You may never get rich, but at least you still have a job. That's a perennial theme in the health care industry, which has traditionally been known for
by Tom Gary

You may never get rich, but at least you still have a job.
That's a perennial theme in the health care industry, which has
traditionally been known for nearly recession-proof employment and
— outside of the physician ranks — modest pay.

The home medical equipment industry fits the pattern. For better
or worse, its rewards are fairly predictable. HME workers and
managers missed out on the New Economy boom of the '90s. But they
also were spared the bust that followed.

This unspectacular but steady side of HME compensation shows up
in our 2003 Salary Survey. Looking back to 2002, we've found no
radical changes in how HME employees are paid or their level of
benefits. Based on the 399 responses received in this year's
survey, about the same percentage of workers — a bit more
than 70 percent — got raises in both 2002 and 2003. The
average raise was 6.4 percent. That puts HME on the generous side
of national trends, at least in this lean year.

Several recent surveys of employers across a wide range of
industries have put average raises at less than 4 percent. In a
report released July 30, Mercer Human Resource Consulting polled
1,700 U.S. employers and found pay increases will average 3.6
percent in 2003. An earlier survey by the Conference Board, a
private research group, said employers were planning to increase
overall compensation by 3.5 percent this year.

As for the job-security side of the equation, unemployment
figures for HME alone are not available. But the U.S. Bureau of
Labor Statistics said joblessness in the broader Education and
Health Services category stood at 4.4 percent in June. That was up
from 3.9 percent a year earlier, but well below the total rate of
6.5 percent; or rates for workers in Durable Goods, 7.3 percent;
Professional and Business Services, 8.5 percent; and Leisure and
Hospitality, 8.6 percent.

The High, the Low, the In-Between

HME may have a few big players, but its pay scales still have a
small-business feel. The gap between top management and the
lowest-paid workers is narrow compared to that of large
corporations in other industries. The average HME chief executive
pay was $82,416; the highest pay reported in the President/CEO
category was $250,000.

Top managers' median pay, the point at which half the reported
salaries were higher and half were lower, was $75,000. Within this
group the pay ranged widely according to the size of the company
these executives were running. The full report shows that average
top pay at firms with $1 million or less in annual sales was
$64,689. At HME businesses earning over the $3 million mark, CEO
salaries averaged $107,022.

Delivery technicians were the lowest-paid in our survey, with an
average salary of $23,560 and a median of $25,000, a third of the
median CEO salary. Hourly employees in this category made an
average of $11.36. This time, the size of the company didn't have
much effect on pay, with the average hourly rate at firms of all
sizes almost identical.

Ranking just below CEOs in pay were pharmacists, who averaged
$72,937 in annual salary. Their median pay was equal to that of the
top executives at $75,000.

This is one case in which a group of HME employees appears to be
paid very close to the national average. According to 2002 BLS
figures, the latest available, pay for pharmacists averaged $1,367
a week, or $71,084 a year. Allowing for some increase since then
due to raises, the 2003 figure would still be at or slightly below
the average for HME.

This is another way of saying that, on the whole, HME businesses
seem able to pay competitive salaries to pharmacists, though the
picture may look much different on the local level, where some
areas might have high costs of living and shortages of qualified
job applicants.

Paying competitive salaries is still a tough challenge for much
of the HME industry. According to Miriam Lieber, a Los
Angeles-based consultant specializing in operations management for
HME firms, “We, as an industry, do not pay enough to maintain
a balance between what we should be able to expect for our staff
and what we are willling to pay for that type of individual.”
From her experience, she adds, customer service and delivery
technician positions are particularly hard to fill.

According to the 2003 Salary Survey, pay in the “Customer
Service/Inside Sales Rep” category ranges widely, from a
reported high of $80,000 a year (for salaried reps) and $35 an hour
to a low of $19,000 a year and $6.50 an hour. The average salary is
$32,846, but the average rate for these employees who are paid by
the hour is $11.74, just above that of delivery technicians.

Customer service managers make a bit more. Their average salary
is $38,032; managers paid hourly make an average of $14.35. In what
may be a sign that HME firms are focused at least as much on
customer satisfaction as bill collection, the customer service
managers' pay slightly edges that of accounts-receivable managers,
who average $36,204 (salaried) and $13.41 hourly.

Common Fringe Benefits

In the competition to attract and retain workers, fringe
benefits are an important consideration. The most popular fringe
benefits offered by the survey respondents are vacations and
holidays, either entirely or partially paid by more than 80 percent
of HME businesses. Medical insurance, sick leave and, in a sign of
the times, cell phone use are other popular benefits.

The full survey report shows that large HME companies tend to
have an advantage in their ability to provide benefits such as
health insurance and retirement plans. The statistics bear this out
for most benefits, but not all of them. Firms with more than $3
million in sales are more likely than smaller companies to pay for
life insurance, medical insurance, sick leave and dental

Of firms over $3 million, 94.9 percent offered medical coverage,
compared to 60.9 percent of companies below $1 million.
Profit-sharing plans and 401(k) plans also are much more common at
larger companies, with 76.3 percent of companies in the $3
million-plus range offering 401(k)s, compared to just 29.1 percent
of the sub-$1 million firms.

But the results also show the smallest companies beat their
larger competitors in offering flexible work schedules. Among the
companies below $1 million, 58.3 percent offered this benefit,
compared to 46.6 percent of those with revenue greater than $3
million. So it might indeed be true that small shops are more
accommodating and less bureaucratic than large ones.

About the Respondents

In May, HomeCare mailed compensation questionnaires to
1,500 randomly selected subscribers asking about salaries,
benefits, raises and more. Of the 399 companies who returned
completed surveys, 300 (75 percent) identified themselves as
HME/service providers, while most of the remaining participants
said they worked in specialty home care, retail pharmacy/drugstore
or hospital-based HME.

The respondents represent a wide range of regions and company
sizes. More than 36 percent were based in the South and another 30
percent were in the Midwest, with smaller numbers based in the West
and Northeast. Two hundred (50 percent) said they operate only one
location, though the survey also includes 27 firms that operate 100
locations or more. Nearly 38 percent reported revenue of less than
$1 million, while 13 percent had revenue of $10 million or

For a complete copy of the 2003 Salary Survey, visit our Web
site at and click on the button titled
“Purchase Exclusive HomeCare Research.”

For the Record: Survey methodology conforms to all
accepted research methods and practices, and the guidelines set
forth by American Business Media - Research Committee, the American
Marketing Association, the American Statistical Society and the
Marketing Research Association. Percentages are based on responses
from 399 companies. Not all respondents answered every question,
and some totals may add to more than 100 percent due to multiple

Lowest Average Salary
Delivery Technician $23,560
Highest Average Salary
President/CEO $82,416
What is your company's primary business?
HME/Service Provider 75.0%
Specialty Home Care 3.8%
Retail Pharmacy/Drugstore 9.3%
Hospital-Based HME 3.3%
Other/No answer 8.6%
How many locations does your company have?
1 50.0%
2 14.8%
3-4 9.8%
5-9 8.8%
10-99 6.3%
100 or more 6.8%
No answer 3.5%
How many employees does your company have?
1-4 19.0%
5-9 20.6%
10-19 19.5%
20-49 16.8%
50-99 6.3%
100 or more 17.3%
No answer 0.5%
What is your company's annual revenue?
Under $1 million 37.8%
$1.0 million - $2.99 million 25.8%
$3 million or more 29.5%
No answer 6.8%
Education and Health Services 4.4%
Durable Goods 7.3%
Professional and Business Services 8.5%
Leisure and Hospitality 8.6%
Source: U.S. Bureau of Labor
Statistics, June 2003
Vacation 87.5%
Holidays, including floating 81.5%
Medical insurance 78.7%
Sick Leave 63.9%
Cell phone/airtime 55.9%
Flexible schedule 51.6%
Life insurance 51.6%
Personal time 51.6%
401(k) plan 50.4%
Dental insurance 48.4%
Auto allowance 44.4%
Long-term disability plan 31.8%
Short-term disability plan 27.6%
Vision insurance 25.6%
Tuition reimbursement plan 23.8%
Pension plan 20.3%
Association memberships 19.8%
Profit-sharing plan 15.3%
Stock purchase plan/stock options 10.0%
*Either fully or partially paid by
the company
Job Title Median ($) Mean ($)
Accounts Receivable Manager 35,000 36,204
Billing Clerk 25,000 24,447
Bookkeeper/Asst. Controller 30,000 35,840
Certified Rehabilitation Technology Supplier (CRTS) 53,843 56,499
Controller/VP Finance 65,000 69,119
Customer Service/Inside Sales Rep 30,000 32,846
Customer Service Manager/Supervisor 35,000 38,032
Delivery Technician 25,000 23,560
Operations/Warehouse Manager 35,000 38,592
Outside Sales/Marketing Rep 42,000 44,838
Pharmacist 75,000 72,937
President/CEO 75,000 82,416
Respiratory Therapist 40,000 41,353
Sales Manager/VP Sales 60,000 62,811
Store/Branch Manager 45,000 46,499
Job Title Mean Hourly Rate ($)
Accounts Receivable Manager 13.41
Billing Clerk 11.49
Bookkeeper/Asst. Controller 12.99
Customer Service/Inside Sales Rep 11.74
Customer Service Manager/Supervisor 14.35
Delivery Technician 11.36
Operations/Warehouse Manager 13.29
Outside Sales/Marketing Rep 15.41
Pharmacist 30.25
Respiratory Therapist 19.04
Store/Branch Manager 16.04
*The mean or “average”
figures presented refer to the statistical mean, which is defined
as “the value obtained by adding all the numeric answers
given for a particular question and then dividing by the total
number of respondents answering the question.” The median is
defined as the value that is exactly in the middle of all answers,
”or the point where half of the responses lie above and half
of the responses lie below the value.”

$50,038 is the average salary for this year's survey