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Compensation Challenges in Community Health Centers

May 20, 2024

Since the beginning of the COVID-19 pandemic, community health centers have faced compensation challenges to attract and retain qualified talent. The National Center for Health Workforce Analysis recently noted that among primary care providers (physicians, nurse practitioners, and physician assistants within primary care specialties), staffing shortages, low compensation compared to other health occupations, increasing burnout, and an aging workforce are the main concerns. [1] These challenges also crossover into other roles within community health centers—particularly medical assistants, dental assistants, nurses, and behavioral health clinicians—causing health centers to increase wages. 

The recent passage of the bipartisan spending package, which includes more than $1.8 billion in discretionary funding for community health centers and builds upon the bipartisan $4.4 billion prospective mandatory funding package recently signed by law,[2] means a large boost for centers to continue providing services. The funding now enables health centers to budget for pay increases or human capital programs as appropriate. 

Community health centers should revisit their total rewards philosophy, which serves as the baseline upon which compensation decisions are made and ensures that it reflects an organization’s overall culture and human capital perspectives. A clearly defined philosophy will enable an organization to design solid compensation programs that serve to accomplish the key goals of attraction, retention, motivation, and engagement. 

In line with the total rewards philosophy, community health centers can employ one or more of the following tactics: 

  • Conduct a comprehensive compensation study to better understand the external marketplace. Look beyond community health centers to understand the broader healthcare and/or general industry marketplace, which may influence compensation levels. 
  • Establish a wage floor minimum above the minimum wage for entry-level positions, which may be more reflective of the local marketplace. 
  • Develop a salary structure to formalize compensation administration and ensure that salaries are competitive with the external marketplace and aligned with the internal hierarchy.
  • Design career ladders and additional training to allow for professional development and career progression.
  • Implement bonus opportunities across all levels/types of positions based on the achievement of health center metrics.
  • Distribute total rewards statements to employees to ensure they are aware of the full value of compensation and benefits provided to them. 

If you lack the staff or time, consider the services of a compensation advisor that has experience in the healthcare sector to help develop and effective, ongoing program. 

[1] State of the Primary Care Workforce 2023; National Center for Health Workforce Analysis; November 2023. 

[2] House and Senate Pass Bipartisan Spending Package, Including More Than $1.8 Billion for Community Health Centers; National Association of Community Health Centers (NACHC); March 25, 2024. 

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Sara Schmidt

Sara Schmidt is a Director with Compensation Resources. Sara has 25 years of compensation consulting experience, with a focus in the health care, not-for-profit, insurance, and manufacturing industries.

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