Gotham Gazette

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As Psychiatric Beds are Brought Back into Service Slowly, Officials Point to Workforce Shortage

Gov. Hochul visits a hospital (photo: Kevin P. Coughlin/Governor's Office)

Hospital administrators and state regulators say a severe workforce shortage has stymied efforts to restore a majority of the 1,050 inpatient psychiatric beds removed across the state during the height of the pandemic in 2020.

Three years later, over 600 beds remain offline, according to the New York State Office of Mental Health (OMH), despite a $55 million infusion in last year's state budget and another $9 million to support the staffing pipeline.

The beds have become a focal point for Governor Kathy Hochul and Mayor Eric Adams, Democrats who have centered a continuum of mental health care and public safety services in their first-term agendas. The two have called for hospitals to increase their capacity to commit patients with serious mental illnesses on short- and medium-term stays, a complement to the 3,300 beds in state-operated psychiatric institutions.

The $55 million allocation, a combination of state and federal funds, supported higher Medicaid rates for inpatient psychiatric beds, bringing them closer to medical and surgical bed rates. That money has already been spent while the state awaits retroactive approval from the federal government, according to James Plastiras, an OMH spokesperson.

Even with the higher reimbursement rates, hospitals continue to struggle with adequate staffing, making it impossible to predict when the remaining 636 beds will come back into service. There are 5,780 inpatient psychiatric beds in health care facilities statewide; in total, the remaining beds would increase New York's capacity 11%.

"That money was intended to get psychiatric rates closer to paying for the cost of care, but the cost of care has become more expensive because of the workforce shortages," said Alison Burke, the Vice President of Regulatory and Professional Affairs at Greater New York Hospital Association, which represents roughly 280 hospitals and healthcare facilities in the region (including New York, New Jersey, Connecticut, and Rhode Island). "Getting staff costs more money now," she said.

Part of that cost spike is the result of recent contract negotiations with the New York State Nurses Association, Burke told Gotham Gazette, and ongoing negotiations with 1199SEIU, the state's largest healthcare workers union. But the biggest underlying problem is a labor shortage that was years in the making and compounded by the intensity and exhaustion of work on the frontlines of a pandemic.

"The workforce challenge is, I would say, the biggest obstacle to getting all of the beds and all of the necessary services back up and running right now," Burke said. "We could have a million beds back online, sheets ready, but we don't have the staff."

The bottleneck could pose an obstacle to Hochul and Adams as they attempt to deliver on key planks of their agenda. In October, the mayor, governor, and top city and state brass gathered at Grand Central Terminal to announce "Cops, Cameras, and Care," a campaign to make subways safer by pouring police, surveillance cameras, and mental health clinicians into the system. A month later, Adams announced a plan to step up the removal of people with severe mental illness from the subway, and expressed a desire for hospitals to increase the number of involuntary psychiatric commitments.

"You can remove people, but you also have to make sure that they get the treatment they need so they don't come back," Hochul said at the October 22 press conference, referring to inpatient beds.

"We need beds. There's no getting around that. We need beds," Adams told reporters in November. The extent of that need is still unclear: in 2022, police involuntarily removed at least 1,300 individuals from the subway, but officials have not said how many were ultimately admitted to a hospital or even met the clinical criteria for admission.

Current Plans
Hospitals have been on something of a spree in recent months, reinstating 214 beds since last fall, when Gotham Gazette reported 850 of the 1,050 beds remained offline after months of no progress. Of those newly restored beds, 70 were in New York City, including 33 at NYC Health + Hospitals (H+H), the city's public hospital network, according to OMH.

OMH would not give an estimate of when the full tally of offline beds would be restored. According to Plastiras, 80-90 more beds are expected online by April. Officials with H+H said the system intends to add 200 more inpatient psychiatric beds across the five boroughs by December.

H+H accounted for roughly a quarter of the shuttered beds statewide, Gotham Gazette has learned. At one point in 2020, the hospital system was among the most strained in the world due to COVID-19, converting any available space to intensive and emergency care. At the height of the pandemic, H+H facilities had between 250 and 260 psychiatric beds offline, according to OMH. H+H has never provided information on the number of psychiatric beds taken offline at the height of the pandemic, despite dozens of inquiries over several months.

"We are making large investments and working tirelessly on bringing these behavioral health beds online as fast as staffing and space configurations allow," wrote H+H spokesperson Stephanie Buhle in an email to Gotham Gazette. H+H has just over 1,000 beds online currently, she wrote, along with a range of outpatient and telehealth programs.

The Adams administration would not comment on the capital or operational needs involved in restoring beds, including how many staff H+H needs to hire. But at a City Council budget hearing on Tuesday, March 21, H+H CFO John Ulberg testified that the beds would cost between $650 and 700 million, and President and CEO Dr. Mitchell Katz said it would require a staffing ratio of seven nurses and 15 ancillary staff per bed.

Seventy-nine percent of H+H existing beds are occupied, Katz said.

Last year, Hochul included $9 million in the state budget for tuition assistance for psychiatrists and psychiatric nurse practitioners. That money is being spent on a rolling basis, and hospital administrators are seeking additional funds in this year's state budget, including funding for recruitment and retention efforts for social workers and other licensed mental health providers.

Outside of traditional hospitals, known as Article 28 facilities, Hochul's executive budget proposal for next state fiscal year, which begins April 1, includes $48 million for 150 new adult beds in state-operated psychiatric facilities, including 100 in New York City. These are in addition to 50 state-operated beds opened last fall in downstate psychiatric hospitals and separate from the effort to restore Article 28 beds.

Penalties for Hospitals
This year, Hochul is seeking legislation that would allow the state to fine hospitals $2,000 a day for failing to comply with the number of psychiatric beds outlined in their operating certificates.

"This legislation is necessary to implement the FY 2024 Executive Budget because it would support the re-opening of Article 28 inpatient psychiatric beds and provide $500,000 in revenue in FY 2024," reads a state memorandum of support provided by OMH.

Plastiras, the OMH spokesperson, would not say how many hospitals are operating below their mandated capacity but told Gotham Gazette the state was in touch with delinquent facilities about getting beds back online. Hochul’s executive budget is now the subject of negotiations with the two houses of the State Legislature, with a new state budget due by April 1.

"Bed counts are very fluid, and inpatient psychiatric and medical beds in hospitals may go offline for short periods of time for a variety of reasons, including construction, staffing shortages, etc.," Plastiras wrote by email. "The Article 28 facilities we contacted regarding offline beds have all submitted plans to return those beds to psychiatric use."

On January 10, the same day Hochul announced the proposed sanctions in her State of the State agenda, OMH and the state Department of Health issued a letter to hospital administrators with an ultimatum: they had until February 10 to restore all non-operational psychiatric beds or submit a plan to do so by April 1.

Hospitals appear poised to miss that mark. Plans submitted by providers indicate only 80-90 beds will come online statewide by April, according to figures provided by OMH after a Gotham Gazette inquiry. That would leave around 550 of the 1,050 psychiatrist beds yet to be restored.

The state letter threatens fines and other enforcement actions. Asked how the state planned to handle errant hospitals, Plastiras said the plans were still under assessment.

"We understand that healthcare providers are facing difficult issues, not the least of which is a nationwide shortage of healthcare workers," he wrote, noting the state's investment in the psychiatric workforce.

"Moving forward, OMH is working with hospitals to identify additional supports and resources that may be needed to reopen beds," Plastiras wrote. "To ensure that reopening plans are on-track, OMH will expand our monitoring of inpatient programs, particularly those with offline beds. If necessary, we will impose fines and sanctions on hospitals not working in good faith to reopen offline beds."

In a response letter, GNYHA President Kenneth Raske blamed bed levels on a shallow labor pool and continuously-low Medicaid reimbursement rates.

He wrote the boost in last year's budget accounted for a 20% increase in reimbursement rates but still left hospitals to find other sources to cover 45% of costs. It also only applies to patients covered under a type of Medicaid plan known as fee-for-service. But for much of the last decade, most Medicaid recipients have been moved over to a new system known as Managed Care. That leaves only one in five discharges benefiting from Hochul's rate increase.

The Assembly's one-house budget proposal rejects the increased penalty entirely, while the Senate's included it with additional protections for "attempts made in good faith to comply with applicable operating certificates and the law."

Asked about the proposal, Burke of GNYHA said hospitals are in regular communication with OMH and there are no indications the state is planning to issue fines. "These patients are in our emergency rooms if they're not in an inpatient bed when they require hospitalization. So everybody recognizes the need right now well exceeds the capacity, and people are making every effort to get the beds back online. And we all support that."

"We don't support our members getting fined," she added.

Note: This piece was updated with information provided by New York City Health + Hospitals at a City Council preliminary budget hearing on Tuesday, March 21.

by Ethan Geringer-Sameth, reporter, Gotham Gazette

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