This year, managed care and the aggressive consolidation that it triggers is taking its toll on provider-based marketing/PR compensation, causing salaries to dip or remain flat, according to William M. Mercer, an Atlanta-based employee benefits firm that advanced HPRMN its 1998 Integrated Health Networks Compensation Survey.
To offset flat salaries, providers are retaining top-tier talent with a variety of compensation tactics that are tied more than ever to performance. "Organizational performance is usually the most important factor in determining payouts, with measures typically including profitability, revenues and customer satisfaction," write the authors of the IHN Trends and Commentary summary, exclusively released to HPRMN.
In this special issue, HPRMN's 1998 Salary Survey & Exclusive Guide to Executive Recruiters, has been expanded to highlight the comprehensive findings of the Mercer study as well as market research from the American Hospital Association and Marshall Consultants, an executive search firm with offices in New York and Malibu, Calif.
For marketing/PR directors, the 1997 average annual base salary decreased to $69,600 from $75,900. Depending on the provider, a modest base salary can be leveraged with aggressive incentive packages that can range from short- and long-term incentives and spot bonuses to more generous salary increases.
Fifty-four percent of the providers Mercer surveyed are providing some form of short-term incentive pay opportunity to their professional/technical employees.
For marketing/PR directors who were eligible for incentives, compensation shot up to $91,100 on average. And for second-level hospital PR executives, the average base salary of $55,300 jumped to $69,100 with incentives.
While there is no "one-size-fits-all" approach to determining compensation, providers are becoming more flexible in assessing performance, according to the survey. Key approaches include:
- Expanding salary ranges to better accommodate increased pay opportunities for outstanding performers in key roles;
- Collapsing the number of salary grades to create pay opportunities associated with career progression;
- Providing managers greater latitude to "strategically" position the pay of key employees within established salary budgets.
Next year, salary increases are expected to remain modest at 4 percent for executives, 3.7 percent for management and 3.6 percent for technical/professional executives according to the survey. However, these increases are for incumbent executives and do not recognize the additional responsibilities and expanded roles of executives, particularly in the areas of merger and acquisition planning, new business development and managed care risk assumption.
In terms of incentive rewards, the trends are expected to remain closely aligned to the organization's performance. Total compensation will become competitive when the organization meet its business plan objectives and above market when performance expectations are exceeded.
The survey indicates 67 percent of incentive packages are based on organization-wide measures, with short-term incentive opportunities providing an additional 26 percent of base pay for target performance and 37 percent of base pay for maximum performance.
Marketer Priorities
So how are marketers prioritizing their responsibilities given the industry's increased focus on performance? PR, physician-hospital relations and patient satisfaction top the list of organization-specific priorities with a 90 percent combined ranking of "very important" and "somewhat important," according to a new study by the AHA's Society for Healthcare Strategy and Market Development and the Opinion Research Corp. International in Evanston, Ill.
The study, titled "Marketing by the Numbers: Trends in Healthcare Marketing & Advertising Expenditures," surveyed a cross-section of 124 freestanding hospital-based and integrated delivery system-based communicators.
Other issues that are high on the priority list include managed care contracting and consumer-directed advertising at 86.9 percent and 86.7 percent combined importance rankings, respectively.
However, when marketers were asked what their personal career goals were, PR once again rules at 93.4 percent and consumer-directed advertising rises to the No. 2 spot. Managed care contracting and physician-hospital relationships slips to 43.5 percent and 81 percent, respectively. This disparity will have to be resolved with clearer performance expectations from the provider since managed care strategies and physician relations are major drivers of market share, says Steve Steiber, an SVP at Opinion Research.
The AHA report costs $20 (AHA members) or $35 (non-members) and can be ordered by calling 800/AHA-2626.
(William M. Mercer,800/333-3070; Opinion Research, Steve Steiber, 847/492-2500)