"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Tuesday, January 14, 2014

Minimum Wage in Health Care

There is an editorial in yesterday's Modern Healthcare magazine, "Raising the Minimum Wage will Help Improve Healthcare Productivity.”  This is an area where I agree that the $7.25 minimum wage rate is unacceptable.  Quite frankly, a fast food worker making minimum wage is appropriate since it is a job that was designed to cater to high school and college kids; it was never meant to be a career.  In healthcare, the work is far more demanding than "do you want fries with that burger."

As Merrill Goozner, the editor of Modern Healthcare, writes, "wages in these (health care) occupations are extremely low and are expected to remain so."  Having an average wage for such employees as Goozner writes of $9.50 is ridiculously low.  At WMHS, our starting wage rate for an entry-level service employee is $9.55 per hour, remember that's starting wage rate not the average.  We made a commitment to a socially just wage when we were part of Ascension Health and have remained committed to it.  

Goozner continues, "one thing that when healthcare employers are faced with a rising wage tab, they look for ways to improve productivity to offset their increased labor costs."  He's right.  At WMHS, we performed a labor and supply analysis during FY '12 generating an annual savings of over $8 million.  That savings positioned us to give a bonus last May to all of our employees and to provide $2.5 million in wage increases this fiscal year.

A socially just wage rate is long overdue in hospitals especially as these lowered skilled jobs become the fast growing occupations in health care.

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