From ACHE's Division of Research
August 2006

Background

In 2002, the American College of Healthcare Executives (ACHE) conducted its first study of compensation for postgraduate fellows in health services administration. That survey, and this year’s follow-up, replaces our earlier source of compensation benchmarking data, anecdotal information provided by existing and potential sponsors of such fellowships. Health administration students and faculty and fellowship sponsors benefit from understanding compensation trends and having current information. Accordingly, ACHE conducted another compensation survey in 2006 to provide more current information for all the concerned parties.

Methods

ACHE's Division of Research selected individuals in the ACHE affiliate database who had identified themselves as “fellow” when they completed the job title portion of their initial membership application or when they completed the update to their affiliate directory profile in early 2006. Staff manually sorted the list to exclude academic faculty (teaching fellows), researchers (postdoctoral researchers), practicing clinicians and armed forces managed care fellows. The remaining 277 individuals appeared by their title, degree and name of employer to fit a profile consistent with that of a typical administrative fellow.

In April 2006, staff updated the 18-item questionnaire sent in 2002 to obtain information regarding postgraduate fellowship base income, incentive compensation, employment benefits, and demographic information about the fellow and the sponsoring organization. As in 2002, the instrument was converted to an Internet-based questionnaire. An e-mail cover letter was sent to the 277 individuals in our sample that contained a link to the online questionnaire.

The first wave of e-mails was sent to all 277 individuals on April 21. It produced 128 usable responses. Staff sent a second wave on May 4, which produced another 23 usable responses. A total of 151 usable responses were received for a response rate of 55 percent.

A nonresponse analysis was conducted, which is presented in Appendix A. Nonrespondents were similar to respondents in regard to their ACHE membership status (i.e., Member, Diplomate or Fellow), gender, highest degree attained, field of highest degree and ACHE geographic district. However, respondents were more likely than nonrespondents to have been recent graduates and to be current affiliates of ACHE.

Findings

Characteristics of Respondents and Work Arrangements

As shown in Table 1, the median age of fellow respondents was 26.8 years old. The oldest fellow was 49 and the youngest was 23. Female respondents outnumbered males by almost 2:1 (65 percent female, 35 percent male). Five respondents were licensed in nursing, two were licensed physicians, two were lawyers and one was a licensed nursing home administrator. On average, fellows had acquired 1.25 years of work experience subsequent to receiving their bachelor’s degree and prior to taking their fellowship.

Most fellowships are established for one year, and 68 percent of the respondents worked under this arrangement. However, 30 percent said they were committed to their fellowship for more than a year, most of whom expected to work for two years. About half of the fellows were hired expecting to continue their employment with that organization after completing the fellowship. The remainder did not have this expectation.

On average, fellows worked approximately 53 hours per week—47 hours were spent in the office, with the remainder split between places away from the office and at home.

Characteristics of Sponsoring Organizations

The majority of fellows took their positions in hospitals—especially hospitals that are part of a health system. In fact, nearly three out of four fellows worked in either a system hospital (51 percent) or at system headquarters (24 percent) (see Table 2). Eleven percent were based at freestanding hospitals, and 10 percent worked in other settings such as a professional association, a medical group or a continuing care retirement community.

Nearly three out of four fellows worked in nonprofit organizations, 5 percent worked in investor-owned settings and the remainder worked in government facilities. Sixty-four percent of fellows were employed in urban settings; another 22 percent were in suburban settings. Only four percent classified their location as rural. More than 60 percent of fellows worked in very large organizations with annual revenues exceeding $200 million.

Fellows’ Compensation, Incentives and Perquisites

Table 3 shows the distribution of fellows’ base income (not including income from other work such as consulting, teaching or publishing). The median income of fellows in 2006 was $43,604. Only 2 percent of respondents reported earning less than $35,000 per year, and 14 percent were paid $50,000 or more; nearly one-half earned between $40,000 and $45,000 per year.

About one-fifth reported that they were eligible for incentive pay or bonuses, and 38 percent indicated that their compensation could be otherwise increased. Of those eligible for incentive/bonus earnings, more than half were required to accomplish a combination of individual and corporate objectives to qualify for the incentive. For more than three-quarters of these fellows, the maximum increase over their base salaries that they could earn amounted to no more than 5 percent.

In terms of benefits apart from salary and bonus, nearly 90 percent of fellows received paid holidays and paid time off. Three-quarters received full payment for their travel costs associated with professional development, and 60 percent received full payment for tuition costs associated with professional development. Other perquisites such as association dues and life, disability, medical and dental insurance were more often partially than fully paid for fellows.

Comparison With 2002 Survey Findings

Since the previous survey conducted in 2002, the percentage of females in fellowships has grown considerably and, correspondingly, the percentage of males has decreased. Nearly two-thirds of fellows in 2006 were female compared to just over one-half in 2002. In addition, the proportion of fellows in government-controlled organizations grew from only 6 percent in 2002 to 22 percent in 2006. While fellows’ median base compensation increased nearly 11.7 percent ($39,055 versus $43,604), there has been a noticeable reduction in fully paid fringe benefits and a growth in partially paid fringe benefits. The reductions are most dramatic for medical, dental, life and disability insurance. For example, 80 percent of fellows in 2002 received fully paid medical insurance, but in 2006 only 26 percent received this benefit.

Conclusion

This survey of postgraduate fellows was designed to assist this group and their sponsoring organizations in learning about the demographic and educational characteristics of individuals taking on preprofessional roles in healthcare management and to discern the types of organizations willing to provide these individuals with needed managerial experience. We anticipate continuing to conduct similar surveys in future years to track changes in the composition of the fellow cohorts, the types of sponsoring organizations offering such opportunities and the resources that are committed to the fellowship enterprise.