The healthcare industry is expanding as the baby boom generation ages and seeks additional health services in their senior years. With the number of physicians, nurses, health groups and medical facilities growing, the demand for healthcare administrators, managers and executives will increase proportionally. The number of healthcare administrator positions is expected to grow by 22 percent between 2010 and 2020, faster than the average for all occupations.
There is a strong demand for professionals who can plan, direct and coordinate health services, and healthcare administration salaries will maintain competitive levels as employers seek to attract the most qualified job candidates.
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National Salary Data
The U.S. Bureau of Labor Statistics (BLS) reports that the median U.S. healthcare administrator salary in 2012 was $88,580. This means that half of health administrators earned less per year and half earned more. The lowest paid 10 percent earned $53,940 and the lowest paid 25 percent earned $69,160, while the highest paid 25 percent earned $114,920 and the highest 10 percent earned in excess of $150,560 annually. These figures represent healthcare administration salary national averages; individual salaries vary widely depending on an administrator’s role, employer and geographic location.
Salary Variations Among Employers
The BLS reports that nearly 300,000 people are employed as healthcare administrators. These professionals hold positions in a wide range of organizations and settings. Over one-third of health administrators are employed by general medical and surgical hospitals, where the mean annual salary was $104,680 in 2012. About 10 percent of administrators work in the offices of physicians; these positions pay a mean salary of $97,330. Nearly 15 percent of healthcare administrators work in skilled nursing facilities, home healthcare services or outpatient care centers, where median salaries range from about $82,000 to $95,000 annually.
Thanks to advances in medical technology, many medical services previously provided in hospitals are shifting to physician offices. As medical group practices grow, so does the demand for group practice management professionals. A 2010 salary survey for medical practice administrators conducted by the Medical Group Management Association (MGMA) found that medical practice managers for practices with six or fewer full-time doctors earned a median salary of $86,459; the median compensation for managers of practices with seven to 25 doctors was $115,000. Managers of larger group practices with 26 or more doctors earned a median salary of $150,756.
Geographical Salary Variations
The BLS reports that the top five states with the highest mean healthcare administration salaries in 2012 were New York, at $114,550; California, at $113,810; Connecticut, at $111,680; Rhode Island, at $110,930; and New Jersey, at $110,340. Washington, Oregon, Nevada, New Mexico, Florida, Massachusetts, Delaware and Alaska all had mean salaries above $103,110 for healthcare administrators in 2012.
In general, the highest average healthcare administration salary can be found in metropolitan areas. The top paying metropolitan areas in the country in 2012 were San Jose, California, at $133,390; Lawrence, Massachusetts, at $132,740; Reading, Pennsylvania, at $128,240; Santa Cruz, California, at $125,590; and Medford, Oregon, at $125,160.
Healthcare administrators who start out managing small groups can advance their careers by moving into positions with higher levels of responsibility and higher pay. For example, an administrator who begins as an assistant department head or department head in a hospital can advance into a hospital executive position. Some of the highest paid healthcare administrators are top-level hospital executives. According to a Harvard University study, the CEOs of nonprofit hospitals in the U.S. earned an average of nearly $600,000 per year in 2009, while CEOs at larger, urban hospitals earned on average more than $1.6 million per year.