Administrators break $85,000 level

It was a respectable year for the long-term care industry, with many managers’ salaries growing at or above standard market rates, according to a recently released survey of nursing home personnel. 

The national median for administrators saw a 3.6% pay bump; their assistants gained 4.3%. Directors of nursing experienced a 3.9% rate increase over the previous year. Assistant DONs weren’t so fortunate, dropping 0.03% from last year’s high-water mark.

National median salaries for administrators topped out at $85,464, up from $82,400 last year. Assistant administrators, falling short of last year’s incredible 10.8% leap, still mustered a median raise of $2,643, bringing them to an even $62,000 per annum. 

Directors of nursing reached the $75,000 mark, while their assistants actually lost ground, losing a median average of $22 from last year, and lowering them to $60,000. 

The report comes courtesy of the Hospital & Healthcare Compensation Service, in partnership with the American Association of Homes and Services for the Aging, and the American Healthcare Association. For 31 years, HHCS has collected information from a wide array of nursing homes across the nation. This year, 2,135 homes responded to the survey.

More nonprofit facilities participated in the survey this year than last year, though they were greatly overshadowed by for-profits by a ratio of four to one.  

Nursing home managers fared slightly better than most of their co-workers in the healthcare industry, according to Paul Gavejian, managing director at Total Compensation Solutions.

“When you look at the administrator, their pay is up by 3.6% from 2007 to 2008,” he said. That percentage “is marginally higher than the average that you see in most healthcare organizations,” which Gavejian said is about 3.0% to 3.4%. 

We see the same thing with directors of nursing, he says, and for good reason. 

“They’re at 3.9%, and that’s because this is one of those life-blood positions, where if you don’t have good people in those management positions at the facility level, you’re going to be hurting,” he says. “So what you’re seeing here is a lot of merit increase, a lot of keeping up with the market.”

In fact, a higher percentage of management workers—58.8%—received a pay hike based on merit than did any other subset of nursing home workers. 

Nursing supervisors—both registered nurses and licensed practical nurses—didn’t make out as well as some of their bosses this year, dropping almost 1%. But Gavejian said it isn’t necessarily a bad sign.

“In other words, someone didn’t come in and say, ‘By the way, your pay is going down about 1%,’” he explained.

Instead, he sees it as the impact of fewer hours on the job or the work being more spread out. Managers mindful of costly overtime might have taken tighter control. 

“I think there are more people out there right now in the nurse supervisor roles,” he said. “Their hourly rate doesn’t go down; it’s just that they’re working fewer hours.”

The slight drop in nurses’ salaries surprised Phillip B. Wilson, president of the Labor Relation Institute in Broken Arrow, OK. 

“I don’t think generally speaking that nursing salaries are that soft, so maybe it’s just in long-term care they’re getting hurt a little bit more,” he suggested.

Some salaries of non-clinical nursing home positions rose the most. Chief financial officers across the country saw a median pay rise of nearly 9.9%, to a survey high of $104,258. Controllers’ jump was even greater at 10.6% (to $74,070), and directors of development squeaked ahead of them with a 10.9% hike (to $87,322). But directors of marketing trumped them all, receiving a median pay increase of 14.9% (to $63,604). 

“I think there’s a lot more work in those areas in terms of compliance and in terms of regulation, specifically for the financial positions,” Gavejian theorized about the huge pay hikes. “But for development and marketing, I think those people are working a lot harder and going out there and demonstrating what the local facility offers to the community.”

Wilson agrees, but is skeptical of the data. “There’s lies, damn lies and statistics. You have to look at ‘where did you start from,’” he says. 

“When the economy starts to struggle, the most important thing that a long-term care facility can do to shore up its finances is to make sure its census is high. So you have to invest in filling beds. If they’re not full, you need to have good people out there filling those beds.

“That may explain why the marketing people jumped,” he said. But he also said that some marketing positions might have started the year at a lower comparative pay rate than some other positions. If that’s the case, this could merely be a correction to a statistical sampling quirk.

There’s a lot of potential room for expansion in the long-term care field, says Gavejian, but he’s not sure if skilled nursing facilities will reap those benefits.  

“With continuing care, with home care, with a variety of other services offered, there’s expansion in care offered on a long-term basis, but it’s not necessarily in a skilled nursing facility,” he explained. “So there might be some minor retraction of employment in this industry, but the jury’s still out on that.”

As treatments improve, there’s a lot of uncertainty for nursing homes, he said. Hospitals can take care of a lot of acute matters, he noted, but other societal factors also come into play, including the rise in obesity. 

“Are these people who are going to need continuing care or long-term care … will these people be checking into skilled nursing facilities?” he wonders.

One thing Wilson says he knows for sure: The presidential election is going to significantly influence the future of salaries in the long-term care field. 

The Employee Free Choice Act, a new piece of legislation backed by unions and democrats—including presidential contender Barack Obama—could provide unions with a door into more nursing homes than ever before. And if Obama wins the White House, it’s almost guaranteed the legislation will pass, Wilson said.

“Once a union is recognized under the current law, a nursing home facility or long-term care facility is not required to enter into a contract with a union if they can’t come to some agreement,” he explained.

“The Free Choice Act flips that on its head and says that if you do not have a contract within 90 days, then a federal mediator will look at what’s going on and try to get the parties to settle. If the parties won’t settle under those circumstances, then an arbitration panel comes in and imposes a collective bargaining agreement on the facility for two years.”

And while arbitrators generally try to appeal to both sides in an argument, it would be almost unheard of for them to cut wages. 

“I think that you could anticipate, with respect to wages, that if this Free Choice Act were to go into place, organizing in healthcare would increase massively,” Gavejian said. “So I think that wage pressure to whatever extent it is driven by [union] organizing… will go up.”

In the short term, Gavejian says that nursing home wages likely would go up if the bill passes into law. But, he added, even if that happens, it probably wouldn’t go into effect until the second half of next year.