Healthcare Workers’ Compensation Rose In 2023 Amid Staffing Shortages: Report

Dive Brief:

• Compensation for critical healthcare roles rose in 2023 amid heightened demand for workers, according to a survey from the Medical Group Management Association released last week.
• Median total compensation for medical assistant positions and healthcare management positions grew 3.3% and 7%, respectively, between 2022 and 2023, the survey found.
• However, increasing compensation cannot fully address labor shortages, according to the MGMA. The most successful medical groups are employing a broad range of strategies to optimize their workforce, including building new graduate programs and leveraging artificial intelligence.

Dive Insight:

Healthcare labor shortages have been top of mind for healthcare providers since the pandemic, when workers left the industry in droves due to burnout and what some said were unsafe working conditions.

In response, employers have increased compensation in an attempt to lure workers back, according to the MGMA. Over the past five years, registered nurse median compensation has increased by 19.6%, medical assistant compensation surged by 20.6% and licensed practical nurse compensation rose by over 22%.

Some employers also offered enhanced benefits in 2023 relative to 2022, such as reimbursement and paid time off for education, new wellness benefits, better mental health resources and paid leave.

However, despite the increased investment in compensation and benefits, nearly eight in ten employers said they spent more time trying to hire in 2023 than in previous years, according to an October MGMA survey.

Meanwhile, some employers may have reached the maximum of what they’re willing to offer in a benefits package. In a June survey, 70% of respondents told the MGMA that their benefits packages stayed largely the same compared to 2023, while 9% said their benefits offerings had declined compared to 2023.

Some healthcare providers told MGMA that further benefit increases would be contingent on improved financial performance, while others said they already offered competitive packages.

Employers’ reluctance to increase benefits and perks could also be due to a lack of return on investment. The MGMA found that some of the lingering staffing shortage in 2024 is due to structural “bottlenecks” across the healthcare labor market that are unlikely to be solved through increased compensation alone.

For example, since the pandemic, new nurses have been hard to come by as budget cuts and a lack of faculty have forced baccalaureate nursing programs to turn away record levels of qualified candidates, according to the American Association of Colleges of Nursing, which tracks enrollment trends over time.  

In the face of such bottlenecks and macroeconomic pressures, Halee Fischer-Wright, president and CEO at MGMA, said in a press release that compensation increases cannot be the only tool in a recruiter’s toolbox.

“Amid heightened patient demand and increased financial pressures, medical group practices continue to face a tight labor market where competition for clinical and administrative roles remains especially difficult,” said Fischer-Wright.

Medical groups that have effectively recruited and retained talent have built new graduate programs to funnel in early talent and invested in upskilling current staff into new roles.

Other providers have begun to leverage AI to do more with less staff. As of February, the MGMA found almost half of medical groups it surveyed had begun to automate their revenue cycle operations, and 17% had automated more than 60% of revenue cycle operations.