Nurse Salaries Versus Executive Administrative Salaries: A Chasm Worth Crossing

  1. The gap between nurse salaries and those of healthcare executives rose from 23:1 to 44:1 in 10 short years. Our healthcare system is strapped, we are in the midst of a nursing shortage, and it seems there is a chasm be between caregivers and administration when it comes to wages. Learn about this pay chasm and how you can help.

    Nurse Salaries Versus Executive Administrative Salaries: A Chasm Worth Crossing

    According to the World Health Organization, there is a 1 in 300 chance of a patient being hurt while receiving healthcare. Compare this to a 1 in a million chance of being harmed while traveling by plane and you start to understand the inherent problems of being a patient. These statistics might lead you to believe that healthcare clinicians are highly compensated for the care they provide.

    However, a recent article in Healthcare Finance illustrates just the opposite for those who dedicate themselves to patient care, such as doctors and nurses. But, the same isn't true for non-clinical administrative staff, like CEOs and CFOs. In fact, the article reports that between 2005 and 2015, average CEO compensation increased from $1.6 million to $3.1 million, an increase of 93%. While most people won't argue that administrative professionals are essential to the function of our healthcare system, we might need to explore the value they bring to patient care and safety.

    The Cost of Healthcare

    We would be remiss not to discuss the overall cost of healthcare when reviewing salaries for those who work in the industry. It's estimated that we spend 2.9 trillion dollars each year on healthcare services. This is around 18% of the Gross Domestic Product or the total value of everything produced by all people and companies in the United States. If we break this number down per person in the U.S. - it comes out to just a bit over $9000 per year.

    The sad reality of these numbers is that they don't equate to a safer environment for patients. These numbers beg us to start questioning where the money is actually going.

    Healthcare Salaries

    As a nurse, you understand the critical role you play in the delivery of care. And, you know what you make. But, have you ever considered your salary increases compared to those in executive level administrative positions?

    One study looked at the salary changes for clinical staff during the same time as reported above for healthcare executive salaries. The researchers found the gap between executives and orthopedic surgeons went from 3:1 to 5:1. For pediatricians, the deficit increased from 7:1 to 12:1. The gap became a chasm for registered nurses, when it jumped from 23:1 to 44:1.

    This means that from 2005 to 2015, administrative executives and other non-clinical workers contributed 27% to the increase in healthcare costs. Management specifically added 7% or an increase of 15 billion dollars.

    Healthcare Dollars

    You might be wondering if our healthcare system will have the ability to pay for the number of nurses needed to keep patients safe. While administrative executives have a critical role within the system, they aren't at the bedside when hearts stop, kidneys fail, or brain waves cease. So, how do nurses positively impact healthcare policy?

    Nurses Act for Change

    Change doesn't come easily or quickly. But, if these numbers are concerning, becoming involved in policy changes might be the best way to help. Here are a few things nurses can do to change the culture positively:

    Get Involved with Politics

    This might not be something you like or ever considered before, but all healthcare policies and politics are controlled by federal and state laws. You could get involved on a local level by volunteering for committees that examine pay, safety, and other critical issues in your hospital. You could also join professional nursing organizations that take nursing issues to Capitol Hill. If you don't want to go to meetings, then write to your state representative about the policies and situations that are concerning to you.

    Be part of a movement


    If getting involved individually isn't comfortable, you can join movements, such as Nurses Take DC. This group is a grassroots movement of bedside nurses who advocate for safer patient ratios and stronger voices for nurses as shareholders in healthcare decisions.

    Looking Towards the Future

    We need to have open, honest conversations about the importance of nurse salaries, patient safety, and healthcare advocacy. Where do you see the future of nursing salaries? How do you propose this ever increasing wage gap between those who provide care and those who hold executive level positions be solved?

    Let us know your thoughts and solutions in the comments below.
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    About melissa.mills1117, BSN

    Melissa is a Quality Assurance Nurse, professor, writer, and business owner. She has been a nurse for over 20 years and enjoys combining her nursing knowledge and passion for the written word. You can see more of her work at www.melissamills.net or on her blog at www.lifeafterforty.blog.

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    13 Comments

  3. by   HomeBound
    Unionize.
  4. by   Chrispy11
    Don't forget the bonuses and golden parachutes.
  5. by   Luchador
    And we have RNs on this forum arguing against MA's mandated patient ratio law. Just crazy. Take care of the people that take care of the people!
  6. by   melissa.mills1117
    Quote from Luchador
    And we have RNs on this forum arguing against MA's mandated patient ratio law. Just crazy. Take care of the people that take care of the people!
    Luchador - I love this "Take care of the people that take care of the people!!!" That is a very powerful statement!

    Melissa
  7. by   BedsideNurse
    Quote from Luchador
    And we have RNs on this forum arguing against MA's mandated patient ratio law. Just crazy. Take care of the people that take care of the people!
    Amen!! THIS 1000x over!
  8. by   traumaRUs
    Great article. It IS vitally important that you get involved politically. I never thought I would get involved but going to our state legislators, calling them, texting them is what makes change.

    in the end, we are VOTERS and citizens, in addition to being nurses. We have families, bills and a myriad of responsibilities. Its important that our work is recognized for what it is: life-saving.

    Thanks Melissa!
  9. by   CrunchRN
    So agree. I am not an acute care nurse, but have great admiration for what they do. They should be paid better and better staffing is critical.
  10. by   cyc0sys
    Administrators and healthcare executive are ruining healthcare for the patients and clinical staff. If they weren't constantly trying to reinvent the wheel with new policies, customer service, and quality surveys the rest of us could probably actually get back to patient care.

    Maybe hospitals should starting setting up empathy labs for administrators and executives so they can shadow nurses and clinicians for a week to gain insight into patient care.

    Conversely, maybe they should send nurses and doctors to financial management classes, so they can gain insight into what admin and exes do.
  11. by   kbrn2002
    There is no business, healthcare included that can justify to me why the fat cat CEO in a fancy corner office deserves a high 7 figure salary while the workers generating the product or service that drives the company profit are subsisting paycheck to paycheck. In some cases they are not even making it on their own paycheck to paycheck and still rely on government assistance despite working full time.

    How many of you work for a large enough health care system that your parent company received a huge corporate tax cut? This was widely publicized and promoted as a way for companies to "pass the savings" to their workers in the form of higher wages or bonuses. Now...how many of you that work for one of those companies actually got a large raise or a bonus? I sure didn't.

    Political involvement might be one way to start slowing down this trend, but that's a long and difficult road thanks to changes in campaign finance laws. A vast majority of the time he [or she] who spends the most is the one elected. We now have the wealthiest congress in history and the very people we entrust to vote on policies to protect our interests are instead voting on policies to protect their own wealth and the wealth of their major donors. Is a fix possible? Maybe, but it sure won't happen overnight. First thing to do is vote! Do not vote for the candidate with the splashiest ads, vote for the candidate that shows a history of supporting policy that doesn't protect the already wealthy at the expense of the poor and middle class.
  12. by   melissa.mills1117
    Quote from cyc0sys
    Administrators and healthcare executive are ruining healthcare for the patients and clinical staff. If they weren't constantly trying to reinvent the wheel with new policies, customer service, and quality surveys the rest of us could probably actually get back to patient care.

    Maybe hospitals should starting setting up empathy labs for administrators and executives so they can shadow nurses and clinicians for a week to gain insight into patient care.

    Conversely, maybe they should send nurses and doctors to financial management classes, so they can gain insight into what admin and exes do.
    Empathy Labs - nice idea!! ~Melissa
  13. by   melissa.mills1117
    kbrn2002 - Can't love this enough!!!

    Thanks for your thoughts! Always welcome!

    Melissa
  14. by   Neats
    I agree nurses should make way more monies. Unionize...well maybe. I am a nurse who follow the rules. If HR and managers are smart they will follow the rules too. Most places follow rules so you are wasting your monies on unions. What we need to join together and fight for is this;

    Outpatient/Inpatient Nursing codes for what we do as part of reimbursement. For each injection I give that is IM a code should be attached and the hospital should get reimbursed. Same with IV, with anything we do. Helping with ADL's, education....just like Physical Therapy/Occupational Therapy/Speech Therapy.

    A Home Health Nurse RN with the code G0299 is usually billed in 15 min increments and the total cost for an hour visit is usually reimbursed at 120.00. As we know well, we usually spend a considerable time there teaching, changing wounds, sorting meds with ongoing education, calling MD for new orders...I can go on and on but clearly everyone gets their moneys worth for nurses.

    We do this for Home Health why not hospitals?? When it comes to uniting for a cause remember we are in a business and if we get our codes based on services we become more valuable to our employee. This is where we succeed, this is where we should unit and get the reimbursement we deserve.

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