The 2022-23 Budget: Analysis of the Care Economy Workforce Development Package

The 2022-23 Budget: Analysis of the Care Economy Workforce Development Package MARCH 2022 Summary. This budget post provides (1) an and licensed clinical social workers (LCSWs) is overview of the Governor’s budget proposal to uneven statewide, with certain geographic regions provide $1.7 billion (mostly General Fund) across having significantly fewer providers per capita, three years for several workforce development suggesting potential shortages in those regions. augmentations collectively known as the Care (For example, in 2020, the San Joaquin Valley had Economy Workforce Development package, (2) an 6.5 psychiatrists per 100,000 population compared assessment of the Governor’s proposed package, to 18.7 psychiatrists per 100,000 population in the and (3) recommendations for the Legislature to San Francisco Bay Area.) University of California consider for this proposed package. at San Francisco (UCSF) researchers also have projected—absent changes in the workforce BACKGROUND pipeline—that the state will have half as many psychiatrists as needed by 2028. (These projections Care Economy Workforce also found the state would need roughly 30 percent What Is the Care Economy? There is no more psychologists, LMFTs, and LCSWs.) standard definition for which exact professions Impacts of Pandemic Yet to Be Known. and services comprise the care economy. In some Much of the data about workforce shortages cases, this term is meant to refer specifically to pre-date the onset of the COVID-19 pandemic, caregiving occupations such as nurses, home however, some information is available. For health aides, and child care providers. In other example, in 2021, UCSF researchers found that cases, it is defined to include a broader set of health the state currently is experiencing a shortage professions such as social workers, physicians, of registered nurses due to the impacts of the and psychiatrists (in addition to the caregiving COVID-19 pandemic. However, these researchers occupations just mentioned). For the purposes of also project that this shortage will be eliminated this post, we define the care economy according to by 2026 due to increasing enrollment in registered the latter approach, encompassing a broad range nurse education programs. Overall, however, a of health and human services professions. comprehensive understanding of the extent of care Some Evidence for Existing Shortage of economy workforce shortages—both prior to the Certain Care Economy Providers, Especially pandemic and today—is not available. Within Certain Geographic Regions. There is Some Care Economy Workforce Does some evidence that California is experiencing Not Reflect Demographics of California. a shortage of certain care economy providers. For certain care economy professions, the overall For example, in 2021, the California Health Care workforce does not reflect the demographics of Foundation interviewed health care leaders in seven California. For example, relative to their share of different regions statewide on local capacity to the state’s population, Latino Californians are deliver behavioral health care. Participants in all underrepresented within certain professions, such regions reported an insufficient supply of behavioral as physicians. (Latino Californians comprise about health providers (who are included among care 40 percent of the state’s population, but only make economy professions). In addition, this analysis up roughly 5 percent of physicians.) also found that the distribution of psychiatrists, licensed marriage and family therapists (LMFTs), 2022-23 Budget Series 1 Workforce Development Programs • Employment Development Department (EDD). EDD operates America’s Job Centers What Is Workforce Development? Workforce of California—commonly referred to as development can include the provision of education one-stop job centers—throughout the state and training to connect individuals with jobs. These as required under the federal Workforce education and training activities can be intended to Innovation and Opportunity Act. The either (1) increase the number of workers in a given department also runs the state’s employment occupation or in certain geographic regions—by insurance benefit programs, including providing grants, scholarships, loan repayment, Unemployment Insurance, Paid Family Leave, or outreach and engagement to increase the and Disability Insurance, and collects state number of people pursuing certain occupations— payroll taxes that workers and employers or (2) “upskilling” existing workers to perform new pay. Within EDD, the Employment Training functions or fulfill areas of need. The length of time Panel (ETP) is a quasi-independent entity for workforce development activities varies, ranging that distributes training grants to businesses from training that can be provided in a few weeks to for the employer to set up programs to train education that requires years of study. existing, incumbent workers. Historically, a Several State Health and Labor Entities small statewide payroll tax provided funding Administer Workforce Development Programs, for ETP grants but, in recent years, the state Including Some Targeted at Care Economy has supplemented this longstanding funding Professions. In addition to education provided source with General Fund monies for targeted by state colleges and universities, several state training grants. Notably, the programs health and labor entities administer workforce administered by EDD do not focus solely on development programs. Some of these programs the care economy workforce. are targeted specifically at care economy professions. Below, we describe these entities. Providers Offer Training in Entry-Level Health Care Occupations Through Adult Education • Department of Health Care Access and Program. Adult education focuses on providing Information (HCAI). HCAI develops policies precollegiate-level instruction and short-term and programs to (1) promote access to training in various program areas. These areas the health care workforce, particularly in include various health care occupations—such underserved areas of the state; (2) provide as certified nursing assistants and home health health care quality and cost information; and aides—as well as English courses for English (3) regulate financing opportunities for health as a second language students. Through the care facility construction. Accordingly, HCAI state’s Adult Education Program (AEP), more administers a variety of health care workforce than 350 adult education providers—primarily development programs—generally providing school districts (through their adult schools) and grants, scholarships, and loan repayment— community colleges—are organized into 71 regional targeted at a variety of health care careers. consortia. The consortia have developed plans • California Workforce Development to coordinate and deliver adult education in Board. Although not solely focused on the their regions. In 2021-22, the state is providing care economy workforce, the Board sets $566 million ongoing Proposition 98 General Fund statewide workforce development strategy for AEP. Statute provides this level of funding and oversees state operations of federal regardless of the number of students served or workforce initiatives. The Board also runs the type of instruction provided. In addition, the various state workforce development grant state is providing in 2021-22 about $300 million programs, primarily in the building and Proposition 98 General Fund directly to community construction trades but also, more recently, in colleges for noncredit (adult education) instruction, healthcare, janitorial, information technology, which also includes health care training programs and climate-related industries. and English as a second language classes. 2022-23 Budget Series 2 Recent State Investments in Care Since the bulk of this funding has only recently Economy Workforce been made available, information on how the funding has been used and the results therefrom is In Recent Years, State Has Made Substantial relatively limited. However, some award information Investments for Care Economy Workforce is available. For example, in 2021, the Song-Brown Development. Figure 1 shows recent major Program awarded funding to support 231 primary state funding for care economy workforce care residency slots. development. For example, as part of the 2021-22 budget, HCAI received $800 million General PROPOSAL Fund to increase the number of behavioral health providers statewide focusing on children and youth The Care Economy Workforce Development treatment. In addition, the 2021-22 budget provided Package. The Governor proposes $1.7 billion HCAI with $60 million General Fund to support (across three years) for the Care Economy the Song-Brown Program, intended to increase Workforce Development package. This package the number of primary care providers statewide consists of a variety of distinct proposed by funding primary care residency training slots. augmentations across several state health and Figure 1 Recent Major State Funding for Care Economy Workforce Development One-Time General Fund, Unless Otherwise Noted (In Millions) Augmentation Funding Description 2019-20 Medi-Cal Student Loan $120.0a Provide loan repayment for physicians and dentists who commit to treating Repayment Program Medi-Cal patients. Mental Health Workforce 110.0b Provide funding for loan repayment and scholarships to mental health Development practitioners, mental health training for primary care clinicians, and local mental health workforce initiatives. 2020-21 Expand Medical School $40.0c Increase enrollment at UC Riverside School of Medicine and UC San Enrollment Francisco campus at Fresno. 2021-22 Children and Youth Behavioral $427.0 As part of broader Children and Youth Behavioral Health Initiative, provide Health Workforce Development grants to a variety of entities to increase number of behavioral health (across two years) providers (including social workers) treating children and youth. School Behavioral Health 338.0 As part of broader Children and Youth Behavioral Health Initiative, provide Counselors and Coaches grants to a variety of entities to increase number of behavioral health (across five years) counselors, coaches, and peer support specialists in schools. Song-Brown Program 60.0 Provide additional funding to Song-Brown Program, to support primary care residency slots and registered nursing training programs. Children and Youth Behavioral 50.0d As part of broader Children and Youth Behavioral Health Initiative, provide Health Training training in children and youth behavioral health issues to pediatric, primary care, and other health care providers. Certified Nursing Assistants 45.5 Provide scholarships and stipends to increase Certified Nursing Assistant workforce, and provide funding to support health career pathway program for youth. UC Programs in Medical 12.9c Provide training to promote diversity in the physician workforce and increase Education (PRIME) number of physicians in underserved areas of the state. a Proposition 56 Funds. b Combined General Fund and Mental Health Services Fund. c Ongoing funding. d Funding for 2022-23. 2022-23 Budget Series 3 labor entities. The vast majority of proposed competency within care economy professions funding would come from the General Fund with statewide. The various components of the a few exceptions (such as Proposition 98 funds). proposed Care Economy Workforce Development This proposed package intends to (1) increase the package are summarized in Figure 2 below. number of care economy providers, particularly Proposed Package Provides Funding to in underserved areas of the state; (2) provide Increase Number of Care Economy Providers… additional training for existing care economy Most of the augmentations included in the package providers; and (3) increase diversity and cultural are intended to increase the number of care Figure 2 Care Economy Workforce Development Proposals General Fund, Unless Otherwise Noted (In Millions) Funding Proposal Description 2022-23 Three-Year Total HCAI Community Health Workers Recruit, train, and certify new community health workers. $50 $350 Comprehensive Nursing Initiative Increase the number of nursing professionals. 90 270 Expanding Social Workers Provide stipends and scholarships to increase the number of social 70 210 workers and increase diversity among social workers. Behavioral Health Workforce Increase the number of behavioral health providers, including by 40 120 supporting psychiatric residency programs. Multilingual Health Initiatives Provide scholarships and loan repayment for multilingual 20 60 applicants among health care professionals. Opioid Treatment Increase the number of substance use disorder treatment 26a 26a professionals and train substance use disorder treatment professionals on how to provide employment services to clients. Reproductive Health Clinical Provide loan repayment and scholarships to health care providers 20 20 Infrastructure that commit to pursuing reproductive health care careers. Workforce Council for Health Research health care workforce shortages and best practices to 3 3 Care Training build a diverse health care workforce. CWDB High Road Training Partnerships Provide funding for training programs among a variety of entities $120 $340 (including community-based organizations, labor unions, and employers) to build career pathways for health care professions. CCC English Language Learners Provide funding for health care vocational pathways for English $130b $130b Health Careers language learners. EDD Employment Training Panel Provide grants to employers to upskill existing health care $90 $90 professionals. Emergency Medical Services Increase the number of Emergency Medical Technicians. 20 60 Corps DHCS Indian Health Program Grants Restore grant funding to Indian Health Program. $12 $12 Totals $691 $1,691 a Opioid Settlement Fund. b Proposition 98 General Fund. HCAI = Department of Health Care Access and Information; CWDB = California Workforce Development Board; EDD = Employment Development Department; and DHCS = Department of Health Care Services. 2022-23 Budget Series 4 economy providers in certain fields. For example, be used, the administration has not specified the proposed package includes a combined how those objectives and allocations would be $972 million (across three years) to (1) increase implemented. Consequently, we do not have the number of nursing providers, social workers, sufficient information to evaluate the proposal and behavioral health providers by funding loan fully. For several of the proposals, the ultimate set repayment, scholarships, psychiatric residency of specific provider types that would be targeted slots, and outreach and engagement to encourage is unclear. (For example, the proposal to provide individuals to pursue these careers, and (2) increase funding to increase the number of behavioral the number of community health workers—a health providers does not specify what share relatively new care economy provider type— of funding would be allocated by provider type statewide. (Community health workers are trained within the broad category of behavioral health health educators who work directly with individuals providers.) In addition, while we understand who may have difficulty understanding or that the administration intends to provide this interacting with health care providers due to cultural funding within the structure of existing programs, or language barriers to increase their engagement how this would be accomplished for several with the health care system.) of the proposed augmentations is unclear as …And for Additional Training for Existing some existing programs do not align with the Care Economy Providers. Several of the proposed augmentations. augmentations included in the Care Economy Proposed Package Lacks Clear Problem Workforce Development package are intended to Definition… As noted earlier, studies have provide additional training to existing health care identified different workforce needs in the care providers. For example, the proposed package economy both before the pandemic and more includes a combined $94 million (across three recently. While the administration references years) to (1) ETP to provide grants to care economy these workforce needs as part of its proposal, the employers to upskill existing employees and administration does not provide a comprehensive (2) HCAI to upskill behavioral health providers. assessment of statewide workforce needs across Proposed Package Includes Funding to the care economy. Moreover, the administration Increase Diversity Among Care Economy does not offer an assessment as to why the Professionals. The package also includes state faces these workforce shortages and what augmentations intended to increase diversity interventions could address them. among care economy professionals. For example, …And Fails to Align Proposed Solutions With the proposed package includes a combined Identified Problems. The administration’s proposal $190 million (across three years) to support health focuses on training opportunities, particularly care vocational pathways for English language for community health workers and nurses. learners, as well as to provide scholarships and loan However, the administration does not provide an repayment for multilingual care economy providers. assessment as to why these occupations should be Some Funding Within Proposed Package for targeted first. (For example, as discussed earlier, Health Care Workforce Research. The package UCSF researchers project that the state’s current also includes additional funding to HCAI to research shortage of registered nurses will be eliminated health care workforce shortages and best practices by 2026 due to increasing enrollment in registered for developing a diverse workforce. nurse education programs.) Moreover, workforce shortages across the care economy could be ASSESSMENT occurring for many reasons including lack of training opportunities, insufficient pay, and working Proposed Package Largely Conceptual, conditions. Whether the administration’s proposal With Key Details Not Yet Developed. The to focus largely on one facet of these issues would proposed package is largely conceptual. While the be effective is unclear. proposal includes funding objectives, allocations, and high-level descriptions of how funding could 2022-23 Budget Series 5 Workforce Development Targets Unclear. ETP Grants Could Support Upskilling, but While the administration has provided estimates Not Are Likely to Grow or Diversify Workforce… of how many awards would be made for some ETP provides grants to businesses to train their proposals within the package—for example, the existing workers. ETP grants do not directly administration anticipates that this proposed encourage businesses to hire new workers or do package would result in 4,509 loan repayments so in a way that diversifies their workforce. As a and 1,666 scholarships annually (across three result, ETP training grants may be consistent with years) for nursing professionals—other proposed one goal of the care economy package—upskilling augmentations within the package do not come the workforce—but likely would not contribute to with similar estimates. (For example, there is no the package’s other goals, including increasing the accompanying estimate for how many awards number of workers and diversifying the workforce. would be made for behavioral health providers …And Recent Expansion at ETP Raises other than psychiatrists and for specific types of Capacity Questions. Although ETP grants may be nursing professionals.) Without this information, one tool to upskill workers, the $90 million proposal and without information on what additional number in the package would almost double grant funding of care economy providers—by provider type—is made by ETP in recent years (the panel distributed necessary to fulfill statewide need, assessing a total of $97 million in grants in 2020-21). Further, what workforce gaps would be addressed by the $90 million proposal would be in addition to a the proposed package and the extent to which one-time increase in ETP grants of $65 million that particular workforce gaps would be filled is difficult. was included as part of the 2021-22 budget. Such Whether Additional Workforce Training Is a large increase in funding could prove challenging Best Approach to Address Immediate State to administer, especially given that ETP would need Workforce Shortages Is Unclear. The additional to target these grants specifically to health care care economy professionals created as a result of industry employers and organizations. the proposed package’s education and training Proposed Adult Education Funding Is Not augmentations will take some time to materialize. Justified Given Existing Excess Capacity. While this may help the state meet projected In 2020-21, AEP providers enrolled about one-third shortfalls of care economy providers in the future, it fewer students in their programs compared with will likely not provide immediate relief for workforce 2018-19—a loss of about 50,000 full-time equivalent shortages to the extent they persist now. students. This significant decline was due to the How Proposed Package Would Complement effects of the pandemic. Based on preliminary Prior State Workforce Development Investments information, enrollment is recovering slightly in Is Unclear. As discussed earlier, in recent years 2021-22 but is still well below pre-pandemic levels. the state has made substantial investments Despite these enrollment declines, because of the in workforce development, including for care way AEP and community colleges are funded, adult economy professions that also are targeted in education providers have not seen reductions in this proposal, particularly in the area of behavioral their funding. As a result, AEP consortium members health. The state’s recent investments in these likely have significant capacity next year to serve areas should, in concept, result in additional care more students without the Governor’s proposed economy providers, which will help the state augmentation. As noted earlier, AEP consortia address projected shortfalls in these occupations. have the authority to decide what programs to These recent augmentations also should affect the offer, including for training in health care fields ultimate need for additional providers. However, and in English as a second language. Accordingly, how the proposed package would build upon— if AEP consortia wish to provide these training and not duplicate—these efforts is unclear. opportunities they can elect to do so. In addition, how any evaluation of the proposed package would be coordinated with the required evaluation components of prior state investments also is unclear. 2022-23 Budget Series 6 Provisional Budget Bill Language Limits Alternatively, Gather More Information and Legislative Input on Development of Package. Adopt Trailer Bill Legislation. If the Legislature The administration is proposing provisional budget approves of this proposed package in concept and bill language (as opposed to trailer bill legislation) wishes to provide funding in the 2022-23 budget, to implement the package, under the rationale that it could ask the administration to provide further funding would be administered entirely through information on the proposed package at May the structure of existing programs. However, as Revision. Specifically, the Legislature may wish discussed earlier, how several augmentations within to request information from the administration on the proposed package would fit within the structure (1) how funding would be allocated across specific of existing workforce development programs is provider types (such as for behavioral health and unclear. Accordingly, new workforce development nursing providers), (2) which specific existing programs may need to be created to administer some workforce development programs would administer of the funding in this proposed package. The lack each component of this proposed package, (3) how of proposed trailer bill legislation to implement this many care economy providers (by provider type) proposed package limits the Legislature’s input on are needed to fulfill statewide need, and (4) how the development of this package, since it removes an this proposed package would complement prior opportunity for the Legislature to specify its intent and state workforce development investments. In terms for the proposed funding. addition (as discussed earlier), we find that the lack of proposed trailer bill legislation to implement RECOMMENDATIONS this proposed package limits the Legislature’s input on the package. Should the Legislature wish Consider Deferring Action on Funding Until Fully to provide funding in the 2022-23 budget, we Fleshed Out Plan Developed. As discussed earlier, recommend adopting trailer bill language to ensure the proposed Care Economy Workforce Development input into key details of the proposed package package is at a conceptual stage, with key details (such as what balance of funding should go toward outstanding. Furthermore, there are two major pieces specific provider types). We also provide a few of missing information which are key to supporting the recommendations for specific components of the rationale for this proposed package. These pieces of proposed package below. information include: (1) the specific workforce gaps by care economy provider type that exist (accounting for Reconsider Whether to Fund Training major recent state investments that should produce Grants at ETP. New ETP grants would help additional care economy providers) and the extent some businesses pay for training for their existing to which the proposed package serves to fill these workers, but would not directly grow or diversify gaps and (2) whether increasing funding for workforce the workforce and could prove challenging to education and training is the right intervention to administer. If the Legislature approves of the address identified workforce gaps. (For example, if proposed package in concept, we recommend it pay levels are a major reason for workforce gaps, consider whether a smaller grant increase at ETP is then alternative interventions may be warranted.) warranted and, if so, whether those freed-up funds Given these key outstanding pieces of information, should go toward alternative training programs or the Legislature could provide planning dollars in this some other aspect of the proposal altogether. year’s budget for the administration to undertake an Reject Proposed Funding for Adult Education assessment of workforce gaps and determine the Program. Due to the significant amount of ongoing underlying issues that most impact participation in funding adult education providers currently have to those professions. The Legislature could then evaluate serve more students, we recommend the Legislature providing full funding for a fleshed out care economy reject the Governor’s proposed $130 million workforce development plan from the administration one-time funding for this purpose. Instead, the next year. This approach would provide the Legislature Legislature could redirect the funds to higher-priority with more control over determining what the Proposition 98 purposes. appropriate state-level interventions are to address care economy workforce gaps. 2022-23 Budget Series 7 LAO PUBLICATIONS This post was prepared by Corey Hashida, Chas Alamo, and Paul Steenhausen, and reviewed by Mark C. Newton and Carolyn Chu. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. 2022-23 Budget Series 8