruiting and retaining these providers?
Gain access to important compensation and pay practices benchmarks!
SullivanCotter’s APP Compensation and Productivity Survey provides critical, data-driven insight into changes in compensation and pay practices for certified registered nurse anesthetists (CRNAs). Given the high demand for CRNAs, it’s important to stay up to date on the latest market trends and benchmarks.
Compensation for CRNAs is increasing faster than it is for both nurse practitioners and physician assistants due to ongoing anesthesiology workforce shortages. Total cash compensation for CRNAs grew by 9.6% from 2022-2023 alone. This large increase was likely due to the growth in surgical procedures as COVID-19 restrictions were lifted. It is expected that compensation will continue to increase over the next 3-5 years as the demand for CRNAs remains and staffing shortages persist.
Learn more from the latest results – including insight into base salary, total cash compensation, pay practices, work effort, and employment status!
VIDEO | Considerations for Creating an Advanced Practice Provider Leadership Structure
Leverage the full potential of your growing APP workforce!
Learn more from our ongoing video series that provides insight into emerging workforce trends.
What is the best way to align your APP workforce with system-wide goals?
Developing a well-defined APP leadership structure can help to ensure that all APPs are integrated into existing initiatives that focus on quality of care, patient outcomes, and operational efficiency.
SullivanCotter’s Hadley Powless explains how health systems can do this more effectively!
Looking for additional insight?
Dive deeper into our APP leadership data!
Round out your APP workforce strategy with insight into four different leadership levels – including compensation, administrative time, common titles, and more.
CASE STUDY | Maximizing Value-Based Reimbursement
Looking to align compensation more effectively with payer contracts and incentives?
Learn how a large not-for-profit health system partnered with SullivanCotter to improve its value-based reimbursement strategy.
Moving forward in a new value-based environment, health care organizations must align clinical compensation with reimbursement programs to maximize payer contracts and incentives.
However, this approach can be difficult to navigate without the data-driven insights and expertise needed to inform strategic compensation design.
Discover how SullivanCotter helped a client to improve its value-based reimbursement strategy by:
- Creating distinct physician compensation plans by specialty grouping
- Aligning incentives with payer contracts to improve patient outcomes and cost efficiencies
- Ensuring regular reporting through the Clinician Nexus platform
- …and more!
View the case study for greater insight into this organization’s challenges, our approach, and the outcomes!
How Pomona Valley Hospital Medical Center Developed a More Strategic Approach to Physician Recruitment
Leveraging Data-Driven Insights and Expertise to Enhance Physician Recruitment
THE SITUATION
Pomona Valley Hospital Medical Center (PVHMC), a 427-bed not-for-profit community hospital in Southern California, faced the challenge of effectively managing its physician recruitment efforts. As a standalone medical center, it was vital for the hospital to maintain a robust physician network while navigating California laws that prevent direct employment of physicians. The hospital also needed to ensure that its recruitment strategies would be data-driven for validation purposes and compliant with regulatory requirements.
Before partnering with SullivanCotter, the hospital relied on physician-to-population rates published by an external vendor to assess physician supply and demand in its market. Leveraging this data was a manual, labor-intensive process, and the information required greater accuracy and in-depth analysis to make informed decisions and validate recruitment needs. A more efficient approach was necessary.
Accessing the right data and analytical tools would enable the hospital to anticipate community needs and plan, justify, and execute its recruitment initiatives more efficiently. The hospital required a sophisticated solution that could help support this strategy and maintain legal compliance throughout each step of the recruitment process.
THE APPROACH
PVHMC turned to SullivanCotter’s Provider Needs Assessment (PNA), an interactive cloud-based application, to address its recruitment challenges and reach its goals. Several hospital leadership team members, including the Vice President of Administration, the Vice President of Ambulatory Services, and the Executive Director of Planning, collaborated with SullivanCotter’s consultants to implement the PNA.
The PNA provided PVHMC with a comprehensive analysis of physician supply and demand in its service area, including detailed data on the composition and practice patterns of the local physician community. This enabled the hospital to validate the need for specific physician specialties and ensure its recruitment efforts aligned with community health needs.
The hospital’s cross-functional team worked with SullivanCotter’s consultants to customize the PNA data and insights to focus on the hospital’s unique market dynamics and strategic priorities. This collaborative approach allowed PVHMC to leverage the expertise of SullivanCotter while ensuring the information gathered was personalized.
“The PNA lifted a significant burden by giving us more precise, data-driven insights into our physician community and their practice patterns. It became essential in ensuring compliance and strategically justifying the recruitment of key specialties, allowing us to make informed decisions that align with our community’s health needs,” said Leigh Cornell, Vice President of Administration, PVHMC.
OUTCOMES
Implementing the PNA has helped PVHMC improve its operational efficiency and overall recruitment strategy in several ways:
- The hospital now has access to data-driven insights that enable it to make informed recruitment decisions while remaining compliant. The PNA allows for more robust assessments of physician supply and demand, helping to validate recruitment initiatives with the leadership team and board of directors.
- The hospital developed a more strategic approach to physician recruitment. It can identify potential gaps in physician coverage and better engage with community physicians to understand their practice plans and expansion opportunities.
- SullivanCotter’s PNA offers a more in-depth analysis of the local physician market. SullivanCotter’s PNA captures the full complexity of physician supply and demand. The hospital can now identify physicians who only practice part-time in the service area or have satellite offices outside the primary service area. This provides a more accurate picture of physician availability and assists in recruitment.
“If I needed to recruit physicians, I would use the tool to indicate if we have justification and to show our leadership and CEO. We would see the list of physicians in our community and determine who we need to learn more about or see if there’s an opportunity before we recruit to understand and engage with that physician. We can see if there’s an opportunity either for them to expand their practice or for them to come to us, or if there are barriers to such,” Cornell added.
LESSONS LEARNED
The PVHMC case study offers several lessons for organizations considering a PNA:
- Dedicate time and resources: Engaging cross-functional stakeholders and ensuring they understand the data’s implications is essential for maximizing its value. This investment enables more informed decision-making and a stronger alignment with organizational goals.
- Customize the data to fit organizational needs: While the PNA provides a strong foundational framework, working closely with SullivanCotter’s consultants to tailor the data to your specific market dynamics is critical. This customization involves identifying relevant service area ZIP codes, securing accurate affiliation and employer data, and actively working with the information to build confidence.
- Shift to proactive decision-making: PVHMC transitioned from a reactive recruitment strategy to a more proactive one by embedding the PNA into its strategic planning process. This shift enabled the hospital to anticipate and address physician shortages and community health needs more effectively rather than reacting to gaps as they occurred.
- Use data to validate recruitment efforts: The PNA’s detailed analysis offers clear, data-driven justification for recruiting specific physician specialties. This helps secure the support of key stakeholders, such as leadership teams and boards of directors, and ensures alignment between recruitment initiatives and the broader organizational strategy.
INFOGRAPHIC | APP Leadership Structures Can Support Retention and Engagement
Advanced practice providers are integral to effective and efficient health care delivery.
Enhancing your APP leadership structures can help to support APP engagement, workforce planning, recruitment and retention, and greater alignment with physician workforce strategies.
SullivanCotter research shows that the presence of an APP leader is associated with 2% less turnover. With the direct cost of turnover estimated to exceed $120,000 per APP, this can have a significant financial impact on an organization. Additionally, many organizations are looking to have greater consistency in APP leadership leveling, compensation, and administrative time – and require access to the right data in order to address this.
Dive deeper into the data with our latest infographic! SullivanCotter’s APP Leadership and Organizational Survey – which contains data from more than 81 organizations on more than 1,250 individual APP leaders – reports on four different leadership level, including clinical-level, management-level, head of advanced practice, and top APP executive. This includes compensation data, common titles, administrative duties and more.
Fair Market Value: Supporting Compliance Within Large and Complex Health Systems
Physician compensation is on the rise due to ongoing labor shortages, evolving workforce expectations, and increased competition for talent.
As this trend continues, maintaining regulatory compliance with fair market value (FMV) and commercial reasonableness standards is critical in a complex and active enforcement environment.
Health care organizations must have the appropriate structures in place to help mitigate financial, resource and reputational risk for potential physician compensation violations related to the Stark Law, the Anti-Kickback Statute and IRS not-for-profit regulations.
Download our latest overview to gain greater insight into the following questions:
- How FMV is enforced?
- Why is FMV compliance important?
- How can we manage FMV as a large and complex health care organization?
- What are some of the key considerations and best practices for supporting compliance?
INFOGRAPHIC | Value-Based Performance Measures
Optimize reimbursement by aligning physician compensation more closely with value-based payer incentives.
Since the passage of the Affordable Care Act in 2010, the Centers for Medicare and Medicaid Services (CMS) has sought to transform the U.S. health care system from one that incentivizes volume to one that rewards value. This includes a shift from fee-for-service payments to mechanisms that link provider reimbursement to improved quality and reduced costs.
As organizations move forward in a new value-based environment, it is critical to align clinical compensation and reimbursement programs to maximize payer contracts and incentives.
CMS’s goal is to have 100% of traditional Medicare beneficiaries in a care relationship with accountability for quality and total cost of care by 2030.
Where does your organization stand?
Download our infographic to learn more about incorporating value-based performance measures into your design process.
Forbes | Fixing Health Equity and Access: Is Collaboration the Answer?
Fixing Health Equity and Access: Is Collaboration the Answer?
Health systems must be adequately funded, staffed, and designed to support health equity across today’s diverse population populations.
Building and staffing health systems have historically relied on supply-and-demand metrics: determine the health profile of a community and hire the appropriate staff to match the care needs of the population.
But that equation no longer adds up.
The industry is experiencing large gaps in care and patient access admist ongoing labor shortages – all of which are hindering health equity programs.
How can we enact real change?
Recently featured in Forbes, SullivanCotter’s President and CEO, Ted Chien, highlights how tax-exempt health care organizations must band together to:
- Modernize our health care system to secure a stable and high-performing workforce
- Gather comprehensive data to help prioritize initiatives and develop strategies that mutually benefit systems and patients.
- Maintain accountability through setting standard performance measures and benchmarking progress against them
INFOGRAPHIC | APP Unrestricted On-Call Pay
Revisit your call pay program with access to the latest benchmarks!
Establishing a comprehensive call pay approach for advanced practice providers (APPs) can help to support care coverage needs, improve patient access, and maintain effective throughput.
As organizations strive to meet growing patient demand, one premium pay practice that continues to receive attention is on-call pay. Many health systems are revisiting their on-call pay structures to better meet the needs of their patients. Implementing an effective APP on-call pay strategy can incentivize providers and improve access to care, throughput, and care coverage within your organization.
Is your current approach missing the mark?
Develop a more competitive strategy with data-driven insight into hourly coverage rates, top compensation methods, key considerations for adjusting on-call pay, and more.
Download our infographic – which features highlights from SullivanCotter’s 2024 APP Compensation and Productivity Survey – to learn more!
INFOGRAPHIC | 2024 Health Care Staff Compensation Survey
The data is in!
Dive deeper into the latest survey results.
In response to an increasingly competitive marketplace for talent, health care organizations require data-driven insight into compensation and pay practices to effectively recruit, retain, and engage key employees.
Equip your health care organization with the latest insight into employee compensation and pay practices! SullivanCotter’s Health Care Staff Compensation Survey includes data from over 2,000 organizations on more than 2 million employees.
Results show that median percent changes in base hourly rates for all employees increase by 2.7%. This varies by region with growth highest in the West (7.5%) and Northeast (5.3%) and lowest in the Southeast (1.9%).
Download our infographic – which features highlights from the latest survey report – to learn more about annual compensation increases, salary increase budgets, salary structure adjustments, and projections as organizations move into 2025.
Looking for more? Purchase the 2024 report for deeper insight!
Press Release | Unprecedented competition for APPs driving increases in compensation
Median total cash compensation for advanced practice providers continues to increase across all specialty categories
October 23, 2024 – CHICAGO – SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for health care and not-for-profits, has released its 2024 Advanced Practice Provider Compensation and Productivity Survey Report.
With the advanced practice provider (APP) workforce in high demand, median total cash compensation (TCC) continues to grow across all specialty categories. The 2024 results show the highest year-over-year increases for Surgical specialties at 6.0%. While Primary Care (5.7%) and Medical specialties (5.5%) follow closely behind, the report indicates more modest growth for Hospital-Based specialties at 3.7%. Base hourly rates for each category have followed a similar and steady growth trajectory.
When looking back even further, the data reflects ongoing competition for APPs in a tight market for talent. From 2021-2024, median TCC for nurse practitioners and physician assistants combined has risen a sizable 17% for Primary Care, 15% for Surgical, and 14% for both Medical and Hospital-Based specialties. TCC has grown even more rapidly for CRNAs and CAAs and has increased by approximately 22% in the past three years.
“For most health systems, the demand for care is at an all-time high while the industry is simultaneously facing labor shortages. The competition for APP talent is unprecedented and is placing upward pressure on compensation as organizations look to bridge the gap between higher patient volumes and limited access to care,” said Zachary Hartsell, APP Workforce Practice Leader, SullivanCotter.
In addition to higher salaries, organizations are also utilizing bonuses to aid in APP recruitment and retention as they move forward in a post-pandemic environment. Since 2022, the prevalence of sign-on bonuses has increased from 74% to 82% while the prevalence of retention bonuses has increased from 44% to 50%. Incentive compensation is evolving as well – especially in Primary Care settings. The 2024 survey reports that 50% of organizations utilize incentive pay for at least some of their APPs, with 74% of these organizations structuring incentives as add-on dollars rather than at-risk compensation.
As in prior years, many health care organizations remain focused on addressing turnover and burnout as an additional way to stabilize their APP workforce. This often includes a re-evaluation of work effort, scheduling burden, and premium pay practices. In 2024, average external (11%) and internal (6%) turnover rates were both down 1% from 2023. “With the direct cost of turnover estimated to exceed $120,000 per person, a reduction in turnover can have a significant financial impact on an organization – especially one with a sizable APP workforce,” added Hartsell.
Additionally, many organizations are looking to have greater consistency in APP leadership leveling, compensation, and administrative time. SullivanCotter reported four levels of APP leader compensation data including clinical-level, management-level, head of advanced practice, and top APP executive. SullivanCotter research has shown that the presence of an APP leader is associated with 2% less turnover and a positive but not statistically significant increase in APP productivity.
SullivanCotter’s 2024 Advanced Practice Provider Compensation and Productivity Survey provides critical benchmarking data on compensation levels and pay practices. As one of the most comprehensive resources of its kind for hospitals and health systems nationwide, the survey includes information from nearly 850 organizations representing more than 134,000 individual APPs and over 4,700 APP leaders.
About SullivanCotter
SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improves outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.
For more information on SullivanCotter’s surveys, please visit our website at www.sullivancotter.com, or contact us via email or by phone at 888.739.7039.
Modern Healthcare | Physician Compensation Trends: Housing Assistance, More Bonuses
Featuring data and insights from our 2024 Physician Compensation and Productivity Survey.
Health care organizations are getting creative as physician compensation increases amidst ongoing staffing shortages.
SullivanCotter’s Dave Hesselink recently sat down with Modern Healthcare to discuss how hospitals and health systems are addressing recruitment and retention challenges. Beyond increasing base salary, many are offering sign-on or relocation bonuses as well as focusing on other non-monetary incentives such as reduced workloads, less call burden, remote work options in some settings, and more.
Modern Healthcare dives deep into the data from 10 staffing and consulting firms to outline the top 5 trends in physician compensation:
- Employers continue to offer higher salaries, more bonuses
- But money isn’t everything…
- Physicians shift away from practice ownership as private equity grows
- Challenges in recruiting specialists continue
- Pushback grows against pay scales based on productivity
Press Release | Health Care Executive Pay Increases Reflect Competitive Talent Market
Year-over-year increases in median total cash compensation outpaced growth in base salaries
October 17, 2024 – CHICAGO – SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for health care and not-for-profits, has released the results from its 2024 Health Care Management and Executive Compensation Survey. This includes data from nearly 3,300 organizations representing more than 45,000 incumbent managers and executives – making it one of the industry’s most comprehensive compensation benchmarking resources for this workforce.
Base Salaries
The report details year-over-year changes in median base salaries – including across-the-board, merit, and market adjustments – for health care leaders. This year’s 4.6% increase for all executives is on par with the 4.4% growth seen in 2023. As has been the case for the past several years due to the increasing complexity of operations, organization size, and scope of responsibility, median increases for executives at the system level (5.2%) continue to outpace those for executives at subsidiary hospitals (3.5%).
“The industry is experiencing a critical gap in expertise as operations grow more complex and leaders retire or continue to step away. The pool of qualified executive talent is increasingly limited, and this is placing upward pressure on total compensation – particularly via higher base salaries,” said Bruce Greenblatt, Executive Workforce Practice Leader, SullivanCotter.
Health system positions with median base salary increases of 5.0% or greater tend to be those focusing on business strategy, information technology and security, integration, care delivery excellence and legal/regulatory compliance:
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- Top Leadership Roles: Chief Executive Officer, Chief Administrative Officer
- Information/Digital Technology and Strategy Roles: Top Information Security Executive, Chief Strategy Officer, Top Population Health Executive, Top Managed Care Executive
- Business/Operating Roles: Top Professional Services Executive, Top Quality Executive (Non-MD)
- Regulatory/Compliance Roles: Top Legal Services Executive, Top Compliance Executive, Top Internal Audit Executive
Despite some improvements in operating margin performance, health systems continue to confront several challenges. Pressures such as ever-increasing labor costs combined with a tight market for talent, high inflation, and threats to cybersecurity are ongoing. The demand for skilled executive talent remains high given the complexity of managing care in the current climate, and the heightened scrutiny and regulatory activity surrounding executive compensation is affecting how compensation committees achieve balance across financial, operational and talent risks.
Incentive Awards
Incentive awards were greater for 2023 performance as compared with 2022, reflecting an overall improvement in the operating environment. As a result, total cash compensation (TCC, equal to base salary + annual incentives) increased at a higher rate than base salaries in 2024. Median TCC for system-level executives increased by 8.3% while their base salaries rose by 5.2%. This trend is the same for subsidiary hospital executives as incentive awards were achieved at or near target levels.
Median annual incentive payouts for 2023 performance were closer to target than those provided for 2022 performance, when they were moderately below target. Given that there were no shifts in annual incentive plan prevalence or award opportunity levels, year-over-year changes in TCC can be attributed to higher levels of performance.
“Although performance is improving year-over-year and payouts approximate target, we still saw about half of organizations change their annual incentive plans for the 2024 fiscal year. This included a refined approach to goal calibration and increased weighting of financial and system-wide performance metrics – highlighting the need to focus on financial sustainability, integration, and refined care delivery models to move forward in a post-COVID environment,” said Tom Pavlik, Managing Principal, SullivanCotter.
Planning for 2025 and Beyond
While cautiously optimistic, each organization is managing circumstances unique to their region, market segment, operating model and current stage of post-pandemic recovery. Health systems and their boards should consider the following as they weigh future actions:
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- Prepare for a competitive talent market by anticipating the need to provide more robust compensation offers for external recruits and market adjustments to current leaders who are critical and in demand.
- Review and update executive compensation programs to meet evolving needs by differentiating competitive pay positioning based on role criticality, impact, and performance and ensuring peer groups represent the most relevant talent markets (even those outside of health care). For incentive compensation, it’s important to assess these plans in the context of the organization’s near and long-term strategy when setting performance metrics and objectives to ensure ongoing effectiveness.
- Prioritize the talent strategy by defining a clear process for assessing and developing leadership and ensuring that action plans (including compensation adjustments where needed) are in place to retain high-risk executives.
- Optimize the leadership structure and career architecture by evaluating headcount, distribution, span of control, and more to enhance overall efficiency. Refining executive job titles and leveling guidelines enables organizations to align leadership positions with the appropriate rewards structure, performance management programs, and career progression pathways.
About SullivanCotter
SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improves outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.
For more information on SullivanCotter’s surveys, please visit our website at www.sullivancotter.com or contact us via email or by phone at 888.739.7039.
Note to media: Additional data and interviews are available on request.
INFOGRAPHIC | 2024 APP Compensation and Productivity Survey
Dive deeper into the latest survey results!
The competition for APP talent is unprecedented and is placing upward pressure on compensation as organizations look to bridge the gap between higher patient volumes and limited access to care.
With the advanced practice provider (APP) workforce in high demand, compensation continues to increase and pay practices are evolving – reflecting ongoing competition in a tight market for talent.
Learn more from the latest results of SullivanCotter’s Advanced Practice Provider Compensation and Productivity Survey, which represents one of the most robust datasets of its kind for hospitals and health systems nationwide. This year’s report includes data from nearly 850 organizations on more than 134,000 individual APPs and 4,700 APP leaders.
Median total cash compensation continues to grow across all major specialty categories. The 2024 results show the highest year-over-year increases for Surgical specialties at 6.0%. While Primary Care (5.7%) and Medical specialties (5.5%) follow closely behind, the report indicates more modest growth for Hospital-Based specialties at 3.7%. Base hourly rates for each category have followed a similar and steady growth trajectory.
Download our infographic – which features highlights from the latest survey report – to learn more about annual changes in compensation, wRVU productivity, incentive compensation and more.
Looking for more?
- Purchase the 2024 report for deeper insight
- Register to participate in the 2025 survey to receive exclusive pricing and benefits
INFOGRAPHIC | 2024 Health Care Management and Executive Compensation Survey
Brand new data and benchmarks!
In 2024, year-over-year changes in total cash compensation have outpaced increases in base salaries.
Health care organizations continue to experience a very dynamic environment. This is impacting executive compensation levels, performance priorities, and talent strategies. Pressures such as ever-increasing labor costs, a tight talent market, high inflation, and cybersecurity threats are ongoing. Paired with a limited pool of qualified executive talent, these obstacles are placing upward pressure on compensation.
SullivanCotter’s 2024 Health Care Management and Executive Compensation Survey includes data from nearly 3,300 organizations on more than 45,000 incumbents. This longstanding resource provides organizations with critical compensation market data, information on key executive workforce practices, and insight into emerging industry trends.
Results show that median total cash compensation for system-level executives increased by 8.3% while base salaries grew by 5.2%. This trend is the same for subsidiary hospital executives and can be attributed to higher levels of incentive plan performance.
Download our infographic – which features highlights from the latest survey report – to learn more about annual changes in compensation, incentive plan provisions, and emerging or in-demand roles!
Looking for more? Purchase the 2024 report for deeper insight!
Press Release | Increases in Physician Compensation Return to Historical Annual Growth Levels
SullivanCotter’s latest survey report highlights how annual changes in physician total cash compensation were largely driven by increases in productivity
October 10, 2024 – CHICAGO – SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for health care and not-for-profits, has released new data and benchmarks from the 2024 Physician Compensation and Productivity Survey.
Although median total cash compensation (TCC) continues to increase year-over-year across all major specialty categories, it has returned to historical average growth of 3.5% following significant increases in 2023. This year, the Adult Medical and Pediatric Surgical specialty categories saw the greatest increases at 4.5% and 4.4% respectively. However, over the last five years encompassing the COVID-19 pandemic and significant changes to the Medicare Physician Fee Schedule (MPFS) in 2021 and 2023, primary care physicians have seen significantly larger compensation increases than other specialty categories at 16.5% since 2020. This increase aligns with the intent of the 2021 MPFS changes which significantly increased Medicare reimbursement for office-based Evaluation and Management (E&M) CPT codes.
SullivanCotter’s data represents the largest and most comprehensive physician compensation resource for health systems and hospitals. This year’s report includes data from more than 500 hospitals and health systems on approximately 215,000 physicians across 212 specialties. This reflects a 13% increase in the number of physician records reported in the 2023 survey.
Several market forces continue to influence physician compensation in 2024. Perhaps the most significant and long-lasting trend is changing physician workforce expectations. “The pandemic exacerbated workforce expectations for a more sustainable work life. We see this manifested as reduced or eliminated call expectations, additional paid time off, fewer annual expected work hours, and more interest in compensation plans with a higher proportion of fixed compensation and a lower proportion of compensation at risk,” said Dave Hesselink, Managing Principal, SullivanCotter. The 2024 survey documented decreases in annual expected work hours in Critical Care, Hospital Medicine, and Radiology.
This year’s survey report shows increases in TCC were primarily driven by productivity increases. From 2023 to 2024, reported median work relative value unit (wRVU) productivity for the Adult Medical, Primary Care, and Pediatric Medical specialty categories saw increases of 4-6%. “This is likely due to ongoing recovery from the pandemic in 2023 as well as reported wRVU increases from the remaining organizations adopting the 2021 MPFS changes,” said Hesselink. Increases to the wRVU values associated with hospital-based E&M CPT codes drove reported median wRVU increases in hospital-based specialties such as Hospitalist – Family Medicine (9.1%), Emergency Medicine (8.6%), and Hospitalist – Internal Medicine (8.3%).
Additionally, the 2024 report shows that base salary and wRVU productivity continue to be prevalent compensation plan components in Primary Care, Medical, and Surgical specialty compensation plans. Prevalence for these components ranges from 65-75%, which is consistent with last year’s results. Value-based or quality incentives are used by approximately 50% of organizations with payments averaging 6.8% of TCC for specialists, and 8.6% of TCC for Primary Care.
Although many of the high-level compensation design practices are relatively consistent year-over-year, there is greater variation in the number and type of plans being used. “When it comes to compensation design, the days of a ‘one-size-fits-all’ approach for groups of any size or specialty mix are gone. As the market looks to align compensation more closely with how care is delivered, we’re seeing varying approaches for physicians based on the care delivery model. You’ll see significant differences, for instance, in the mix of compensation components and corresponding proportion of overall pay for a coverage-based specialist as opposed to a primary care physician, and even differentiation within primary care based on the patient population being served,” said Mark Ryberg, Physician Workforce Practice Leader, SullivanCotter.
About SullivanCotter
SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improves outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.
For more information on SullivanCotter’s surveys, please visit our website at www.sullivancotter.com, or contact us via email or by phone at 888.739.7039.