How Hochul’s $10 billion health care workforce plan could impact understaffed nursing homes
Ellicott Center for Rehabilitation and Nursing is a 160-bed nursing home located just off Niagara Street in downtown Buffalo.
Less than a half a mile away is a McDonalds, with a Tim Hortons under construction next door.
“I don’t see people staying,” said Ishma Marshall, an Ellicott Center certified nursing assistant. “They be like, ‘Why am I going to work here, when I can go down the block somewhere and make more?’”
Marshall said he’s seen plenty of coworkers leave due to the low wages. Others don’t even bother to show up after getting hired and going through orientation.
Marshall, despite working at Ellicott Center for 12 years, makes just $14 an hour.
“Not to knock nobody's job or nothing like that, but somebody can make coffee and make more than me taking care of a human being,” Marshall said. “That's crazy.”
New York now plans to increase the wages of health care workers like Marshall, in hopes of both retaining them and attracting more to join the field.
Gov. Kathy Hochul is proposing to spend $10 billion to increase the state’s health care workforce by 20% over the next five years. Her plan includes $2 billion to increase wages and another $2 billion to pay up to $3,000 bonuses for workers who remain in their positions for one year.
“We must stop the current hemorrhaging of health care workers,” Hochul said while announcing the plan during her State of the State Address last week. “And we're going to do it not just by saying we owe them a debt of gratitude, but actually paying them the debt we owe.”
It’s not yet clear how much of that money would be earmarked for health care workers in nursing homes, but any funding to attract workers there could be crucial, considering New York nursing homes have lost 13% of their workforce since the onset of the COVID-19 pandemic in February 2020, according to U.S. Bureau of Labor Statistics data.
And nursing homes do indeed need state funding to pay their workers more, said Michael Balboni, executive director of the Greater New York Health Care Facilities Association, a nursing home lobbying group.
About 80% of nursing home revenue already comes from the taxpayer-funded Medicaid system. New York nursing homes say it costs them on average $265 a day to take care of a Medicaid resident, but that the state only reimburses them on average $210 a day.
The lack of sufficient Medicaid reimbursement, according to Balboni, has caused nursing home wages to fall behind that of retailers.
“The competition is not other nursing homes or even hospitals, as much as it is Target, Amazon, Walmart,” Balboni said. “Particularly Amazon is paying a much higher starting wage than what a certified nursing assistant gets. And so the state Medicaid rate needs to take that into account.”
The union for nursing home workers, 1199 SEIU, also supports Hochul’s plan. Grace Bogdanove, Western New York vice president for nursing homes, said the plan will address not only low wages, but also the other biggest reason their union members leave the nursing home industry: burnout from short staffing.
“You're seeing senior employees leave the industry because they simply can't handle the burden of short staffing on a daily basis anymore,” Bogdanove said. “So higher wages will hopefully attract new staff to come to work at these facilities, and with that, you'll see less short staffing. Folks will be able to spend more time with their residents and provide the quality care that they want to be able to provide.”
But some have trepidation about Hochul’s plan.
Richard Mollot, executive director of the Long Term Care Community Coalition, a New York City-based advocacy group for nursing home residents, said plans like Hochul’s, sometimes called a wage pass-through, have produced mixed results.
A 2010 Brown University study found states that introduced a nursing home wage pass-through saw just a 3 to 4% increase in CNAs, and no discernible increase in either registered nurses or licensed practical nurses.
“Those wage pass-throughs quite often don't make a substantive difference in the lives of staff, and, therefore, in the lives of residents and consumers,” Mollot said.
And Mollot is wary of handing over more money to nursing homes without safeguards, such as New York’s safe staffing law and profit cap mandate. The safe staffing law would mandate nursing homes provide residents with an average of 3.5 hours of care each day, while the profit cap would mandate nursing homes spend at least 70% of revenue on care.
Those laws were supposed to go into effect Jan. 1, but Hochul delayed them for at least 30 days, saying some nursing homes can’t comply due to the workforce shortage.
“I think that without those safeguards, there's too much wiggle room for nursing homes to continue to game the system,” Mollot said. “And if you don't have that, then essentially you run the risk of just throwing money at the problem. And that never makes the problem go away.”
There’s also questions about whether $10 billion is actually that large of an investment, especially if it ends up flowing through the Medicaid system. A report published Friday by The Empire Center, a fiscally-conservative think tank, notes New York’s Medicaid budget has already increased $20 billion in the last five years alone, so a $10 billion investment over several years may be “routine.”
But Hochul’s plan does have the support of lawmakers. Assemblymember Monica Wallace, a Cheektowaga Democrat, said increasing health care wages, especially in nursing homes, will be a top priority when passing the 2022 state budget.
Last month, Wallace proposed a $259 million “emergency” investment for nursing homes that would come from this current year’s state budget.
“This money is needed immediately. Nursing homes are really struggling to make ends meet,” Wallace said. “And many of the individuals who work in this industry are themselves on public assistance, because the wages are just not sufficient to do the very difficult work that they do. They're caring for some of our most vulnerable individuals in our community, and they're doing some of the most difficult work. We really need to pay them a fair wage to reflect the very difficult work they do, and to attract people to stay.”
Hochul’s plan will likely be more detailed in her official executive budget proposal, which must be released by Tuesday. The state budget deadline is April 1.
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