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The federal government has awarded a $9 million grant to help Mississippi hospitals cope with the worker shortages and higher wages that followed Hurricane Katrina.

The grant is part of $19.1 million the U.S. Department of Health and Human Services is providing Mississippi and Louisiana to help hospitals and inpatient psychiatric facilities recover from the storm, Secretary Mike Leavitt said. Louisiana will receive roughly $10.1 million of the total.

“HHS continues to work with those in need to resolve the healthcare problems created by Hurricane Katrina,” Leavitt said. “This grant is another step we’re taking to make sure the citizens of these states have continued access to medical services.”

Katrina destroyed or damaged hundreds of thousands of homes and apartments and forced thousands of Mississippi and Louisiana residents to flee to other states. Many did not return. The workers who did come back have had to cope with limited and more expensive housing, as well as soaring insurance costs.

Mississippi hospitals suffered more than $180 million in hurricane damages and still face serious and ongoing financial pressure to compete for workers in the highly competitive post-storm labor markets.

Marcella McKay, vice president for nursing and professional affairs for the Mississippi Hospital Association, said the group does not track wage data.
However, members have told her that one of the greatest challenges coastal hospitals face is the tremendous escalation in pay for entry-level or non-professional positions.

A hospital looking to fill a nurse’s aide slot or a housekeeping job has to compete with casinos, restaurants and all sorts of other businesses, McKay said. Those companies are willing to pay higher wages than ever before and sign-on bonuses.

In addition, some employers pay retention bonuses, which were never part of the landscape before, she said.

Hospitals have battled back with their own incentive programs, offering signing bonuses and help with school loans. Some providers have stepped up recruiting of foreign nurses.

One strategy that appears promising is the use of nurse residency programs.
Using grant money from the U.S. Health Resources and Services Administration, the Office of Nursing Workforce has developed and implemented residency programs at four hospitals -- River Region Health Systems, Alcorn State University, Hinds Community College, and Mississippi Baptist Medical Center.

The Mississippi Business Journal reports the project shows hospitals were able to cut RN vacancy and turnover rates in half, saving millions of dollars by reducing or eliminating the use of travel nurses and overtime.

Despite those efforts, statistics from the Mississippi Office of Nursing Workforce show the healthcare worker shortage has worsened since the storm.

Healthcare providers surveyed by the office reported that 9.3 percent of the full-time equivalent positions for registered nurses remained vacant in 2006, compared to 7.7 percent a year earlier.

“Approximately 74 percent of the employers indicated they had difficulty recruiting one or more categories of RNs in 2006,” the report says. “Areas of need listed most frequently were medical/surgical units, critical care areas, emergency room, psychiatric and geriatric psychiatric units.”

Hospitals are also having trouble filling licensed practical nurse slots, according to the Office of Nursing Workforce. Hospitals had to leave 13.8 of their LPN positions vacant in 2006, compared to 12.1 percent in 2005.

Hospitals were also unable to fill 9.4 percent of their full-time equivalent positions for ancillary personnel positions, a slight increase from 2005, according to the Office of Nursing Workforce.

HHS officials said the latest round of grant money will help support healthcare providers operate until the Medicare prospective payment system is adjusted for changes in the local wage scales. The adjustments to the Medicare prospective payment system that will reflect post-Katrina wages are scheduled to go into effect in October 2009.

HHS said the current grant differs from previous awards because the states will decide who gets the money. It will be up to Louisiana and Mississippi to determine which hospitals and inpatient psychiatric facilities and which regions are still experiencing the greatest post-Katrina challenges. Then those regions and providers will be awarded the grant money.

The facilities must be located in parishes or regions that the Federal Emergency Management Agency has designated as eligible to receive individual and public assistance, according to HHS.

In addition, the states may also use up to 20 percent of the grant money for “immediate, unmet healthcare infrastructure needs,” HHS Deputy Administrator Herb B. Kuhn said. That spending must be approved by CMS, and the small amount of money must complete the infrastructure needs.

The latest round of grant money brings the total HHS funding to the Gulf Coast region with more than $2.5 billion in funding for social services, healthcare and efforts to rebuild the healthcare system since Hurricane Katrina.



July 2008

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