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Ballad Health to invest $10M in nurse raises

Hank Hayes • May 7, 2019 at 9:00 AM

JOHNSON CITY – Ballad Health announced on Monday a $10 million investment in pay increases for nurses.

Ballad Health Executive Chairman, President and CEO Alan Levine, in an email sent to team members, said the investment will be with an annualized increase in its direct patient care nursing and supporting staff wages for the following positions: Acute care registered nurses, licensed practicing nurses (LPNs) and nursing assistants in select roles whose primary responsibility is providing direct inpatient care; scrub techs, long-term care LPNs and certified nursing assistants, clinical LPNs and certified medical assistants and behavioral health techs.

The move will impact “several thousand” Ballad Health employees, said Levine.

“These areas of focus have been most impacted by the national shortages of health manpower, and have consistently shown the greatest number of vacancies throughout the nation, and certainly our experience is no different here,” Levine pointed out. “We compete heavily for these professionals and must continue to do so.”

The announcement was made during National Nurses Week.

“Our nurses and those who work with them in the provision of direct patient care are heroes,” Levine added. “Each of us does important work, and that, no doubt, is an important fact. Our amazing nurses would be the first to say they could not do their work without all the people who make a hospital or health care facility operate. And that is part of the humility that makes them great servants. However, it is also true that in an environment where we face a significant national shortage of these critical health care providers, a shortage so significant that the productivity of our nurses and direct bedside caregivers is as high as it has ever been, it is important we appropriately recognize the sacrifice that is being made.”

The pay increases for existing team members in these roles will take effect June 23. Also beginning June 23, the starting hourly rates for new hires in these affected positions will be increased. New hires in these positions who start between now and June 23 will start at today’s rate and be increased to the new rates on June 23, according to Levine.

Levine explained the investment could be done because Ballad Health has been successful in turning prior year operating losses from what were two independently operating rural health systems into operating gains by its new, merged health system.

He also pointed to the Trump Administration, led by actions from the Centers for Medicare and Medicaid Services (CMS) within the U.S. Department of Health and Human Services, has made a major rule change to hospital reimbursement that, after decades of harming hospitals in rural and non-urban communities while favoring larger communities, now provides some relief to the rural and non-urban areas.

“They have proposed a change to the antiquated and flawed Medicare funding formula adjustment called the Medicare Area Wage Index, which has served to suppress Medicare funding for hospitals in rural and non-urban communities,” Levine said. “This proposed change indicates that Washington finally understands that rural health systems, like ours, have been historically unable to keep up with the real cost growth of nursing and other direct care providers. Rural health systems are paid significantly less for services we provide, even though they are the exact same services provided in larger urban hospitals. This has resulted in a major disparity in rural health systems’ ability to keep up with the cost of direct caregivers, and is a major factor contributing to the closure of rural hospitals in America. While CMS has proposed a new rule change which will benefit rural health systems, and help close this unfair gap, the rule is not yet final. We certainly hope CMS will finalize the rule, as if they do, it will enable systems like ours to look beyond direct care nursing services for targeted wage adjustments in some other areas which may be needed. To be clear, if CMS finalizes this rule, it will enable Ballad Health, and systems like ours, the ability to review compensation of additional targeted positions which merit adjustments, but which the systems have been unable to address due to the lack of revenue related to the flawed Medicare Area Wage Index.”

That wage index, Levine stressed, is higher in places like Asheville, North Carolina.

“If our system was based in Charlotte, instead of being a $2 billion system, we would probably be a $2.2 billion system,” Levine said. “That’s why there’s such a gap in wages in hospitals in rural areas and places like ours.”

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