Healing Pandemic Health Woes

5/11/2022

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By Kelly Hughes, Emily Maher and Leo Garcia | May 11, 2022| NCSL Fiscal Road to Recovery Brief Series

About the Fiscal Road to Recovery Brief Series

This six-part brief series examines state CSFRF spending priorities a year after the program launched and showcases examples to help inform policymakers as they combat the ongoing impacts of the COVID-19 pandemic.

The COVID-19 pandemic significantly disrupted longstanding trends in health outcomes, access to care and the healthcare workforce. The number of COVID-related deaths brought U.S. life expectancy down by 1.8 years compared to pre-pandemic levels. Health services utilization dropped in 2020 due to delayed and forgone care and has yet to fully rebound. Health care workers bore the brunt of the pandemic, which is reflected in waning job satisfaction. According to a 2021 Kaiser Family Foundation survey nearly 30% of health care workers considered leaving their profession altogether, and nearly 60% reported negative mental health impacts from their work during the COVID-19 pandemic.

To address these issues, at least 40 states and territories have invested nearly $12.4 billion of state fiscal recovery funds towards health-related priorities, representing 9.4% of all allocated Coronavirus State Fiscal Recovery Funds (CSFRF). This brief outlines the most common uses of fiscal recovery funds for health-related priorities. 

Broad Latitude in the Use of Recovery Funds Towards Health

The COVID-19 pandemic affected nearly every aspect of society, causing crises in both the public health system and the United States economy. The health care sector was hit harder than most and the impact on health care stakeholders—facilities, workforce, patients—has been felt differently across the country. Therefore, the fiscal recovery fund guidelines offer recipients broad latitude in how they allocate  funds to best meet specific needs of states and stakeholders, including consumers.

40 States and Territories Prioritizing Public Health

Priorities in Health

Responding to the COVID-19 Pandemic

Since the first case of COVID-19 was discovered in the U.S. in January 2020, the disease has infected over 81 million and killed over 990,000 Americans. And it’s not over yet. States must remain vigilant and prepared for another large-scale public health emergency and for new emerging public health threats. This includes continued efforts to slow the spread of the disease, increase vaccination rates, protect vulnerable populations and address the broader impacts of the pandemic on public health. State uses of fiscal recovery funds for these purposes include:

  • North Carolina: $36 million for local health departments to expand communicable disease surveillance, detection, control and prevention activities.
  • Washington: Over $170 million for COVID-19 response efforts including diagnostic testing, case investigation, outbreak response, care coordination, community outreach, operational and technical support, vaccine administration efforts, disease surveillance, client services and support for local health jurisdictions and tribes.
  • Nevada: $20.9 million for public health emergency needs, including mental health treatment, substance use disorder treatment and other behavioral health services, construction costs and other capital improvements in public facilities to meet COVID-19-related operational needs and expenses relating to establishing and enhancing public health data systems.
  • Kentucky: $69.3 million in fiscal year 2022 for COVID-19 testing, assisting providers of treatment centers, and "Test and Stay" COVID-19 testing at schools.

Increasing Access to Health Services

Pandemic response and mitigation efforts  altered the delivery of and access to health care services. The rapid rise of telemedicine increased access to care during the pandemic, but still, one in four adults reported delaying or forgoing care due to the pandemic. Numerous states allocated CSFRF to restore and expand access to health services. Policymakers created new programs, supported existing programs, and replaced lost revenue for services delivered, among other things. Projects that increase access to health services include:

  • Colorado: At least $85 million for programs aimed at preventing and treating addiction and mental illness through the Behavioral Health Recovery Act of 2021.
  • Alabama: $80 million to the Alabama Hospital Association and the Alabama Nursing Home Association to support the delivery of health care services related to the pandemic by and through reimbursement of eligible expenses. It also includes over $36 million to various state entities of competent jurisdiction for health care services related to the pandemic, including through assisted living facilities.
  • Hawaii: $131.2 million for FY 2022 and FY 2023 for the operation of the statewide emergency medical services and injury prevention system, plus $2.4 million in FY 2022 for Family Health Services and perinatal support services.
  • North Dakota: $29 million to the Department of Human Services for the purpose of projects, financial assistance, grants, and services.

Safeguarding Health Facilities

Health care facilities—from hospitals to assisted living facilities—were among the hardest hit throughout the pandemic. Many U.S. hospitals maintained negative operating margins throughout 2021 due to sicker patients, higher expenses, and fewer outpatient visits—and these losses had significant consequences, especially in rural areas. Since the start of the pandemic, 21 rural hospitals in the U.S. have closed with more than 450 at risk of closure. Skilled nursing facilities are also struggling with low revenue due to staffing shortages and low occupancy rates. To support health care facilities of all kinds, states are leveraging CSFRF to replace lost revenue, provide rate increases to certain facilities, and expand capacity, such as:

  • Arkansas: Over $100 million to the department of health for alternative care facilities and increasing hospital bed capacity. Also, $116 million to the department of human services for unreimbursed costs to skilled nursing facilities.
  • New Jersey: $450 million for Level 1 Trauma Centers to strengthen emergency preparedness infrastructure.
  • New Hampshire: $13 million to fund improvements in the state’s mental health system, including emergency psychiatric care facilities for both adults and youth, and $8 million for facility improvements like seclusion room safety upgrades and hospital renovations.
  • Michigan: $37.5 million in FY 2022 for a supplemental payment to nursing facilities to address the economic impact of COVID-19 on nursing home providers. The legislation also allocated $160 million for hospital COVID-19 grants in FY 2021 and $100 million for long-term care facility supports in FY 2021.

Supporting Health Workforce

The COVID-19 pandemic has taken a heavy toll on front line health care teams with many suffering from stress, trauma, burnout and increased mental health challenges. However, the difficulty of sustaining the health care workforce predates the COVID-19 pandemic, with reported shortages for physicians, nurses, allied health and behavioral health professionals and direct care workers, especially in rural and underserved communities. States are leveraging CSFRF to address the needs of health-care workers by hiring new staff, providing one-time bonuses or rate increases, providing loan repayment and creating career pathways. Some examples of health workforce support include:

  • California: $500 million to the office of statewide health planning and development for the health care workforce, including local assistance.  
  • Maine: $2.5 million to address nursing home, federally qualified health centers and hospital health care workforce shortages; $2 million to loan repayment programs for health care providers and nurses; and $1.9 million to develop and refine health care career pathways and implement health care apprenticeships.
  • Texas: $2 billion to the department of state health services to provide funding for surge staffing at state and local hospitals, long-term care facilities, psychiatric hospitals, and nursing facilities and to provide funding for emergency medical response service staffing.

This brief lists only some of the ways recipients have used the CSFRF program to support the public health response to COVID-19. Additional examples and program details can be found in NCSL’s allocation database.

States, territories and the District of Columbia must obligate their federal recovery funds by December 2024 and spend them by December 2026. Until then, NCSL will continue tracking how these funds are prioritized and allocated.

Kelly Hughes is an associate director with NCSL’s Health program. She covers health access, costs and coverage policy issues for NCSL.
 
Emily Maher is a senior policy specialist with NCSL’s Fiscal Affairs Program. She covers budget, tax, state-local, and economic development issues for NCSL. 
 
Leo Garcia is a policy analyst with NCSL's Fiscal Affairs Program. He covers economic development, budget, and tax issues for NCSL.
 

Additional Resources 

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