Paying well creates dividends

YARMOUTH, Maine - Good employees can make or break a business and providers must keep up with skyrocketing labor costs to stay competitive. According to a recent Labor Department report, labor costs have jumped 3.2% in the past 12 months, after average yearly increases of only 0.8% from 2000 to 2005. Employees are the company face for many providers and paying well creates dividends, said Rick Perrotta, president of Network Medical Supply in Charlotte, N.C. "We pay our guys 1.5 to almost twice the industry average," said Perrotta. "They know what they're doing. Our customer complaint log has no entries." Constant Medicare changes are partially to blame for labor costs, said Dave Anderson, owner of Andersons Medical Products in Terre Haute, Ind. "The government would like to reimburse on least common denominator wages and yet they want these people to be smart enough to understand products, understand diagnoses and understand Medicare and Medicaid," said Anderson. "This is not a $6-an-hour Wal-Mart position." These jobs require high-caliber employees, agrees Tyrrell Hunter, president of Topsham, Maine-based Majors Mobility. "There's a cost associated with that," said Hunter. "It takes 18 to 24 months before they're fully trained and competent." One of the biggest costs by far to employers is health insurance. Black Bear Medical in Portland, Maine, recently switched to health savings accounts in an effort to keep tabs on the rate of inflation for health insurance benefits, which have seen double-digit increases in annual premiums. "At the end of the day, if you're not giving good benefits, you're not going to have good employees," said President Jim Greatorex. With the average premium for a single, 28-year old woman nearly $300 a month, Dave Mills, co-owner of First Choice in Homecare in Chesapeake, Va., had to institute a cap on insurance expenditures. "We will pay healthcare costs up to a certain amount," said Mills.