Ericka Waidley, MSN, RN, has more than 20 years of healthcare experience. She has worked in a variety of clinical roles, as a front-line manager, and as an executive. Now she has a consulting company, EKW and Associates, and is working on her PhD at the Fielding Institute in Santa Barbara, Calif.

By Ericka Waidley, MSN, RN
August 5, 1999

Q: Can an employer regularly require mandatory unpaid overtime for salaried employees? By “regularly,” I mean four to six hours on Saturday every four to six weeks. Is there any recourse for these employees?

A: Most salaried readers will not like this answer. The very definition of a “salaried” or “exempt” employee means that the employee is expected to complete all aspects of the job in as many hours as it takes. In contrast, an hourly employee is expected to complete a certain job or tasks in a specified number of hours.

Most salaried positions in the healthcare industry are at a management or supervisory level. These positions often have a 24-hour level of responsibility built into the job description. This 24-hour responsibility includes oversight of both human resources and operations. It is not unusual for many hospitals to require the management level to rotate “house” coverage. The number of managers in the rotation cycle usually determines the frequency of house-coverage rotation. If you are one of four to six unit managers or supervisors, you might be scheduled to “cover the house” every four to six weeks. In some cases the clinical salaried positions (such as clinical specialists, educators, and case managers) may also be included in this rotation.

Because these positions are designed to allow responsibility for human resources and operations, there is built-in flexibility for managers to schedule themselves to meet the needs of their units or departments. Managers often work off-shifts and weekends to complete all of the expectations for their role. Their salaried status makes it more convenient for them to do this and to have autonomy over their schedules.

It is each manager’s responsibility to balance the needs of patients and staff with the manager’s personal need for time off. If you are regularly scheduled to cover the house, fill in on weekends, or cover off-shifts, then you may want to discuss with your manager what is acceptable in recouping this time. Although it probably won’t be an hour-for-hour replacement, there should be some flexibility in your workweek or month.

Q: There is a lot of confusion and misunderstanding about capitated contracts and shared risk contracts. What are the differences between them?

A: Healthcare reform has been an issue for national debate since the 1980s. At that time, Congress increased its focus on cost containment and incremental reforms, which reduced federal payments to most healthcare providers. Although there have been many attempts to achieve cost containment and reform, no one proposal has done the trick. The budget deficit, along with an aging population and changing demographics, ensures that the issues of healthcare reform and reimbursement will continue far into the next century.

Because we are seeking to decrease costs, increase efficiency, and maintain quality of care, various ways to contract for care reimbursement have evolved. One such method is through capitation agreements.

Capitation refers to reimbursing hospitals on a per-member-per month basis to cover all hospital costs for a defined population of patients. The payment may vary slightly, but in general it is a predetermined, negotiated amount. In this scenario the hospital carries the entire financial risk for institutional services for the membership. If the hospital cannot provide the negotiated services itself, the costs for these services are deducted from the capitation payment.

The advantage of capitation is that it can be budgeted (based on number of members, services required, etc.) ahead of time and it can lay out all of the risks for institutional expenses. The disadvantage is that it is difficult to quantify the savings of a provider’s improved utilization.

A shared risk contract is similar to a per diem arrangement with an HMO. The hospital gets reimbursed (usually a percentage amount) depending on the type of bed the patient is in (ICU, med-surg, labor and delivery, etc.). The advantage of this arrangement is that the hospital gets reimbursed for every patient. However, when payment is made depends on the efficiency of the health plan (in capitated arrangements, a set amount is paid every month on a predetermined date).

At one point capitated contracts looked promising and many hospitals were competing for them. However, with more and more hospital-based responsibility for payment, contracts in general are not as attractive as they once were.