Hospital pay equity: it all comes down to fairness

Hospital pay equity: it all comes down to fairness

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Becker's Hospital Review recently reported that a clinical psychologist has sued Northern Light Acadia Hospital in Bangor, Maine after learning that her salary was nearly half that of her male colleagues. While she was earning $50 an hour, the men were earning $90 or $95 an hour. After she approached her administration about the discrepancy, they admitted to finding “pay discrepancies across the hospital,” and proposed to adjust the hourly wage for all psychologists to $57 while allowing her male colleagues to continue to earn $90 and $95 an hour for a period of time in order to “ease their transition.” The doctor expressed her disappointment over the proposed solution. In the end, she was told to take the matter to the hiring manager, who allegedly told her, “What do you want me to do, go through every inequality I found and reimburse everyone?"


A far-reaching issue


Pay equity is a pressing issue. And when people think of pay discrepancies, they think of situations like the one at Northern Light Acadia, of women being paid unfairly. Unfortunately, in the healthcare industry, this issue goes beyond gender inequality. Medical staffs are often divided on issues regarding pay discrepancies among specialties, practice groups, and even locations. More and more, hospitals are being called upon to consider the fairness of their pay culture.

Working with healthcare organizations for the past 15 years, our team has seen firsthand how disruptive this issue can be, especially when the compensation in question is related to taking call. Disputes over call pay can cause hospitals to lose service lines in their emergency departments, impacting access to care in their communities. Given all that’s at stake, it might be tempting to offer quick and easy solutions to make the problem go away.


Solutions have to be fair, not fast


When it comes to compensation disputes, no solution is going to work unless it solves the root cause of the problem: unfairness. After all, offers were made to the psychiatrist at Northern Light Acadia, but none of them addressed the lack of fairness at the heart of the issue; and therefore, they did nothing to heal the divide between the physician and her administration. In fact, they made it much worse.


When it comes to call pay, hospitals typically deal with disputes that arise one at a time, negotiating with specialties that are demanding to be paid or to be paid more. These negotiations don’t address the issue of fairness, and so they inevitably fall short and often make matters worse.


Transparency builds trust 


Single-specialty negotiations erode trust between administrators and physicians due to a lack of transparency. Physicians are often under the impression that specialty groups with the most political sway end up with more than their fair share of the call pay budget. So, even if a particular specialty is satisfied with the outcome of a negotiation, the hospital’s culture and working relationships are negatively impacted. In this environment, agitation around the issue of call pay will not disappear. 


Achieve transparency through participation


At MaxWorth, we believe the first step in establishing fairness in any hospital compensation program is to create transparency by inviting physicians to participate in the decision-making process. That’s why the first phase of our Call Pay Solution is the establishment of a Physicians' Call Committee made up of representatives from a wide range of specialties. MaxWorth brings to the table our years of experience building call pay programs at healthcare organizations across the country, and physicians bring their experience taking call at their facility, which is unique for every specialty, and in every community. Together, we work with the hospital’s administration to arrive at a fairness standard for all call pay rates. 


The power of process 


We’ve only come across one hospital that pays all specialties the same rate for covering call. More often, a hospital's call compensation is linked to burden. Given that there’s a finite amount of money available in a call pay budget, it’s inevitable that decisions regarding which specialties are paid and how much they are paid have to be made. The only way to make sure a call pay program is fair is to put a standardized process in place for arriving at these decisions. A Physicians’ Call Committee can ensure that the burden of every specialty is considered and weighed against the burdens of others. Furthermore, a committee can continue to monitor a program and review it annually so that it remains fair in the face of change. 


With a standardized process in place, physicians no longer feel as though they are in competition with one another for the same call pay dollars. Even though everyone isn’t paid the same amount, they understand that the program has been established fairly. Typically, this alleviates agitation around call pay, strengthens working relationships between physicians, and improves alignment between administrations and medical staffs. 


We can help 


All aspects of hospital pay are under increased scrutiny. It’s better to take the time to evaluate the fairness of your pay culture than to wait until a discrepancy is called into question. To learn more about our Physicians’ Call Committee and Call Pay Solution, download our latest white paper



Complete the form below and receive a copy of our latest white paper, Call Pay Solution: Stabilizing call budgets with a fair and sustainable approach

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