Average salary growth upending economic malaise

by Rick Dana Barlow

As if to flout an economy mired in a lingering recession it apparently pays to be a healthcare supply chain professional.

Since the financial crash of 2008 the average salary of healthcare supply chain professionals surged a cumulative 34.7 percent, stuffing nearly $21,500 in additional compensation into the past four-year period, according to Healthcare Purchasing News’ 2012 salary survey.

The good news doesn’t stop there. Seventy percent of respondents to HPN’s 2012 salary survey reported a compensation increase from the previous year, and nearly 87 percent attributed it to job performance as opposed to a promotion with responsibility changes or merely responsibility changes.

Further, of those who reported a 2012 salary increase actually saw their compensation rise 3.5 percent on average, a figure that has remained relative consistent (3.4 percent to 3.8 percent) during the last few years.

Further, nearly half (49 percent) feel at least somewhat secure in their jobs with another 43 percent feeling "very secure" in their positions. But in a sobering reality check, nearly 62 percent admitted they do not expect to receive a bonus as part of their 2012 compensation, while nearly 28 percent said they do.

Please note that this survey data must be kept in context and perspective as the results tend to reflect the number and title variations of respondents. For example, more senior-level executives who lead integrated delivery network (IDN) operations generally will elevate salary data, while more buyers at community hospitals may push the salary data lower.
 

Demographic profiles

Slightly more than half (53 percent) of respondents held a director-level position or higher, with 45 percent indicating they serve as a director of materials management and 8.5 percent a corporate, executive or senior vice president of materials or supply chain management.

Directors of materials management reported an average salary of $88,423, which is six percent higher than the overall average. Meanwhile, corporate, executive or senior vice presidents reported an average salary of $143,167, according to the survey. That’s almost a 72 percent premium on the overall average and nearly 62 percent higher than director-level professionals.
 

At roughly 14 percent, purchasing directors and managers comprised another of the larger groups of respondents, posting an average salary of $80,619, which is 3.3 percent below the overall average, the survey showed. For perspective, value analysis coordinators, which typically have clinical backgrounds, reported an average salary of $81,357. For additional titles, refer to the accompanying charts.

Roughly 47 percent of respondents worked at standalone hospitals, while 44 percent indicated they worked in an integrated delivery network, alliance or multi-hospital system. This statistic alone veers from previous years as the gap between single hospitals and IDNs or health systems tightens.
 

The gulf between location and types of facilities also evened out as 37 percent noted they work in urban hospitals (where the average salary was $94,551), compared with nearly 33 percent in suburban hospitals (where the average salary was $86,051) and more than 30 percent in rural hospitals (where the average salary was $66,836).

Compensation for urban supply chain professionals represented a 13.4 percent increase over the cumulative average and a nearly 10 percent increase from last year. Suburban salaries edged up 2 percent year-to-year and topped the overall average by 3.2 percent while rural salaries eked up nearly 2 percent from 2011 levels but fell short of the overall average this year by nearly 20 percent.
 

Nearly three quarters (73.5 percent) of survey respondents served at not-for-profit facilities, while 19.4 percent worked at for-profit facilities. More than 6 percent said they worked at government-owned facilities.

Sixty-one percent handle supply chain for a single hospital, while 16 percent reported they also handle one or two additional facilities. Eight percent indicated that they are responsible for supply chain operations at more than 10 other facilities. On average, survey respondents reported they oversee supply chain for 2.3 other hospitals as well as their own.

The vast majority (82 percent) indicated that they aren’t limited to acute care facilities but also provide supply chain services to a variety of non-acute care facilities. In fact, nearly half (48 percent) of survey respondents noted that they’re responsible for supply chain in more than seven non-acute care facilities, including clinics, surgery centers and physicians offices. Nearly 12 percent cover five to six facilities, more than 11 percent one to two facilities and almost 11 percent three to four facilities. On average, survey respondents covered six non-acute care facilities.

Depending on their own titles, more than 35 percent said they report to their organization’s CFO, more than 15 percent to the vice president of supply chain or support services, nearly 25 percent to the director of materials management and 4 percent to the corporate director of materials management. Reflecting a group that appears to be growing in number annually, more than 4 percent replied they report to the hospital administrator/CEO.

HPN’s 2012 salary survey showed that the average respondent is 53.4 years of age, which is more than four years older than last year’s average respondent, has spent about 19 years in supply chain management, nearly 11 of which has been at their current facility, which has an average of 418 licensed beds, 70.6 percent of that is occupied. On average, their department includes 34.1 employees, which is nearly twice the size of the average respondent’s department last year.

More than 65 percent of respondents identified themselves as standalone hospitals but part of a group purchasing organization, while 38 percent indicated they were part of an IDN. More than 5 percent said their standalone hospital did not use a GPO, and 5 percent noted that their facility participated in an accountable care organization (ACO).

In terms of highest level of education achieved, 37 percent of respondents hold Bachelor’s degrees, nearly 23 percent post-graduate degrees, 16.5 percent associate’s degrees and nearly 24 percent earned high-school diplomas.

Not surprisingly, education levels tended to impact average salaries. Those with post-grad degrees, such as Master’s and Ph.D.’s, reported an average salary of $110,036, nearly 8 percent higher than last year, and a 32 percent premium on the overall average this year.

Meanwhile, those with Bachelor’s degrees reported earning $92,873, which is 5.4 percent higher than the prior year and 11.4 percent above this year’s overall average. Those with associate’s degrees reported average annual compensation of $64,757, and those who completed high school $55,970, the survey showed.

Benefits packages remain healthy. Respondents cited medical plans (96 percent), dental plans (91 percent), life insurance plans (84 percent), 401(k) plans (76 percent) and long-term disability (67 percent) among the top five.

Forty-five percent listed tuition reimbursement, 31 percent professional development/continuing education, 29 percent professional dues, 27 percent mobile telephone and 24 percent a cafeteria plan as rounding out the top 10.

Survey respondents also cited flextime, parental leave, health club membership, IRA, childcare reimbursement, frequent flyer miles and car allowances among their options, as well as vision plans and short-term disability plans.

Gender profiles

This year, the gender-based compensation gulf seemed to plateau, which may be dubious good news to some. Last year, the magic number separating the average salaries of men and women spiked to $25,699 following several years below $20,000. In 2012, however, the gap hiccupped to $122 more.

Men comprised 53.4 percent of survey respondents, reporting an average salary of $95,212, a nearly 6 percent increase from last year and 14 percent higher than the overall average this year.

Women made up 45.4 percent of survey respondents, reporting an average salary of $69,391, a nearly 8 percent rise from 2011, but a $14,000 gap from the overall average this year.

The average age of a male survey respondent was 49.4; the average age of a female survey respondent was 50.2. A very small percentage did not reveal their gender.

From a regional perspective, which HPN delineates as Northeast, Southeast, Central, Mountain and Pacific, men in the Southeast upended men in the Pacific, ending its two-year run atop the charts.

Men in the Southeast reported an average salary of $104,897, compared with $103,986 in the Pacific region. In fact, Southeastern men saw their average wages spike 20 percent from last year. Pacific region males only saw their average wages increase 7.3 percent year-to-year.

Northeastern male salaries came in third at $97,476, followed by Mountain at $84,786 and Central at $82,879. The Mountain region reported just under a $1,300 increase, while the Central region reported a $2,150 drop.

The gap between the highest- and lowest-earning regions for men widened considerably, reversing the trend of the previous two consecutive years. The 2012 gap exceeded $22,000, compared with $13,400 last year and $18,000 in 2010.

For the third consecutive year, women in the Pacific region earned the most at $86,353 on average, a 21 percent jump year-to-year, and the only region among females to surpass the overall salary average.

Women in the Mountain region earned the next highest average salary at $72,769, a startling 35 percent spike over 2011 levels.

The Northeast region finished third at $70,167, slightly more than 6 percent higher this year, followed by the Central region at $65,645 and the Southeast at $64,162.

Just as with the men the gap between the highest- and lowest-earning regions among women exceeded $22,000 this year, compared with more than $17,000 during the previous two years. This year’s survey results also broke 2011’s year-to-year regional salary increases never reaching the four-digit range.

Based on gender, the regional salary spread ballooned four times more than the previous year in which $7,300 separated the regions with the largest and smallest spreads. This year that spread approached $29,000.

The Southeast led the gender-based salary spread at $40,735 between men and women, followed by the Northeast at $27,309. While everywhere west of the East Coast reported tighter divisions, that’s not saying much. In fact, parity was closer in 2011’s survey.

The Pacific region took third in the spread between men’s and women’s average salaries at $17,633, followed ever-so-closely by the Central region at $17,234, and the Mountain region at $12,017.  

West on a roll

For six years running, the Pacific region seems to be the most lucrative area in which to work, based on overall average salary.

Supply chain compensation for Pacific state professionals was $94,669, which is more than 8 percent higher than last year and 13.5 percent higher than the overall average.

For the second consecutive year, the Northeast took second place with $86,353 on average, a 7 percent bump from 2011 but only 3.6 percent higher than the overall average.

Also consistent with last year’s trend is the third place region. The Southeast supply chain professionals reported an average salary of $84,717, a 9.3 percent rise from last year’s level.

While the top three regions held their average salary positions in 2012, the Central and Mountain regions switched places.

Supply chain professionals in the Mountain region reported an average salary of $79,000, an 11.4 percent jump from last year, while the Central region reported an average salary of $74,004, less than $200 higher than the previous year.