It's the classic good news-bad news situation for home medical equipment providers: Salaries seem to be holding steady — but that's for employees who have kept their jobs.

Over the past 12 months, nearly one in three HME providers (31 percent) participating in HomeCare's Salary & Benefits Survey have had layoffs.

That stat and others across the survey show without a doubt that the industry's tumultuous conditions, worsened by the nation's sputtering economy, have extracted a heavy toll.

Take employee benefits, for example. Fifty-seven percent of providers reported they had made changes to their company's health care plans in the past year: 35 percent changed/modified plans to save the company costs, 16 percent have done so to save employees costs and 27 percent have increased employee premiums.

In a second telling example, 84 percent of providers in the magazine's 2008 survey gave employees raises averaging 5 percent. This year, the average raise was also 5 percent, but only 53 percent of providers handed them out.

Over the past 12 months for providers in HomeCare's survey group
31%	have laid off employees
38%	have frozen salaries
33%	have left positions vacant
57%	have made changes to health benefits
14%	have reduced employees' work hours
53%	gave raises vs. 84% in 2008
29%	have dropped bonuses
26%	have reduced commissions

Thirty-eight percent of providers in the 2009 survey group have frozen salaries, another 13 percent have reduced them and 14 percent have reduced the hours of some employees. Thirty-three percent have left an open position vacant. Twenty-nine percent have dropped bonuses for some (16 percent) or all (13 per-cent) employees. Twenty-six percent have reduced commissions.

The reasons for all this are exactly what you might expect. Here's a representative sample of answers providers gave when we asked why they had laid off staff, cut back hours and/or reduced salaries or commissions:

• "Because Medicare allowables have been so cut and coverage items have been deleted. Also, the new regulations for oxygen are killing us."

• "Because we are down 20 percent-plus on the year. The money has to come from somewhere."

• "Faced with the competitive bid, we closed two branches and reduced staff. We also cut back hours in the warehouse and delivery."

• "Shrinking profit margin and increased expenses, which include accreditation and increased length of time of collectibles."

• "Due to the oxygen cut in January, we are unable to increase sales as fast as we are losing O2 revenue."

• "The volume of work has remained the same although reimbursement has been reduced significantly. There is no money to pay these people."

On the flip side of the survey, however, the news isn't all bad. Forty-eight percent of participating companies added staff in the past year, with most of those positions (46 percent) in sales. Almost a third (37 percent) created new job functions, and 46 percent have hired to fill open positions. A smaller percentage has added benefits (11 percent) and bonuses for some (5 percent) or all (3 percent) employees.

Moving to 2010, providers also remain somewhat optimistic. Only 15 percent said they anticipate layoffs next year. If conditions don't improve, however, half (49 percent) said they are prepared to take further action concerning staffing or salaries. With any more cuts to oxygen or power wheelchairs, 44 percent said they would reduce or freeze salaries, 40 percent will lay off staff and 37 percent will reduce benefits.

For many, a lot hinges on the outcome of competitive bidding, they said.

"We can't plan ahead," wrote one frustrated provider. "It's a problem … Health care reform can increase business, but competitive bidding can put me out of business."

Another summed it up this way: "The question is not 'will we hire' in 2010. The question is 'will we remain in business.'"

2009 Salary & Benefits Survey Questions

• Survey Fast Stats

Benefits & Bonuses

• How have your benefits changed in the past 12 months?
• If you offer medical insurance, over the past 12 months, have you:
• How has your bonus offering changed in the past 12 months?
• What determines employee bonuses?
• Do you pay bonuses to:
• Common Employee Benefits

Raises & Reductions

• Over the past 12 months, has your company:
• Have you laid off staff in the past 12 months?

Employees

• Have you added staff in the past 12 months?
• If you have added staff, in what positions?
• Which of these licensed/credentialed positions do you employ?
• Which of these positions do you employ?
• How many employees do you have?
• If employees have left in the past year, have you:
• If you have laid off staff, in what positions?
• Do you link salary increases to:

Annual & Hourly Salaries

• Average annual salaries by job title
• Average hourly wage by job title

About 2010

• Do you anticipate layoffs in 2010?
• How will your staffing change in 2010?
• When economic/industry conditions improve, will you:

Other Information

• About This Survey
• Recent Salary & Benefits Surveys

• Return to "2009 Salary & Benefits Survey Questions" story