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Nurse Compensation Remained Flat Across Most Care Settings

On average, nurse compensation increased just $1,000 from 2016 to 2017, reaching $81,000, a new survey showed.

Nurse compensation

Source: Thinkstock

By Jacqueline LaPointe

- Nurses did not see a significant boost in average annual compensation in 2017, a recent survey of over 10,200 registered nurses (RNs), and licensed practical nurses (LPNs) revealed.

The average earnings of a full-time RN were $81,000 in 2017, up just $1,000 in two years, and LPNs saw no significant change in average annual compensation during the same period, Medscape reported.

“These findings suggest a flattening of RN and LPN wages overall from the previous year and very little change from two years ago,” the report stated. “This trend could be partly related to increasing retirements of older (and higher-paid) nurses. Their replacement by younger, early-career nurses could have the effect of lowering average nurse wages.”

Retirement has had the opposite impact on the salaries of other healthcare providers, though.

Physicians retirement is a major driver of the recent physician shortage. The Association of American Medical Colleges (AAMC) projects the industry to face a shortage of up to 120,000 doctors by 2030. The projected physician shortage is getting worse, increasing from the 2017 estimate of 104,000 physicians by 2030.

READ MORE: Falling Productivity Stifles Physician Compensation Boost in 2017

The sizable portion of practicing doctors at or nearing retirement age partially drove the increased physician shortage estimate this year, AAMC noted. Physicians aged 65 years or older represented 13.5 percent of the active workforce, and those between 55 and 64 years old accounted for almost 27.2 percent.

Doctors may also start to retire sooner in light of the persistent and widespread physician burnout problem, AAMC pointed out.

Facing a physician shortage, doctor compensation has increased. For example, the average annual earnings of a primary care physician increased over 10 percent over the past five years because of a severe shortage of primary care providers, the Medical Group Management Association (MGMA) recently reported.

Nurse practitioner and physician assistant compensation also recently saw significant growth. About one-half of the advanced practice clinicians reported a boost in income from 2015 to 2016, with 12 percent seeing their compensation grow eight percent or more during that time, PracticeMatch reported.

Researchers hypothesize that advanced practice clinician salaries may be increasing as healthcare organizations try to fill the gaps left by the physician shortage.

READ MORE: Physician Shortages Drive Increases in Provider Compensation

Nurse compensation, however, does not seem to be following the trend observed by other healthcare providers. The Medscape study’s authors even pointed out that RNs and LPNs would have seen a reduction in compensation in 2017 if the report adjusted for inflation.

The study showed that practice setting matters when it comes to nurse compensation. The highest-paying setting is still the hospital, with RNs making an average of $84,000 per year for delivering inpatient care and $82,000 for delivering hospital-based outpatient or clinic care.

Greater salaries may be pulling more nurses to practice in the hospital setting, the survey added. The hospital continued to be the primary employment setting for RNs, with 39 percent working in inpatient settings and 13 percent practicing in hospital-based outpatient settings in 2017.

However, health plans may be giving hospitals a run for their money. Although fewer nurses worked in the health plan setting, health plans paid just as much for RN work as hospitals ($84,000 per year).

The average annual earnings of a health plan RN also increased from $78,000 in 2016, while hospitals did not increase nurse salaries from 2016 to 2017, according to the survey.

READ MORE: Physician Compensation Models Need Value-Based Reimbursement

Occupational health settings also paid just as much as hospitals, researchers added.

RNs notably made the least amount of money in school/college health services ($66,000), public health/community health ($69,000), non-hospital-based medical office or urgent care clinic ($71,000), and hospice/palliative care ($73,000).

Researchers also noted that average RN wages very modestly increased in every major work setting from 2016 to 2017 except for hospice/palliative care. Nurse compensation for hospice/palliative care decreased significantly, falling $3,000 on average.

For LPNs, the survey showed that skilled nursing facilities and other long-term care organizations paid the most.

The settings paid LPNs an average of $48,000 per year in 2017. Although, wages for LPNs in skilled nursing facilities and long-term care organizations slightly decreased compared to 2016.

Gender also played a part in nurse compensation rates, the survey uncovered. The gender wage gap persisted for the fourth consecutive year, with male nurses earning $4,000 more than their female counterparts across the board.

“Ours is not the only salary survey to find that men are paid higher wages than women in nursing,” the report stated. “But in spite of this persistent and apparently universal gender wage gap, we still lack firm data to inform us why this occurs.”

“We are hampered by the fact that only eight percent to ten percent of nurses are men, resulting in a large imbalance in the size of the dataset,” the report continued. “In our survey, only eight percent of RN respondents were men.”

In light of stagnant compensation levels, most nurses did not feel satisfied with their salaries in 2017. About 44 percent of RNs and 54 percent of LPNs did not feel fairly compensated, the survey showed.

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