The $300 million that state lawmakers recently appropriated to help health care providers attract and retain workers amid an acute staffing shortage could begin flowing by early spring.
The Michigan Health & Hospital Association (MHA) is working with the state Department of Health and Human Services to formulate a process to administer $225 million of the funding for 131 acute care and eight behavioral health hospitals.
The Department of Health and Human Services will administer the remaining $75 million for post-acute care providers and federally qualified health centers. A department spokesperson said payments will be “made soon.”
Adam Carlson, senior vice president of advocacy at the MHA, hopes the funding by April can begin reaching acute care and behavioral health hospitals that have been coping with acute staffing shortages.
“We’ll obviously do everything we can to make sure it happens as fast as possible,” Carlson said. “We think this funding is going to be tremendously beneficial.”
The $300 million was part of a broader $1.2 billion supplemental spending bill the state Legislature approved and Gov. Gretchen Whitmer signed this month to support in-classroom instruction at schools as well as the recruitment and retention of heath care workers.
Care providers can use the money for training, to pay retention and attraction bonuses, and help with employees’ college loan payments and tuition assistance.
Many hospitals report acute staffing shortages as doctors, nurses and other health care professionals are burned out from heavy patient caseloads and have opted to retire, change jobs, or move to other care settings. The shortage also cuts into non-clinical staff such as housekeeping and food service workers, Carlson said.
“COVID has taken a really serious toll on the mental, physical and emotional wellbeing of our health care employees in the state,” he said. “(The funding) will allow us to start the healing process, provide additional recognition to workers for what they’ve done throughout the pandemic, and really recruit and retain excellent employees so our hospitals can provide safe, high quality care.”
Staffing problem worsens
The MHA estimates that 1,000 fewer beds across the state were unstaffed in January compared to a year earlier. Michigan has 23,000 licensed hospital beds.
Statewide, hospitals in November 2021 had 20,692 open positions for a vacancy rate of 14.3 percent, according to the MHA’s most recent member survey. That compares to a typical pre-pandemic vacancy rate of about 5 percent.
“The problem was growing at that time and we think it still is,” Carlson said. “More individuals were leaving the health care workforce each month than hospitals were able to replace.”
Nationally, a January 2022 workforce briefing by the American Hospital Association cited federal data showing hospitals with 95,600 fewer workers compared to February 2020.
Nearly 1,400 hospitals across the U.S that reported data on staffing to the federal government, or 31 percent, expected a critical staffing shortage in January, and a dozen states had at least 40 percent of their hospitals reporting a critical staffing shortage.
The AHA briefing also highlighted a study by Pennsylvania-based recruiting firm Nursing Solutions Inc. that found an 18.7-percent turnover rate among nurses. Nearly 36 percent of hospitals reported that more than one in 10 nursing positions were vacant, which compares to 23.7 percent prior to the pandemic.
Addressing the problem
Meanwhile, many health systems have spent heavily in recent months on staff attraction and retention bonuses while also increasing pay. That includes University of Michigan Health-West, formerly Metro Health, which has spent more than $14 million since last fall on attraction and retention bonuses, higher wages, and contracting with travel nursing agencies, said Rakesh Pai, the chief population officer and president of the system’s medical group. University of Michigan Health-West welcomes the funding, which comes from federal COVID relief funds.
“We would love to find more nurses and medical assistants and patient care technicians, but they are hard to come by right now, and some of them want to sit it out for a quarter or two and see what happens with COVID, or may switch industries,” Pai said.
Spectrum Health, now known as BHSH System following the Feb. 1 merger with Beaumont Health, last fall allocated $117 million for higher pay and bonuses to help retain and attract workers.
The two years since the pandemic began “have placed incredible burdens and demands on our team members,” Tina Freese Decker, the president and CEO at BHSH System who chairs Michigan Health & Hospital Association board, said in a statement issued by the governor’s office.
“The funding included in this supplemental budget bill will help Michigan hospitals and health systems in rebuilding and retaining exceptional health care workers so we can continue to provide safe, high-quality care to all, including supporting innovative educational and training programs,” Freese Decker said.
The new law does include restrictions on how much of the money hospitals can pay toward cash bonuses and retention payments. Cash recruitment bonuses are limited to 25 percent of what a hospital designated as noncritical, and small or rural health care employers, can receive in total payment. Retention bonuses are limited to 20 percent of what’s received.
“This cannot all go to all straight bonus pay, but we think our members can be really creative in how they utilize this to help ensure we’re maintaining a high number of staffed hospital beds in the state to what we need to be able to provide that care,” Carlson said.
To receive funds, care providers must agree to not use an employee’s vaccine status as a factor in providing bonuses or other assistance.
The Legislature also allocated $367.3 million in federal relief funds for epidemiology and laboratory capacity, $150.7 million for schools to buy COVID testing kits, $75 million for early treatment and testing sites, $70 million for adult foster care homes and homes for the aged, $54.1 million for vaccine support, and $29.7 million for COVID-19 mitigation efforts.