BLOG POST
Concerned About the California Healthcare Employee Wage Increase? Here’s How to Cut Those Costs by Up to 55%
California’s healthcare industry is bracing for significant changes as the state increases the minimum wage for healthcare workers. Starting June 1, 2024, California healthcare employees saw their wages rise to $21 an hour, with the minimum wage gradually increasing to $25 per hour by June 2027. These hikes present a financial challenge for healthcare providers, especially those operating call centers. As staffing costs rise, healthcare providers will need to find innovative ways to maintain quality patient care while managing expenses.
American Health Connection (AHC) offers a solution to this challenge, enabling healthcare providers to save up to 30% on call center staffing costs immediately, with the potential for savings of up to 55% over time. Here’s how partnering with AHC can help your organization navigate these wage increases while maintaining the efficiency and effectiveness of your call center operations.
Understanding the Wage Hikes and Their Impact
The gradual rise in California’s minimum wage for healthcare workers is significant:
June 1, 2024: Minimum wage increases to $21 per hour.
June 1, 2026: Minimum wage increases to $22 per hour.
June 1, 2027: Minimum wage reaches $25 per hour.
January 1, 2029: Annual adjustments based on inflation or a cap of 3.5%, whichever is lower.
For many healthcare providers, the largest portion of their call center costs comes from labor. With wages set to increase by over 19% in just three years, the cost burden will escalate rapidly. This makes it essential for providers to seek cost-saving alternatives without sacrificing the quality of patient care.
How American Health Connection Reduces Staffing Costs
American Health Connection is a full-service, virtual healthcare call center that specializes in handling patient access needs, such as appointment scheduling, pre-registration, and patient communications. By outsourcing these functions, healthcare providers can leverage several advantages listed below. For more details, click here.
- Reduced Labor Costs
The most direct way American Health Connection helps providers save is through labor cost reductions. Since AHC operates as a remote, U.S.-based call center, healthcare providers can bypass the direct costs associated with hiring, training, and managing in-house call center staff.
With AHC’s scalable model, healthcare providers don’t have to deal with the complications of wage hikes or additional benefits costs for call center employees. As California wages increase to $25 per hour by 2027, the financial pressure on in-house call centers will become more intense. Outsourcing with AHC can provide a buffer, offering immediate savings of up to 30% by eliminating the need for costly in-house staff. Over time, as wage hikes continue, this figure could rise to 55%.
- No Administrative Overhead
In addition to the rising wages, healthcare providers face administrative overhead associated with in-house call centers. These include the costs of recruiting, training, managing employee turnover, and overseeing daily operations. With American Health Connection, healthcare providers can offload this administrative burden, allowing their focus to remain on core medical services rather than the complexities of call center management.
This is particularly important as wage increases come with other rising costs, such as payroll taxes and healthcare benefits. Outsourcing through AHC allows healthcare providers to avoid these escalating costs, contributing to significant overall savings.
- Flexible, Scalable Staffing
Healthcare providers often experience fluctuating call volumes, with patient demand varying by season, time of day, or even specific events like flu outbreaks. Managing a large enough in-house team to cover peak periods can be expensive, especially with the upcoming wage hikes. However, American Health Connection offers flexible, scalable staffing solutions that allow providers to adjust call center capacity as needed.
By scaling up during busy times and scaling down when demand slows, AHC helps providers avoid paying for excess staff during low-volume periods, leading to further cost savings.
- Access to Expertise Without Additional Training Costs
In-house call centers require continuous training to ensure staff are up-to-date on the latest healthcare protocols, technology, and best practices. American Health Connection, as a specialized patient access center, already has a team of trained experts who understand the healthcare landscape and provide services that meet or exceed industry standards.
By partnering with AHC, healthcare providers gain access to this pool of knowledgeable staff without the need to invest in ongoing training programs. This helps reduce training and development costs while ensuring high-quality patient care. Click here for more details on the benefits of partnering with AHC
- Eliminate turnover rate challenges
Call centers have one of the highest employee turnover rates in the nation – 18-42%, according to studies by Avoxi. This presents unique challenges when it comes to employee retention and turnover. You can learn more about this applies specifiically to California employers here.
By partnering with AHC, you eliminate turnover rates and benefit from a turnover rate of just 3%
- The True Cost is More Than Double the Projection, But You Can Avoid It
In California, the true cost of a healthcare call center employee is significantly higher than just their hourly wage due to overhead expenses. For every $21 per hour an employee earns, the actual cost to the employer ranges from $42 to $48 per hour. This is 2-2.3 times the hourly cost and accounts for benefits, payroll taxes, insurance, training, and administrative expenses. As minimum wages for healthcare workers rise, the overall cost of staffing also escalates, putting additional financial strain on healthcare providers trying to manage their operational budgets efficiently. AHC eliminates 100% of those overhead costs!
Long-Term Cost Efficiency with AHC
Over time, the savings associated with outsourcing call center services to American Health Connection will become even more pronounced. The upcoming wage hikes in California will raise the minimum wage by 19% between 2024 and 2027, but that’s just the beginning. Starting in 2029, wages will continue to rise annually in line with inflation or at a cap of 3.5%, whichever is lower.
By locking in outsourcing agreements with AHC now, healthcare providers can mitigate the impact of these future increases, saving up to 55% in staffing costs by avoiding the need to hire and manage in-house teams subject to California’s wage laws.
Enhancing Patient Experience While Reducing Costs
Cost savings are critical, but not at the expense of patient care. American Health Connection prides itself on offering a seamless patient experience. The company’s team of experts ensures that patients receive the highest level of service, with efficient appointment scheduling, accurate pre-registration, and timely communications. This results in higher patient satisfaction and fewer missed appointments, benefiting both the healthcare provider and the patients they serve.
By outsourcing call center operations to AHC, healthcare providers can focus on delivering exceptional clinical care while leaving the complexities of patient communications and administrative tasks to a trusted partner.
Conclusion
As California’s minimum wage increases for healthcare workers, providers will face rising staffing costs, particularly for call centers. American Health Connection offers a smart, cost-effective alternative that allows healthcare organizations to reduce expenses by up to 30% immediately, with the potential for savings of up to 55% over time.
Outsourcing call center services not only helps mitigate the impact of wage hikes but also improves efficiency, scalability, and patient satisfaction. As wage pressures continue to mount, now is the time for healthcare providers to consider partnering with American Health Connection to maintain a high standard of care while keeping operational costs under control.
If you’d like to learn more about how we can help you reduce staffing costs, improve efficiency, and enhance the patient experience, visit American Health Connection or get in touch to set up a quick meeting with us.