Health care giant UPMC is bumping up its starting wage to $15.75 an hour on Jan. 1, a 5% increase since the start of the year at its urban hospitals and part of a larger package of wage and benefit enhancements announced on Tuesday.
The salary and benefit increases rolling out at Pennsylvania’s biggest employer were on top of a $500 bonus to be paid to each of some 90,000 UPMC employees — totaling more than $45 million — that President and CEO Leslie C. Davis told staff about in an early morning email Tuesday.
Bonuses and wage and benefit increases are meant to show “appreciation of your commitment to our organization and the vital work you do,” wrote Ms. Davis, who has led the health system since August.
The pay changes come at a time when the health care industry in general has been looking for workers as many burn out after months of dealing with the pandemic and as employers of all sorts are struggling to fill jobs. For its part, UPMC has thousands of job openings across the Pittsburgh-based system’s 40 hospitals.
Employees will get the bonus money Nov. 26.
Meanwhile, UPMC Chief Human Resources Officer John Galley on Tuesday outlined the wage and benefit improvements set to go into effect Jan. 1, including the starting salary increase for janitors, dietary aides and other service workers. Workers at UPMC’s urban hospitals saw starting wages increase to $15 an hour in January.
“It was prompted by the desire of the senior team to say thank you to employees,” Mr. Galley said in an interview. “They’ve been under so much pressure for the last 20 months, handling the patient volumes we’ve had” due to the COVID-19 pandemic.
The new entry-level pay translates into $33,000 a year and a total reward package, including benefits, of $50,000, Mr. Galley said.
Health insurance costs will be frozen for employees starting Jan. 1, with no employee paying more for health insurance in 2022 than they did in 2021, Mr. Galley said. Co-pays, out-of-pocket maximums and other provisions will stay the same, meaning UPMC will be picking up the full cost of health care cost increases in 2022.
“It’s such great coverage, but we’re enhancing it for our lowest paid,” he said. “In the 22 years I’ve been here, we haven’t done anything quite like this.”
UPMC is also creating a health savings account for full-time employees who make less than $37,500 a year in salary — $1,000 for a single person, $2,000 for a family — which the hospital system will fully fund. The account covers deductibles and co-insurance, with the money automatically withdrawn from employee accounts, as needed.
Other benefit increases include life and health insurance that’s more affordable for part-time employees and a bigger pool of money for managers to reward good work, Mr. Galley said.
Not all UPMC employees were buoyed by word of the pay hike.
Nila Payton, an administrative assistant at UPMC Presbyterian Hospital in Oakland, said $15.75 was not enough. Instead, Ms. Payton, 41, said she and other UPMC employees are lobbying for $20 an hour plus labor union representation by SEIU Pennsylvania.
“It just doesn’t cut it,” she said about the new starting wage. “It doesn’t help; it doesn't put food on the table. We just don’t get paid enough at $15.75 to pay those bills. It’s my honor to speak up.”
For years, SEIU has been trying to organize hourly workers at Presby — UPMC’s flagship hospital — but a vote for representation hasn’t been scheduled. A majority of workers in a unit must vote in favor of unionization before bargaining for a contract can begin.
The new salary and benefit upgrades also occur as the health system is having trouble filling 6,000 to 7,000 job openings across its 40 hospitals, including 1,000 to 2,000 nurses who could be employed “tomorrow, if we had them,” Mr. Galley said.
That type of shortage is hitting across the industry.
More than half of the states in the U.S. will not be able to fill the demand for nurses over the next five years, when nearly 1 million nurses are expected to leave the profession, according to a new study by Mercer, a New York City-based benefits consultant. Pennsylvania is among five states where the shortfall will be most acute.
“The health care workforce is burned-out following a nearly two-year face-off against COVID-19,” Mercer Healthcare Industry Leader John Derse said in a prepared statement.
“The demands placed on healthcare workers since the start of the pandemic have been unrelenting and overall, this data shows that there will not be enough healthcare workers to fill demand in the near future.”
Officials at Indiana Regional Medical Center and Excela Health have also reported problems filling nursing slots.
WVU Medicine in Morgantown, W.Va., and other health systems have responded by increasing sign-on bonuses, educational and other benefits.
Kris B. Mamula: kmamula@post-gazette.com or 412-263-1699
Correction, posted Nov. 3, 2021: The details on who qualifies for the health savings accounts have been corrected.
First Published: November 2, 2021, 1:51 p.m.
Updated: November 2, 2021, 2:26 p.m.