2016 Salary Trends in Healthcare
By: Catherine Conlan
The growth that healthcare employees have seen in their salaries is likely to continue in 2016, experts say. “It’s one of the most consistently growing occupational segments out there,” says Jonas Johnson, senior researcher at Irvine, California-based Economic Research Institute.
Growth varies widely by position, however. Johnson says his research has found that over the past 15 years, top-of-the-line specialized surgeons and lower-level physicians such as general practitioners have seen strong growth, while midlevel specialists, such as obstetrics and gynecology, have seen slower growth.
Even with variations, healthcare salaries continue to be strong. “Healthcare is similar to the technology industry — we’ve been seeing pretty tremendous wage growth over the last few years,” says Katie Bardaro, vice president of data analytics at PayScale.
There are three factors driving this trend in healthcare salaries:
Expanded Health Insurance
The Patient Protection and Affordable Care Act (also known as the ACA or “Obamacare”) has provided health insurance to millions of people who previously weren’t covered. The increased availability of coverage has led to higher demand for healthcare, Bardaro says.
The Health Resources and Services Administration estimated that the full scope of the ACA would account for 19 percent of the change in demand for health care services between 2010 and 2020.
An Aging Population Needs More Healthcare
An aging population tends to require more care, Bardaro says. Older people need more extensive care and often more interventions, increasing demand across the system.
The aging population puts pressure on supply on the other side, as well: More providers are retiring as they age out, says Dallas-based compensation consultant Dindy Robinson, particularly as they are faced with changing regulations or practices, such as the recent ICD-10 update.
The Bureau of Labor Statistics expects more than a million job openings for nurses alone by 2022, for example. Workplace stress has also pushed some nurses out of their jobs prematurely, Robinson says.
As for doctors, a 2015 study for the Association of American Medical Colleges said that by 2025 there will be a shortage of up to 90,000 physicians in primary and specialty care.
The Healthcare Industry: Immune to Downturns
Demand for healthcare services isn’t as affected by a strong or weak economy as many other industries, since people tend to get healthcare out of need.
“It doesn’t drop with the economic climate — you may be sick or injured regardless of what the stock market is doing,” Bardaro says. As a result, demand for services doesn’t cycle with economic conditions.
Other factors, such as geography, may affect healthcare salaries in specific areas. In addition, incentive-based models that employers use to reward key performance indicators such as average length of hospital stay or rate of patient complications can affect salaries in certain areas, Robinson says, adding that employees at independent practices generally tend to make less than their counterparts in larger organizations.