Growth in hospital employee compensation slows

NEWS IN BRIEF — Posted Nov. 16, 2009

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The amount of money private-sector hospitals spent on employee salaries and benefits grew less than in previous quarters, going up only 0.4% in September, according to a report issued by the Bureau of Labor Statistics Oct. 30.

While in line with the economy as a whole, it's another indication that the health sector is taking a hit in this economic downturn.

The Employment Cost Index also is considered an indicator in the growth -- or lack thereof -- of employee salaries and other benefits. Private-sector hospitals experienced 0.8%inflation in total compensation costs in September 2008 and 0.9% in June 2008. There was no change in the cost of total compensation for employees at state and local hospitals in September 2009, although compensation had gone up 0.5% in September 2008 and 0.8% in June 2008.

Wages generally account for 70% of compensation, with benefits such as paid leave, bonuses and insurance making up the remainder.

When all industries were lumped together, the average cost per private-sector worker went up 0.5% in September. State and local government workers as a whole did not experience any growth.

Note: This item originally appeared at

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