June 30, 2019

(Originally published June 18, 2019 in the Cincinnati Business Courier)

TriHealth intends to increase the minimum wage for employees by 30 percent to $14 an hour, and CEO Mark Clement said he hopes the move by Greater Cincinnati’s fourth-largest employer inspires other hospital systems to boost pay for entry level workers.

“We felt we should work hard to be able to provide our team members with what we call a living wage,” Clement told me.  “It is for us the minimum income necessary for one of our team members – or any worker – to meet their basic needs: food, housing, clothing and the like.” 

The hope is a such a wage will help employees live happy, healthy and productive lives. So they are better able to care for their families – and the patients TriHealth serves, Clement said.

The Walnut Hills-based system employs 12,332 people, and about 700 of them now make a minimum of $10.75 an hour for all types of jobs except seasonal workers. 

However, several thousand TriHealth employees who have worked there longer than their entry level colleagues will also be affected because their pay will be boosted to maintain equity, Clement said. He estimated that TriHealth’s total investment to raise the minimum wage will be more than $6 million annually.

Clement noted that the current Ohio minimum wage is $8.55, which means TriHealth’s minimum will be about 60 percent higher. The federal minimum wage is $7.25.

“The state and federal minimum wages haven’t kept pace with the cost of living,” Clement said. “While we pay well above the state and federal minimum wages, we reflected on the role we play in the community and our commitment to our team members and underlying values of respect for our people and equity and justice.”

David Cook, human resources chief at TriHealth, said the system didn’t consider raising the minimum wage a competitive move. 

“Our hope is that other health systems will follow suit,” Cook said. “The overall impact – what we really would like to see – is that it creates a more financially sustainable community.” 

The minimum wage varies at local hospital systems, with some above what TriHealth now pays. 

At Cincinnati Children’s, the city’s largest hospital and second-largest employer, the minimum wage is $11 – but a spokesman said the medical center is in the process of reviewing that. 

At St. Elizabeth Healthcare, which is based in Northern Kentucky, the lowest starting rate is $11.51. 

Mount Auburn-based Christ Hospital declined to disclose the minimum it pays. However, "Christ Hospital is committed to surveying the local market place to determine a fair and reasonable rate for each respective job across our network,” spokesman Bo McMillan said.

UC Health is finalizing a plan to roll out an increase in its minimum pay in the coming fiscal year. “Our intention is to go well beyond minimum wage and offer associates a living wage, one that seeks to provide an income which covers necessary and discretionary expenses yet is intended to enable associates to contribute to savings,” spokeswoman Amanda Nageleisen said. “This is right to do. ... While UC Health complies with all state and federal minimum wage laws, it is our intention to do much more.”

Bon Secours Mercy Health is "continuing our path of migrating associates to a $15 an hour just wage," spokeswoman Nanette Bentley said. The Cincinnati-based, statewide Mercy system "is committed to justice in total compensation, including pay, affordable health care and retirement" benefits.

TriHealth intends to increase its minimum wage in two steps over the next 18 months. The system’s fiscal year starts in July, and the plan is for the first increase to occur early in the first quarter of 2020. The second increase will happen in the same time frame in 2021.

The challenge, Clement said, was figuring out how to do that while continuing to provide high-quality and cost-effective health care.

“We’re roughly a $2 billion operation,” Clement said. “We all felt that if we couldn’t find the dollars to fund a $6 million investment on a $2 billion budget, then shame on us."

TriHealth built the $6 million into its budget by identifying savings in areas other than wages and benefits, such as lowering the costs of supplies, improving pricing and similar improvements in revenue cycle. 

“What is equally important to point out is this transition to a living wage is not in lieu of our normal annual wage and salary adjustments we make to move people along in their ranges as well as to be competitive in the external labor market,” Clement said. “It is in addition to what we would normally do in year-over-year wage adjustments.”

TriHealth also will maintain a program that provides a subsidy for lower wage earners to have health care coverage at up to half the cost of employees earning more of a living wage.

“Although we compete for labor and talent within the local market and even the regional market, this is one of those few areas where we think it is in the best interest of the community – and economic health of the community – for other health systems to consider this,” Clement said.