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Increasing Healthcare Worker Wages: Calculate Your Practice's Impact
The minimum wage for healthcare workers, including administrative staff, is increasing in parts of the country, with many states planning to soon follow suit. Staff burnout, turnover and rehiring are also increasing overhead costs and operational inefficiencies for practices. For specialty practices in California, labor costs are increasing 30% starting in 2024 wages will grow to $21 per hour and phase up to $25 per hour in 2025. Nationally, the American Medical Group Association reports staffing costs are up 10% and growing. Adding to the increase, 56% of medical practices report they are increasing benefits packages to stay competitive in the market for competent employees.
What’s the impact on your practice’s revenue when wages increase by 10%, or more?
Healthcare Salary Wage Increases
Cost Formula
Calculation:
Staff: Total number of Front Desk Staff
X
New Minimum Wage: Determine Monthly Wage by taking your current minimum wage and increasing it by 10%
X
Additional Labor Costs: The National Average Burdened Labor Cost is 24%
=
Total Increase in Cost: New Salary + Benefits Overhead Cost
Example:
FTEs: 4 Front Desk Staff
X
New Minimum Wage: $1K/Employee/Week [At $25/Hour at 40 hours a week]
X
Additional Labor Costs: 24%
=
New Salary + Benefits: $198K
In this example, a practice in California will see salary expenses go from $124,000 to $198,400 per year for salary + benefits. Causing the practice to incur a $74K increase in costs.
Lean into Automation to Avoid Cost Spikes & Overcome Staff Shortages
No one is immune, but you can take action to mitigate costs and operational inefficiencies all in one fell swoop!
The only answer is automation.
A recent report on the State of Patient Access in 2023 notes that 40% of providers say staff shortages have been offset by technology improvements. Additionally, most healthcare organizations are automating front-end tasks, with 66% using self-check-in or kiosks for office visits.
Whether you’re looking to overcome healthcare wage increases or an existing staff shortage, automation will help you unlock your practice’s growth potential — helping you drive more profits than ever before.
Automate patient registration, scheduling, eligibility verification, payments and communications to reduce staff work to the point where you can reallocate or even reduce full-time employees.
Automation will provide you with a way to reduce the cost of your FTEs while increasing data accuracy and reducing billing errors, putting revenue back in your pocket!
Can Your Practice Afford to Overlook Automation?
Learn More About Clearwave, the Patient Revenue Platform™ for High-Growth Practices.