July 2009 - 2009 Materials Management Salary Survey

INSIDE THE CURRENT ISSUE

July 2009

2009 Materials Management Salary Survey

In the clutch, salaries shift into high gear
Recession rocks, not roils, supply chain compensation

by Rick Dana Barlow

How secure do you feel
in your current position?

While it may be hard to forget, if
not overlook, the doom and gloom shadowing today’s economy, this little bit of compensatory irony might help.

Amid an economic recession average salaries of healthcare supply chain management professionals actually jumped nearly 13 percent, according to Healthcare Purchasing News’ latest salary survey.

Talk about the best possible news coming at the worst possible time. HPN’s results, culled from another record number of overall respondents (nearly 34 percent higher than last year’s group, which was more than double the previous year), effectively reversed a four-year salary slide that started in 2004.

The average salary reported by materials management respondents rose to $69,767, a total that represented an increase over 2008 for 63 percent of survey participants. Thirty-one percent indicated that their salaries remained the same, the survey found.

Those who reported a salary increase for 2009 saw their pay boosted on average 3.9 percent from the previous year, which remains nearly a full percentage point lower than the reported 4.8 percent bump in 2004.

Salary by Job Title

To keep these data in perspective, however, it’s important to note that results tend to reflect the number and title variations of respondents. For example, more senior-level executives who lead integrated delivery network (IDN) operations will push salary data higher, while more buyers at community hospitals responding may pull the salary data down. For the record, more than half (60 percent) of respondents in this year’s survey worked at a director level, with 43 percent indicating they served as a director of materials management and 17 percent a director of purchasing.

The average salary reported for a director of materials management was $79,807, while purchasing directors claimed $57,429 in pay, the survey showed. At the top of the compensation chart, corporate/senior vice presidents earned on average $127,339.

In addition to your own hospital, how many other hospitals does your department have direct materials management responsibility?

Senior buyers and buyers reported
an average salary of $44,625 this year, up from $43,735 in 2008. Operating room business or materials managers, which HPN started surveying last year, reported $58,355, which represents an average increase of nearly $8,300 from the previous year.

Value analysis coordinators tallied $72,500, up from $65,309 last year in a sizeable boost that may be attributable in part to their clinical backgrounds as well as heightened popularity and demand for their skills in a troubled economy.

HPN added a new title to the survey this year – materials management information systems managers – who reported $63,529.

In addition to your own hospital, how many non-acute facilities does your department have direct materials management responsibility?

More than half (58 percent) of respondents worked at a standalone hospital. Nearly a third (31 percent) indicated that they were part of an IDN. The vast majority (81 percent) hailed from nonprofit hospitals and 14 percent from investor-owned facilities. Forty-eight percent of respondents served in urban facilities, 23 percent in suburban hospitals and 29 percent in rural organizations.

More than a third (34.4 percent) of respondents indicated that they handle materials management duties for more than 10 non-acute care facilities, such as clinics, surgery centers and physician offices, with the average being 6.1. A pinch more than a quarter (25.3 percent), however, said none.

On the other hand, 27.3 percent of respondents said they oversee materials management responsibilities for one to two additional hospitals, with the average being 2.4. Slightly more than half (50.9 percent) said none.

To whom do you directly report?

Depending on their title, nearly a third (32 percent) reported to the CFO; 25 percent reported to the director of materials management. Nearly half (49 percent) of survey respondents said they feel "very secure" in their current position; 45 percent indicated they feel "somewhat secure."

At 50.4 years of age, the average respondent has clocked 17.7 years in materials management, 10.2 of which has been spent at their current facility, which has an average bed size of 400. Their department includes 14.7 employees.

Salary by Gender and Education

Gender bias

Not surprisingly, men continue to out-earn women in supply chain management, nationally as well as regionally. And the gap between the two seems to be stuck around $20,000.

On average, male materials management professionals brought home $79,356, but female materials management professionals earned $59,323, according to the survey. On a positive note, both genders reported salaries that were higher than last year’s survey – nearly $10,000 higher for men and nearly $5,000 for women. More than half (52.1 percent) of respondents were male and 47.9 percent were female. The average male respondent was 49 years old; the average female respondent was 46.8.

Salary Increase by Gender

Of those who reported a salary increase, men netted a 4.1 percent jump in pay; women saw their salaries rise by 3.7 percent on average.

Regionally, males in the Pacific states earned the most at $86,000 on average, followed by the Southeast at $83,618. Rounding out the other three regions was the Northeast ($78,657), Mountain ($76,667) and Central ($75,160) as the lowest for men. Nearly $11,000 separated the highest- from the lowest-earning regions for men.

Females in the Northeast earned the most at $64,600, followed by the Mountain region at $59,975. Rounding out the other three regions was the Pacific ($64,600), Southeast ($58,611) and Central ($57,290) as the lowest for women. More than $7,000 represented the margin between the highest and lowest-earning regions for women.

In the regional salary spread based on gender, the Southeast led the divide for the second consecutive year at $25,007 on average, a wider gap by more than $5,000, compared to last year. The Pacific came in second at $21,400, followed by the Northeast at $18,682, Central at $17,870 and Mountain at $16,875.

Salary by Region and Gender

West golden repeat for green

For the third consecutive year, the Pacific region seemed to be the most lucrative area to work. The average salary for materials management professionals in Pacific facilities was $78,867, a considerable jump of nearly $9,000 from 2008, but on par with 2007 totals.

The Northeast took second place with $70,204 on average, roughly an $8,000 gain from last year.

But the Northeast barely eked out ahead of the Southeast, which reported $70,060, a more than $13,000 hurdle from the prior year.

The Mountain region came in fourth with $67,667 at almost an $11,000 annual gain, followed lastly by the Central region at $65,647 at a meager $3,400 bump from 2008 totals.

Salary by Years in Mat. Man. (MM) vs. Years at Current Facility (CF)

Please indicate the product areas for which supplies are purchased by your department.

Med/Surg Supplies

96%

Medical Capital Equipment

88%

O.R. Supplies/equipment

88%

Office Supplies and Forms

87%

Sterilization/Infection Control

85%

Imaging/Radiology

83%

Housekeeping Supplies

82%

Laboratory

78%

Network/Computer Equipment

69%

Plant Operations/Maintenance

67%

Transportation(patient and vehicular)

63%

Food

21%

Pharmaceuticals

21%

Are you currently usingRFID/Bar-coding technology?

Yes

46%

No

54%

j

If you are using RFID/Bar-coding
technology, what are you using it for?

Inventory Control

62%

Asset Tracking/Management

25%

Revenue Cycle Management
(Charge Capture)

24%

Pharmaceutical, Blood Products,
Laboratory (tracking, identification)

19%

Clinical Safety (Patient Identification - patient tracking)

16%

Service Contract Management

3%