Try This Idea

Paying employees fairly sometimes seems like a no-win proposition. If employees are underpaid, you won't keep the good ones for long. And if you err on the side of generosity you waste money.

To get the best employees, you have to offer competitive pay, benefits, and working conditions. It's a good idea to survey your community to be sure you're offering a reasonable pay package. But if your office is considered a better-than-average place to work, you may not need to be the compensation leader.

We generally recommend that practices aim to pay in the 75th to 90th percentile for like jobs. That means that 75-90 percent of workers with the same job in your community will be paid less than the ones in your office. Of course, that assumes two important stipulations: that working conditions are no worse than average in your office and that your workers are B+ or better employees.

A wage survey of your community will tell you what others are paying for similar job titles. Be sure to compare like jobs, though. RNs in nursing homes earn more than RNs in medical practices. And a receptionist in an advertising agency is paid mostly for her appearance, not her skills on the phone. Beware using wage survey data that was compiled from employers outside your immediate driving radius, too. Wage rates are very locality sensitive.

Wage-Relative Values

If you have trouble coming up with good survey data, though, you may be able to use a relative-value-scale approach. For years, we've compiled salary survey data from several regions around the country and dumped them in our great data processing maw to come up with this schedule of relative values for various job titles (see Table 1).

This scale assumes the receptionist's job is worth 1.00 "compensation units." In this year's edition of our study, a physician assistant's is worth 3.14 units. This just means that the average PA working in medical practices is making just over three times as much as the average receptionist.

Notable Changes

Since we first started compiling this index in the early 1990s, the relative positions haven't changed much. We always hope the receptionists will move up the scale from their traditional position near the bottom. It makes no sense to us that these hard workers in mission-critical positions are paid so poorly compared to their business office and clinical suite co-workers. To do a good job at the front desk positions requires intelligence, maturity, and accumulated experience at least equivalent to senior medical assistants.

Most interesting to us is the way office manager and administrator pay has changed as a multiple of receptionist pay. These titles have historically run 2.5 to 3 times the receptionist rate. That has dropped to 2.36 for administrators and 1.9 for office managers this year. It would appear there is less elasticity of demand for talented, front-line workers than for management types. That correlates with our observation that manager pay has been stuck in the high five figures for years.

Check Yourself

To use this idea in your office, just list your employees, their job titles, and the corresponding relative values from our scale. Then compute your internal relative values by dividing each employee's hourly rate by your receptionist's hourly rate. If a full-time employee is paid a salary, convert to the hourly equivalent by dividing the annual salary by 2,080 hours (52 40-hour weeks) and prorate for salaried workers of less than 40 hours per week. Where your internally computed relative value is greater than ours for the same job title, there's a chance that your receptionist is paid too low or the other jobs are paid too high.

Not Just Arithmetic

Of course, how you pay your workers isn't a simple matter of applying a formula or a cost-of-living escalator. Wage inflation has been modest in recent years. The general Consumer Price Index (CPI) has gone up less than 3 percent per year since 2004 and was down 0.7 percent for the 12 months ended April 2009.

So wage increases this year should mostly reflect increased value to the practice (unless you are making up for past below-average compensation). That implies an organized way of deciding whether performance has improved. Employees who are good workers this year but who aren't materially more valuable than last year shouldn't expect more than token increases. And, it may be necessary to freeze some workers who have been raised above the market rate for their jobs.

Conduct Your Own Wage Survey

Don't know where to get reliable wage-rate information? We generally recommend you try your San Diego component of the Medical Group Management Association (MGMA). The California MGMA compiles a thorough survey every year, and you should participate. SDCMS can put you in touch with other local sources, and sometimes the medical staff liaison at your hospitals or IPA compiles the data, so ask around. Employment and temporary help agencies are sometimes helpful too.

But if you just can't find good wage and salary information in your community, you may need to take the lead and compile it yourself. It's a way of doing something useful for the medical community, and it might generate some goodwill with referral sources - and potential new ones. Once you collect the data, distribute it to all who participated in your survey. You might even include practices that didn't participate in this first round of the project to show them the value of helping you next time.

Table 1: Wage-Relative Values

Job Title • 2007-09 Average • 2007-09 RV

Physician Assistant • 44.48 • 3.14
Nurse Practitioner • 38.94 • 2.75
Controller • 37.50 • 2.64
Triage Nurse • 35.58 • 2.51
MRI Technician • 34.13 • 2.41
Administrator • 33.42 • 2.36
Registered Nurse • 30.77 • 2.17
Business Office Manager • 27.89 • 1.97
Office Manager • 26.92 • 1.90
Satellite Manager • 26.44 • 1.86
X-ray Technician (Regular / Certified) • 24.22 • 1.71
Credit / Collections Supervisor • 21.25 • 1.50
Coder • 20.13 • 1.42
LVN / LPN • 19.83 • 1.40
Medical Transcriber • 19.71 • 1.39
Ophthalmic Technician • 19.59 • 1.38
Insurance Supervisor • 18.63 • 1.31
Accountant • 18.27 • 1.29
X-ray Technician (limited license) • 18.05 • 1.27
Administrative Assistant / Executive Secretary • 17.97 • 1.27
Insurance Biller • 17.55 • 1.24
Bookkeeper • 17.55 • 1.24
Surgery Scheduler • 16.95 • 1.20
Credit/Collections Clerk • 16.83 • 1.19
Medical Records Supervisor • 16.59 • 1.17
Laboratory Assistant, Certified • 15.63 • 1.10
Patient Account Representative • 15.57 • 1.10
Insurance Claims Clerk • 14.86 • 1.05
Medical Assistant • 14.66 • 1.03
Receptionist • 14.18 • 1.00
Telephone Operator • 13.70 • 0.97
Cashier • 13.59 • 0.96
Front Desk Eligibility • 13.10 • 0.92
Front Desk Authorizations • 12.98 • 0.92
Front Desk Registration • 12.68 • 0.89
Medical Records Clerk • 11.89 • 0.84
Data Entry Clerk • 11.60 • 0.82
Clerk • 9.86 • 0.70