Amid reports of “The Great Resignation” and rising concern about inflation and the longer-term economic outlook, state health policymakers are consistently reporting health care workforce shortages across many health professions as one of their primary challenges and priorities to address. Simultaneously, states are receiving unprecedented short-term funding from the federal government and are considering the most strategic use of such funds. NASHP’s 2022 Annual Conference offered an opportunity for state health policymakers to take a step back and reflect on the current state of the economy and how that may impact considerations for state health policymaking related to the health care workforce.

Economy

Dan White, a senior director of economics at Moody’s Analytics, provided the following overview to NASHP Annual Conference attendees: While the U.S. lost 22 million jobs in two months at the outset of the COVID-19 pandemic, we also saw rapid recovery with 10 million of those jobs coming back within two or three months as businesses reopened. In July 2022, the U.S. regained employment equivalent to pre-pandemic levels.

The U.S. economy has seen reduced activity recently. However, it is not broad-based enough to be considered a recession just yet, White said. This is in part due to the current status of the labor market in addition to substantial amounts of money ($4.2 trillion) currently sitting in U.S. checking accounts. However, those funds are not distributed evenly across the U.S. population. Those individuals in the top 80 percent of the income distribution have 300 to 400 percent of the cash they had pre-pandemic, while those in the lower 20 percent only have about 75 percent.

Most of the funds came from the federal stimulus, contributing to faster recovery as well as significant inflation, which was an expected outcome of stimulus funding. Current inflation is three to four times higher than what would be considered healthy. However, the U.S. is not seeing stagflation, which would require high levels of inflation with broad-based economic contraction, including large declines in the labor market.

Moody’s Analytics baseline forecast is that there will not be a recession. However, White indicated that the odds are higher now than they have been and that the forecast could easily change depending on the actions of the Federal Reserve and ongoing supply constraints. The initial weekly jobless claims from the Department of Labor can be used as indicator of possible forthcoming recession. They would indicate a potential recession if the weekly jobless claims are at or above 250,000 for five to six weeks or the monthly jobs number is below 250,000 for a couple months in a row.

As of September 2022, there were 10.7 million active job openings in the U.S., twice as many as individuals actively looking for a job, creating an extraordinarily tight labor market. About 2 million of those jobs are in the health care and social services sector. In addition, there is a lot of turnover and the rates of workers quitting their jobs has increased, a sign that workers feel confident they can find new employment. There is significant wage growth happening in select sectors of health care, such as nursing – which is seeing a more than 10 percent increase. Large increases in wage growth signify shortages and other challenges with that part of the health care workforce, which the market needs to address.

Health Workforce

States are seeking to better understand the extent, location, and cause of health care workforce shortages and strategies that address immediate concerns in addition to longer-term solutions to recruit and retain a workforce that can meet the diverse and evolving needs of the U.S.

State health policymakers are consistently reporting health care workforce shortages across primary care, hospitals, behavioral health, and long-term care. In addition, states received unprecedented short-term funding from the federal government, but they have struggled with the parameters of those funds and the best ways to use them strategically given their short-term status.

As states consider these challenges and how to identify statewide strategies to address them, Joanne Spetz, director of the Phillip R. Lee Institute for Health Policy Studies at the University of California, San Francisco; Ena Backus, director of health care reform at the Vermont Agency of Human Services; and Daniel Rusyniak, secretary of the Indiana Family and Social Services Administration, shared their perspectives with the NASHP 2022 Annual Conference audience.

When states identify a health care workforce shortage, Spetz explained, it launched an exploration into the specifics and possible causes of the shortage to identify relevant policy solutions. Important information to inform policy includes what workforce is affected, whether the shortage is localized or across the whole state, and if there is a specific skill set or skill level that is affected, such as experienced versus entry-level workers.

To complete this analysis, states benefit from access to quality health workforce data, including specialty, practice address, populations served, and where providers completed their education. This information can be collected upon licensure and through the renewal process. In addition, this information can be supplemented by school surveys that include the number of applicants, number of qualified applicants who are not accepted, barriers to expanding programs, faculty shortages, and clinical placement shortages. State understanding can also be informed by employer surveys that track current vacancy rates over time and perceptions of the labor market by health care profession and experience level.

Indiana

Indiana’s workforce strategies are based on data and informed by the data collected in partnership with the Bowen Center for Health Workforce Research and Policy at Indiana University. Indiana collects information on licensed health care professionals during licensure and at the time of license renewal on specialty, location of current practice, setting type, average hours worked, services provided, education background and training, and whether they offer telehealth services (for prescribers). This information informs state policymakers’ understandings of the shortages and how to address them. For example, Indiana identified that nurses who began their career as a certified nursing assistant (CNA) were more representative of the demographics of the communities they serve. The state had a goal of increasing the number of providers who were representative of the communities they serve. So, using this information, Indiana developed collaborations with community colleges to encourage CNAs to continue their education and become nurses.

Indiana is continuing to consider how to build on its existing data collection and policy strategies to invest in the areas the state wants to improve most. Home and community-based services is a current priority, particularly collecting data on direct service workers, who are unlicensed and therefore not captured in the current workforce data collection approach. Moving forward, Indiana has created an advisory committee made up of direct service workers to inform data collection approaches, recruitment and retention strategies, creating credentials and a career ladder, and understanding payment and benefits.

Vermont

Vermont’s legislature directed the director of health care reform in the Agency of Human Services, Ena Backus, to chair an advisory group that would help to inform a workforce development strategic plan. Backus and the advisory group submitted the Health Care Workforce Development Strategic Plan to the legislature in October 2021, informed by the pre-pandemic workforce challenges and the experiences of the first nine months of COVID-19. The plan provides recommendations to the legislature for strategic investments and development of the health care workforce, many of which the legislature funded in 2022. Specific recommendations included the development of a health workforce data center, approaches to address recruitment and retention, financial incentives for health care workers, scope of practice changes, and education and training.

Next Steps

States are continuing to be challenged by health care workforce shortages across sectors and states. State health care policymakers want to coordinate across sectors, their states, within regions, and across the country to strategically support the workforce rather than compete with one another.

Next steps for states include looking at the full picture of recruiting and retaining the health care workforce, whether licensed or unlicensed, including identifying needed supports such as child care, transportation, tuition support and/ or loan repayment, peer groups, pay, and more.

In addition, states are continuing to spend one-time federal funding. Indiana took the approach of building bridges, not cliffs, investing in projects that will have a long-term impact such as upkeep and maintenance of data centers and long-term services and supports (LTSS) reform.

Vermont is seeing this moment as an opportunity to invest in subsectors that have a critical need such as behavioral health, home health and LTSS, and hospital nurses. In the short term, they are investing funds to prevent losing additional workers, and in the long term, they are considering employer-based apprenticeship programs.

California is using this opportunity to shore up data for providers the state previously didn’t have information about, such as the long-term care workforce.

Additional Resources on Health Care Workforce

• States Address Provider Shortages to Meet the Health Care Demands of the Pandemic (April 2020)
• Behavioral Health
  • How Alaska Supports Rural and Frontier Behavioral Health Services (October 2022)
  • States Enhance Children’s Mental Health Services Through Workforce Supports (September 2022)
  • States’ Use of Peers in the Mental Health Crisis Continuum (August 2022)
  • State Strategies to Increase Diversity in the Behavioral Health Workforce (December 2021)
  • Strengthening Workforce Capacity: State Actions to Address Opioid Use Disorder during COVID-19 (May 2020)
  • 50-State Scan: How Medicaid Agencies Leverage their Non-Licensed Substance Use Disorder Workforce (November 2019)
  • Behavioral Health Workforce Innovations: How Massachusetts and New York Engage Community Health Workers and Peers to Address Racial and Ethnic Disparities (November 2019)
• Community Health Workers
  • Developing Meaningful and Effective Partnerships between State Leaders and Community Health Worker Associations (September 2022)
  • Lessons for Advancing and Sustaining State Community Health Worker Partnerships (December 2021)
  • State Community Health Worker Models (Updated December 2021)
  • States Engage Community Health Workers to Combat COVID-19 and Health Inequities (June 2020)
• Home and Community-Based Services
  • States Use American Rescue Plan Act Funds to Strengthen Home and Community-Based Service Workforce (Updated April 2022)
  • RAISE Act State Policy Roadmap for Family Caregivers: The Direct Care Workforce (March 2022)
  • State Policies to Strengthen the Direct Care Workforce (February 2022 webinar)
• Maternal and Child Health
  • States Advancing Equitable Maternal Health Policy Highlighted at #NASHPCONF22 (October 2022)
  • State Medicaid Approaches to Doula Service Benefits  (October 2022)
  • Improving Birthing Outcomes through Midwifery Care: New Mexico (April 2022)
  • Midwife Medicaid Reimbursement Policies by State (April 2022)
  • Virginia Invests in Doulas to Improve Maternal Health Outcomes (February 2022)
  • Four State Strategies to Employ Doulas to Improve Maternal Health and Birth Outcomes in Medicaid (July 2020)
  • New Jersey’s Project ECHO Builds Provider Capacity to Support Maternal and Child Health during COVID-19 (June 2020)
  • Infographic: State Team-Based Care Strategies for Medicaid-Eligible Women (December 2019)
• Oral Health
  • Strengthening Oral Health in the U.S. through Integration and Workforce Development: Lessons from State and Federal Health Officials (September 2022)
  • Community Health Workers and Oral Health: Creating an Integrated Curriculum in Kansas (June 2022)
  • Community Health Workers and Oral Health: Improving Access to Care Across the Lifespan in Minnesota (June 2022)
  • Expanding the Oral Health Workforce to Promote Overall Health: Minnesota Deploys Community Health Workers and Dental Therapists to Advance Equity (November 2019)
  • Expanding the Oral Health Workforce to Promote Overall Health: Arizona Uses Dental Hygienists to Improve Hospital Patient Safety (November 2019)
  • Medicaid Incentives, Performance Measures, and Workforce Innovations Foster Access to Pediatric Oral Health Care (November 2019)